How hateful rhetoric connects to real-world violence |
- Today’s global economy is eerily similar to the 1970s, but governments can still escape a stagflation episode
- Episode V: Israel’s caretaker
- Reactions to the Biden administration’s proposed Title IX changes from education law scholars
- Hutchins Roundup: Inflation expectations, remote work, and more
- Dobbs, another frontline for health equity
- The end of Roe will create more inequality of opportunity for children
- Why the FTC should proceed with a privacy rulemaking
- Stuck on the ladder: Wealth mobility is low and decreases with age
- The Black-white gap in wealth mobility and what to do about it
- Good jobs are out of reach for many 20-somethings in the U.S.
| Posted: 01 Jul 2022 11:52 AM PDT By Jongrim Ha, M. Ayhan Kose, Franziska Ohnsorge The global economy is in the midst of a sudden slowdown accompanied by a steep run-up in global inflation to multidecade highs. These developments raise concerns about stagflation—the coincidence of weak growth and elevated inflation—similar to what the world suffered in the 1970s. That experience should be warning of the damage this could wreak on emerging market and developing economies (EMDEs). The stagflation of that era ended with a global recession and a series of financial crises in EMDEs. In light of the lessons of that stagflation episode, these economies need to do a quick rethink of policies to cope with the consequences of rapidly tightening global financing conditions. Inflation and growth: moving in opposite directionsIn May 2022, global inflation (8.1 percent) and EMDE inflation (9.4 percent) were at their highest levels since 2008. Inflation in advanced economies reached its highest level recorded during the last four decades. As recent shocks in energy and food prices recede, supply bottlenecks ease, and financial conditions tighten, global inflation is expected to decline to about 3 percent next year. But this would still be about 1 percentage point above its average in 2019, before the pandemic turned the world upside down. After collapsing during the 2020 global recession, global growth rebounded to 5.7 percent in 2021, supported by unprecedented fiscal and monetary policy accommodation. However, growth is now expected to slow to 2.9 percent in 2022 with little change in 2023-24 because of the war in Ukraine, the fading of pent-up demand, and the withdrawal of policy support amid high inflation. Beyond the near-term, global growth is expected to remain subdued over the 2020s, reflecting a trend weakening of the fundamental drivers of growth. The growth slowdown is steeper, inflation increases not quite as bad (yet)The current juncture resembles the early 1970s in three key respects:
Figure 1. Developments in the 1970s and 2020s: SimilaritiesA. Slowdown in growth after global recessions
B. CPI inflation
C. Real interest rates
D. Change in food and energy prices
Sources: Federal Reserve Economic Data; Haver Analytics; World Bank. Notes: CPI = consumer price index; EMDEs = emerging market and developing economies. A. Figure shows changes in global growth (in percentage points) between 2021-24 and 1976-79; covers three years following a rebound from a global recession; B. Annual averages of headline and core CPI inflation in the United States and global (average across 66 countries). 2022 is based on the averages of January to May 2022; C. Figure shows nominal and real (CPI-adjusted) short-term interest rates (Treasury bill rates or money market rates, with the maturity of three months or less). Global interest rates are weighted by GDP in U.S. dollars. Sample includes 113 countries, though the sample size varies by year; D. Percent change in monthly energy and food price indices over a 24-month period. Because of data limitations, prior to 1979, the energy price change is proxied using the oil price change. Critical differences from the 1970sWhile the similarities outlined above are worrying, there are important cyclical and structural differences between the 1970s and the current situation. These mean that the global economy could yet escape a repeat of that stagflation episode.
