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A Strong Middle Class Blog

  • Equal Pay and Work-Family Policies Are Critical For Middle Class Economic Security

    Posted by Terrell McSweeny on July 20, 2010 at 4:06 PM EDT

    Within the first ten days of his new administration, President Obama took two major steps for working women and their families:  he signed the Lilly Ledbetter Fair Pay Act and created the Middle Class Task Force.   The Lilly Ledbetter Fair Pay Act reversed a harmful decision by the Supreme Court that had made it even difficult for women to bring pay discrimination cases.

    Followers of this blog are familiar with the mission of the Middle Class Task Force, which is, as the Vice President has said, “to get the middle class – the backbone of this country – up and running again.” 

    From day one, that charge has included addressing a defining change in the workforce and families – the movement of women out of the home and into paid employment. 

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  • Focus on Workplace Safety

    Posted by Joseph Main on July 16, 2010 at 10:49 AM EDT

    Each year across America, more than 5,000 workers are killed on the job. Another four million are injured, and thousands more will subsequently become ill or die from present day occupational exposures.

    Recent tragedies—like the explosions at the Upper Big Branch Mine in West Virginia and aboard the Deepwater Horizon off the Gulf Coast—make that clear.  The news coverage is certainly fostering public awareness of the hazards facing many workers, but every day, countless other workplace injuries and deaths go largely unnoticed.

    Shortly after the Upper Big Branch explosion, the President made clear his personal commitment and that of the Administration to honor the victims of this disaster by ensuring justice is served on their behalf and that an accident of this magnitude never happens again.  He told the nation “we owe [those who perished in the UBB disaster] more than prayers.  We owe them action.  We owe them accountability.  We owe them an assurance that when they go to work every day, when they enter that dark mine, they are not alone.  They ought to know that behind them there is a company that’s doing what it takes to protect them, and a government that is looking out for their safety.”

    Includes Video
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  • If It's Working, Keep it Going!

    Posted by Jared Bernstein on July 12, 2010 at 12:01 PM EDT

    At a time like this, when there are still far too many Americans out of a job, policy makers might consider this simple rule: when a program is successfully and efficiently creating jobs, don’t eliminate it.

    This rule should especially be observed when the assertion that it’s working is widely agreed upon by both Democrats to Republicans, by economists and business owners and governors.

    But unless the Senate acts soon to preserve the Temporary Assistance for Needy Families (TANF) Subsidized Jobs program, this simple rule will be broken and this great program will be taken down.

    We’ve highlighted this jobs program before, and a quick look at the reasons it’s so effective explains our enthusiasm.  It lets states use Recovery Act dollars to pay for part of a new employee’s wages, giving employers a strong incentive to hire unemployed workers.  And we’re not talking about bureaucrats here, folks – these subsidized workers are being placed at private-sector businesses and non-profits in addition to state government agencies.

    It’s a two-fer as well, because while the program helps folks get out of their homes and into jobs, it’s also helping them get off public assistance like unemployment insurance and welfare.

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  • Another Step Forward on College Affordability

    Posted by Brian Levine on July 7, 2010 at 12:15 PM EDT

    Back in March, the President signed the historic Health Care and Education Reconciliation Act and we blogged about how it would help college students and their families. Some major parts of that legislation took effect on Thursday, July 1st.

    From now on, all new federal student loans will be made through the Direct Loan program. The Department of Education provides the capital for new loans and private companies selected through a competitive process service and collect them. This means the federal government won’t be subsidizing banks anymore.

    The transition to direct lending will save the government billions of dollars a year. These savings make another one of Thursday’s changes possible. The maximum Pell Grant award for 2010-2011 is increasing to $5,550. This is $800 more than when President Obama took office.

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  • Bringing Green Manufacturing Back Home

    Posted by Tobin Marcus on June 29, 2010 at 5:55 PM EDT

    We talk a lot about the need for America to lead the world in green manufacturing, and with good reason: a strong green manufacturing sector will create good, domestic jobs and boost exports, all while helping us reduce carbon emissions and break our dependence on foreign oil.

    But it’s not just talk. We’re taking action to re-establish that leadership, and what’s happening today, down in Louisville, Kentucky, is a perfect example of how we’re going to do it.

    Vice President Biden was in Louisville today to visit a General Electric facility called Appliance Park, where GE is investing $600 million to expand their manufacturing of energy-efficient appliances. But they’re not doing it alone – their investment is being supported by $24.8 million in Recovery Act funds through a program called the Section 48C Advanced Energy Manufacturing Tax Credit, or “48C” for short.

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  • Good Jobs and a Level Playing Field in the Next Recovery

    Posted by Jared Bernstein on June 17, 2010 at 12:20 PM EDT

    As the American economy moves from recession to recovery, our administration must continue to do all we can to create the conditions for robust job growth.  What’s more, we need to be mindful not only of the quantity of new jobs, but of their quality as well.

    That’s why we’ve proposed to address a growing problem in our labor market: the misclassification of employees as independent contractors (ICs).   Deputy Secretary of Labor Seth Harris testified to Congress on this issue today, and the opening of his testimony is worth repeating here:

    "Misclassification" seems to suggest a technical violation or a paperwork error.  But “worker misclassification” actually describes workers being illegally deprived of labor and employment law protections, as well as public benefits programs like unemployment insurance and workers’ compensation because such programs generally apply only to “employees” rather than workers in general…Misclassification is no mere technical violation.  It is a serious threat to workers and the fair application of the laws Congress has enacted to assure workers have good, safe jobs.

    While unintentional misclassification occurs, that’s not the real problem.  Some workers really are independent contractors, and sometimes employers mistakenly classify some of their employees as ICs.  But some less scrupulous employers have been intentionally and systematically misclassifying their workers, and it’s these cases that need to be met with new rules to address what experts say is an increasing problem.  And those new rules are precisely what we at the Middle Class Task Force have proposed.

    You may be wondering why an employer would misclassify their workers.  The answer is simple: they can pay them considerably less, since ICs are not subject to minimum wage or overtime rules.  And since employers don’t have to pay the requisite employment taxes on ICs, like payroll or unemployment insurance taxes, they end up shortchanging government coffers as well.

    A moment’s thought also shows how misclassification creates and uneven playing field: employers who systematically misclassify their workers have a significant competitive advantage over the vast majority of employers who are playing by the rules.  And if the folks breaking the rules can do the job more cheaply than the folks following the rules, it’s going to be tougher and tougher for the good guys to hang on.

    President Obama’s FY2011 Budget features a plan to address the problem.  First, we need to get rid of some of the old policies that incentivize misclassification, then we need to make it easier for both the Labor and Treasury Departments to find misclassifiers, get them to accurately classify their workers in the future, and penalize them if they fail to do so.  Finally, we must restore workplace protections to workers who have been wrongly classified.

    And there’s another good reason to pursue these changes today: in these times of high deficits, we need the revenue.  Remember, when employers misclassify employees as ICs, they don’t pay the taxes they owe.  Implementing the changes we’ve proposed will bring in $7 billion over ten years.

    So keep an eye on this issue as we work with Congress to not only create more jobs, but to create better ones.

    Jared Bernstein is Chief Economic Advisor to the Vice President

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