Figure 2. Developments in the 1970s and 2020s: DifferencesA. Number of countries with inflation targeting
B. Labor market flexibility
C. US inflation expectations
D. Global energy intensity
Notes: TOE=Tonnes of oil equivalent. A. Based on the clarification of IMF Annual Report on Exchange Arrangements and Exchange Restrictions and country-specific sources; B. Collective bargaining rates indicate percent of employees with bargaining powers. Trade union density rates indicate the number of union members as a percent of total employees. Aggregation is based on median across a balanced set of 25 economies; C. U.S. consumer inflation expectations based on April 2022 University of Michigan survey; D. Energy includes coal, natural gas, and oil. TOE stands for tonnes (metric tons) of oil equivalent. Aggregates calculated using GDP weights at average 2010-19 prices and market exchange rates. A sluggish response to serious risksConcerns about persistently above-target inflation have already prompted central banks in most advanced economies and many EMDEs to tighten monetary policy amid a sharp growth slowdown. Despite this tightening, as of May 2022, real policy rates (adjusted by actual inflation) remain deeply negative in the average advanced economy (-5.2 percent) and in the average EMDE (-3.2 percent). If inflation expectations de-anchor, as they did in the 1970s, because of persistently elevated inflation and repeated inflationary shocks, the interest rate increases required to bring inflation back to target in advanced economies will be greater than those currently anticipated by financial markets. This raises the specter of the steep increases in interest rates that brought inflation under control but also triggered a global recession in 1982. That global recession also coincided with a string of financial crises and marked the beginning of a protracted period of weak growth in many EMDEs. If current stagflationary pressures intensify, EMDEs would likely face economic danger again because of their less weakly-anchored inflation expectations, elevated financial vulnerabilities, and dwindling growth prospects. This makes it urgent for their governments to shore up their fiscal and external buffers to stave off potential contagion, strengthen their monetary policy frameworks to reduce policy uncertainty, and implement structural policies to reinvigorate growth. This posting includes an audio/video/photo media file: Download Now |
| Posted: 30 Jun 2022 01:31 PM PDT By Natan Sachs On July 13, U.S. President Joe Biden is scheduled to land at Ben Gurion Airport near Tel Aviv. In a change of plans, he will find not Naftali Bennett receiving him on the tarmac, but a new Israeli prime minister, Yair Lapid. The centrist Lapid, foreign minister for the past year, assumes the role of Israel's fourteenth prime minister. The Knesset having dissolved itself, Lapid will serve in a caretaker role until a new permanent government can be sworn in following elections on November 1. Israel's fifth parliamentary elections in less than four years will pit Lapid, four months into his term, against Bennett's predecessor and Israel's longest-serving prime minister, Benjamin Netanyahu. Political turmoil in Israel has become so commonplace that one would be forgiven for barely noticing. Indeed, continuity will be the rule in some central aspects of Israeli policy, meaning that Biden's agenda can continue without much change. This continuity can mask the deeper damage of this ongoing political turmoil for the country, however. Israel has seen its people turning upon themselves, its politics focused around the personality of one man — Netanyahu, and an attempt to set aside the fundamental question of Israeli-Palestinian relations. What happened?That the Bennett-Lapid government survived even a year was an achievement of sorts. It rested on a coalition that spanned from the far right, through the center, through the left, and included Ra'am, an Arab party affiliated with part of the Islamic Movement in Israel. The coalition agreed on very little, least of all on Israeli-Palestinian relations, but set itself two main goals: replacing Netanyahu, who had led the country in the mid-1990s and again since 2009, and returning Israel to normal governance, including the passing of a state budget for the first time since 2019. It achieved both goals, and embarked on a robust domestic agenda, but only for a year. Its parliamentary majority was too slim to withstand defections, which came mostly from its right flank, among members of Bennett's own party, who were always ambivalent about forming an anti-Netanyahu government with the center and the left. Though it was established with the explicit intent of setting aside the Palestinian issue, the proximate trigger of the coalition's collapse was squarely West Bank-related: the pending expiration of emergency regulations — in place for many decades — that extend Israeli law to Israeli citizens in the West Bank. These regulations allow Israeli settlers to live under Israeli rule, even while Israel has not formally annexed the territory or extended civilian rule to Palestinians in the areas under direct Israeli control. In normal times, the Knesset would easily extend these regulations, but with the opposition unwilling to support any legislation, Israeli settlers' legal status was about to be upended. Bennett preempted his coalition's collapse and the regulations' lapse by initiating new elections, automatically extending the regulations into the new Knesset's term. Bennett announced that he is taking a break from political life. Scarred by the ire of the right wing, which branded him a turncoat and attacked him relentlessly, he faced the prospect of a greatly diminished political role. He will soon exit the scene for now — the door is never completely shut in Israeli politics — as a 50-year-old with a line in his resume shared by only 11 men and one woman before him. In the meantime, he will continue to manage the Iran file in Lapid's caretaker cabinet. Plus c’est la même chose, plus ça changeWhen President Biden travels to Israel, the West Bank, and Saudi Arabia in July, he will find a region in deep flux, with Israel, a major regional power, increasingly integrated into the regional diplomatic dynamic. Israel's relations with key Gulf states, notably the United Arab Emirates and Bahrain, with Saudi Arabia in the background, as well as Egypt, Jordan, and Morocco, have been gaining steam in the past year. These dynamics, which started in the background during the Obama years and came to the fore with the Abraham Accords under the Trump administration, will now be embraced by Biden. The alignment includes practical and already operational cooperation on missile defense between Israel and Arab states, something that would have seemed fantastical in the past. Biden will find an Israel eager to push forward on its deepening relations with the Arab world. While it was Netanyahu who signed the Abraham Accords and used his intimate relationship with the Trump administration to promote them, the then-opposition largely embraced them wholeheartedly. Indeed, it was actually a member of Lapid's own party, Ram Ben Barak, who initiated the latest Israeli-Moroccan normalization from the opposition, before the process was handed over to Netanyahu's official representatives. As foreign minister under Bennett, Lapid convened the Negev Summit, with the foreign ministers of the Abraham Accords countries Bahrain, Morocco, and the UAE plus Egypt, and U.S. Secretary of State Antony Blinken. Lapid focused on opening new avenues of cooperation, including a new "quad" of Israel, the UAE, India, and the United States, which will be convened virtually during Biden's visit. Lapid differs from Netanyahu, and even more so from his partner Bennett, in his vocal embrace of a two-state solution with the Palestinians and his desire to leverage the warming relations with the Arab world to advance Israeli-Palestinian relations. He is no leftist dove, however. He is deeply skeptical of the Palestinian leadership's ability to reach any deal, or of his own ability to lead any deep change of Israeli policy in the current political environment. Along with Defense Minister Benny Gantz, Lapid is likely to continue to make incremental improvements to Palestinian livelihood, but not to try to unilaterally change reality in the West Bank or Gaza Strip in a fundamental way. On Iran, too, Biden will find mostly continuity. Lapid, Bennett, and Gantz all share the widespread Israeli concern over Iran's nuclear program, even if their rhetoric is sometimes different than Netanyahu's. Where they differ dramatically from Netanyahu is in their belief that Israel must work closely with the United States — regardless of who is in the White House — to counter Iran. And indeed, Lapid stands out on his approach toward relations with America, and especially the Democratic Party. Ideologically and temperamentally closer to the center of American politics, rather than its right flank, he differs from Netanyahu considerably in this regard. Lapid is the son of a Holocaust survivor journalist-turned-politician father and a novelist mother. A child of the upper middle-class and a fixture of Tel Aviv nightlife, he became a well-known newspaper columnist, songwriter, actor, and TV presenter in his own right. After entering politics and leading his newly formed party to second place in 2013, he was appointed finance minister under Netanyahu, forming a surprising alliance with the right-wing Naftali Bennett. At first an inexperienced politician, Lapid earned his stripes and in the past three years has emerged as a seasoned and very able politician, and now the clear leader of the anti-Netanyahu camp. Is Bibi back?Bennett served the shortest term as Israel's prime minister, shorter even than that of Ehud Barak in 1999-2001. Lapid could soon break that record if Netanyahu wins in November. A Netanyahu victory is a distinct possibility. He missed an outright victory by slim margins more than once over the last four years. He has lost one advantage to Lapid, however. In the past, Netanyahu could always turn to another round of elections to stay in office as the default caretaker prime minister. Should the November elections be stalemated, yet again, Lapid will continue as prime minister until a new government is successfully formed. In the meantime, Netanyahu's trial for corruption continues. Though Israel's legal system is notoriously slow, there remains the possibility that Netanyahu may be barred from politics if convicted in the coming years. Netanyahu is openly relishing the head-to-head campaign against Lapid. While an excellent communicator and disciplined and talented campaigner, Lapid is facing the master of Israeli politics. Still, as caretaker prime minister, Lapid will have the chance to answer the one question that has always plagued him in politics: Does he have the gravitas and stature to be the top leader? The single most important moment of his campaign may come very soon: When he, as prime minister, receives President Biden at Ben Gurion Airport. This posting includes an audio/video/photo media file: Download Now |
| Reactions to the Biden administration’s proposed Title IX changes from education law scholars Posted: 30 Jun 2022 11:21 AM PDT By Suzanne Eckes, R. Shep Melnick, Kimberly J. Robinson On June 23, 1972, President Nixon signed the Education Amendments Act of 1972. Title IX of the Act has become one of the most important, yet contested, federal protections of students' civil rights and educational opportunities. It reads: No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance. On June 23, 2022, the U.S. Department of Education released its proposed changes to Title IX regulations for public comment. The Biden administration says the changes would restore protections from sexual harassment and assault, as well as sex-based discrimination, including for LGBTQI+ students who confront discrimination based on their sexual orientation or gender identity. Its proposed amendments would reverse many changes made by the Trump administration. Over the next several months, the Department will collect and review public comments on its proposed amendments before issuing its final regulations. In the meantime, the Brown Center on Education Policy invited three experts of Title IX and education law to share their reactions and expectations Question 1: What elements of Title IX are you paying close attention to as these new proposed rules enter the negotiated rulemaking process?Kimberly J. Robinson: I am paying especially close attention to two issues. First, the burden of proof to establish that sex discrimination occurred is what determines the effectiveness of Title IX, particularly in instances of sexual harassment and assault. The proposed regulation generally requires a recipient to adopt a preponderance of the evidence standard, i.e., to prove that more likely than not discrimination occurred. The prior regulation (from the Trump administration) required a recipient to adopt the same standard of proof as it adopts for complaints against employees, including faculty, which typically is a clear and convincing evidence standard. The latter standard is so difficult to meet that it can deter those who have experienced sexual harassment and assault from coming forward. The preponderance of the evidence standard appropriately enables the decisionmaker to weigh all available evidence, including the credibility of witnesses, and determine what is likely to have happened without extrinsic corroborating evidence that is oftentimes lacking. Another critical issue is whether cross examination at a live hearing is mandatory. The proposed regulations give educational institutions flexibility to assess credibility through questioning at individual meetings with the parties or a live hearing. The proposed rule will enable institutions to continue to assess the credibility of witnesses while also tailoring the proceedings to the nature of the allegations and the impact of the proceedings on the complainant and the accused. This approach is cost effective and eliminates the adverse effects that mandatory live hearings can impose upon both parties. Shep Melnick: Responding to charges that the Department's Obama-era policies had denied due process and free speech rights to students accused of sexual misconduct, the Trump administration issued regulations that narrowed the definition of sexual harassment, required colleges to hold live hearings with cross-examination of witnesses, and prohibited them from using a "single investigator model" for resolving sexual misconduct cases. The Biden administration's proposal does just the opposite: it broadens the definition, eliminates the live hearing and cross-examination requirements, and allows the same person who investigates sexual misconduct complaints to determine guilt and innocence. These are the most controversial elements of the proposal, but there are many more. Other provisions spell out who must report misconduct, how far the responsibilities of schools extend, what triggers an investigation, the burden of proof, and much more. Since this was only a proposal—with key parts labelled "tentative"—it will be months before we see the final regulations, and much longer before we know if they can survive judicial review. Suzanne Eckes: I am paying most attention to how the proposed rules have addressed discrimination related to sexual orientation and gender identity under Title IX. The U.S. Supreme Court has not yet addressed this issue under Title IX. In 2020, the Court ruled in Bostock v. Clayton County that an employer who fires someone for being gay or transgender violates Title VII of the Civil Rights Act of 1964. Although the Bostock opinion addresses employment matters, courts examining Title IX issues often look to Title VII cases for guidance. For example, when the Fourth Circuit ruled in favor of a transgender student based on equal protection and Title IX claims, the circuit observed that “after the Supreme Court’s recent decision in Bostock . . ., we have little difficulty holding that a bathroom policy precluding Grimm from using boys' restrooms discriminated against him 'on the basis of sex.'" Question 2: How will these changes impact students, schools, and other stakeholders? Who benefits?Kimberly J. Robinson: The proposed regulation would expand the obligation of educational institutions to take action to remedy sexual harassment because it defines prohibited hostile environment harassment as "unwelcome sex-based conduct that is sufficiently severe or pervasive, that, based on the totality of the circumstances and evaluated subjectively and objectively, denies or limits a person's ability to participate in or benefit from the recipient's education program or activity" (emphasis added). Students will receive greater protection from unwelcome sexual misconduct without having to show that the behavior is "so severe, pervasive, and objectively offensive" that it denied access to education, as the prior regulation required. All students will benefit from a stronger institutional commitment to preventing, ending, and remedying a broader range of sexual harassment so that students can focus on learning in a safer and more welcoming environment. The proposed revisions also confirm the applicability of Title IX's protections to all forms of sex discrimination, including discrimination based on sexual orientation and gender identity, consistent with Supreme Court precedent. Creating an inclusive educational environment requires that all students have a remedy for discrimination. However, the benefits of defining Title IX to include all forms of sex discrimination extends not only to students who experience discrimination based on sexual orientation and gender identity but also to the country because more inclusive educational environments lay the foundation for a more inclusive nation. Shep Melnick: With three major revisions to Title IX's sexual harassment protections in a decade, this has been a trying time for school officials tasked with Title IX compliance. The 2020 rules stayed close to the Supreme Court's interpretation of Title IX; the current proposal sweeps much more broadly. Predicting whether the Court will eventually accept this more expansive interpretation is risky business. In the meantime, colleges must ponder whether to dispense with live hearings and cross-examination. The proposal leaves it up to schools to fashion procedures that "adequately assess the reliability of witnesses." As the Department points out, some courts have ruled that live hearings and cross-examination are essential for making such assessments; other courts have disagreed. Schools that instituted live hearings and cross-examination in response to the 2020 rules are sitting in what lawyers call a "safe harbor." Abandoning this position will invite lawsuits by those found responsible for sexual misconduct. No matter what the Biden administration decides in its final Title IX regulations, many schools will be reluctant to sail out of this "safe harbor" into a sea of judicial uncertainty. Suzanne Eckes: Title IX changes will impact transgender students' schooling experiences and help school districts develop policies that do not perpetuate discriminatory practices. Numerous studies have found that when schools treat LGBTQ+ students with dignity, it fosters a feeling of safety and improves students' overall well-being. Several state and federal courts have examined cases involving discriminatory practices in schools directed toward transgender students, which seem to align with the proposed Title IX rules. There have been at least a dozen federal or state court cases initiated by transgender students who have alleged violations under the Equal Protection Clause of the Fourteenth Amendment, Title IX of the Education Amendments of 1972, or state law when they have not been permitted to use a preferred restroom in school. Nearly all of these cases have ended in a favorable result for the transgender student. Likewise, there have been at least five federal court cases initiated by cisgender students who have claimed their right to privacy is violated when they are required to share a restroom with a transgender student at school. In these decisions, courts have found no right to privacy. The proposed rule seems to align with these earlier court decisions. Question 3: Title IX rules and enforcement have changed markedly across recent presidential administrations. Is this something the public should be concerned about moving forward?Kimberly J. Robinson: Many of the changes to Title IX rules and enforcement reflect progress in extending its protections to forms of sex discrimination that too often went unrecognized, unreported, or unaddressed. However, one administration's progress can be defined as another administration's retrenchment. Setting aside Title IX and athletics (which is not addressed in the proposed regulations), it is essential to recognize that despite ongoing disagreement between presidential administrations, much of the ongoing debate is about how Title IX will address sexual assault and harassment rather than whether Title IX will address it. Although the progress is not linear, this still represents critical progress that is making our schools and colleges safer for all students. Hopefully, the public can find encouragement in that progress even if some disagreement endures. Shep Melnick: Why has Title IX regulation become so complicated and controversial? After all, it is hard to find a law that has been so successful in meeting its original purpose. The 1972 law was designed to open educational opportunities to women and girls. Once those doors swung open, female students rushed through, and they now outperform male students in almost all respects. The source of the controversy, as I describe in The Transformation of Title IX, is the subtle shift in the purpose of regulation from educational opportunity to changing the way all of us think about sex, gender, and sexuality in general. Behind the oscillation of Title IX policy lies a battle between two understandings of its purpose. According to the vision first articulated by the Supreme Court in 1998-99, schools must take action against individual students or employees who engage in sexual misconduct so serious that it deprives specific students of the opportunity to receive an education. The Trump administration's 2020 regulations followed this relatively narrow understanding, with a focus on spotting and punishing the "bad apples" who engage in serious misconduct. The 2022 proposal, in contrast, endorses what the Obama administration called a "new paradigm" on sexual harassment, one far removed from the Supreme Court's interpretation of Title IX. According to this approach, the problem is not a few bad apples but rather a "rape culture," especially on college campuses. The Biden administration's focus is changing that culture, as the President frequently emphasizes. This entails a much broader set of actions, from requiring an assortment of trainings to expanding the responsibility of educational institutions. As federal regulation swings between these competing understandings of Title IX, schools throughout the country struggle to figure out how to comply with conflicting administrative rules and court decisions. Suzanne Eckes: Presidential administrations often release their interpretations of federal rules through guidance documents. These documents are not legally enforceable, but they provide helpful information for school officials. The Obama administration used non-binding guidance documents—not regulations—to communicate its interpretation of Title IX's protections for transgender students. This made it easy for the Trump administration to rescind the guidance. The Biden administration is pursuing the formal rulemaking process, which would give its interpretation deference in court. The Biden administration's interpretation of the law, which includes a prohibition on discriminating against someone based on sexual orientation and gender identity, is expected to be formally written into the regulation. If enacted, the U.S. Department of Education's proposed rule will protect the rights of LGBTQ+ students who simply want to be included in school-related activities. Some Republican governors and state legislators referenced the Biden administration's potential Title IX's protections for transgender students as a motivating factor for legislation attacking transgender female athletes. In fact, a coalition of 20 state attorneys general are suing the U.S. Department of Education to stop it from enforcing its interpretation of Title IX—a lawsuit that is pending in a federal district court. Notably, the proposed rule does not address the athletics issue. This posting includes an audio/video/photo media file: Download Now |
| Hutchins Roundup: Inflation expectations, remote work, and more Posted: 30 Jun 2022 08:00 AM PDT By James Lee, Eric Milstein, Nasiha Salwati, Louise Sheiner What's the latest thinking in fiscal and monetary policy? The Hutchins Roundup keeps you informed of the latest research, charts, and speeches. Want to receive the Hutchins Roundup as an email? Sign up here to get it in your inbox every Thursday. CONSUMERS EXPECT HIGHER INCOME GROWTH WHEN THEIR INFLATION EXPECTATIONS RISEUsing a randomized control trial with 25,000 U.S. participants, Ina Hajdini of the Federal Reserve Bank of Cleveland and co-authors find that information shocks that raise consumers' inflation expectations cause them to expect higher income growth but not at a rate that keeps up with inflation. Specifically, the authors find that a 1 percentage point increase in consumers' inflation expectations raises their income growth expectations by 0.2 percentage point (equivalent to a 0.8 percentage point decline in their expectations for real income growth). High-income and male consumers expect their nominal incomes to grow faster in response to the inflationary shock than do their low-income and female counterparts, the authors find. Furthermore, increases in inflation expectations make consumers more likely to look for a new job that pays higher wages while their willingness to ask for a raise or work more hours at their current job remains unchanged. The results suggest that consumers perceive their current wage contracts to be rigid and consequently expect to be less well-off following inflationary shocks, "which can explain why consumers associate higher inflation expectations with worse economic outcomes," the authors conclude. REMOTE WORK HAS MODERATED WAGE-GROWTH PRESSURESFielding new questions in the Atlanta Fed's Survey of Business Uncertainty, Jose Maria Barrero and co-authors find that the recent shift to remote work has lessened wage-growth pressures. About 40% of respondents say their firm has expanded remote work opportunities to keep workers happy and to moderate wage-growth pressures. A similar number say their firm plans on allowing remote work over the next 12 months to restrain wage pressures. By aggregating and weighing responses based on the size of each business, the authors estimate that remote work will lower cumulative wage growth by 2.0 percentage points from April/May 2020 to April/May2022, which would lower labor's share of national income by 1.1 percentage points. Remote work also may explain the decrease in wage inequality observed since early 2020, because the benefits of remote work go disproportionately to higher-income workers. US INFLATION IS MORE DEMAND-DRIVEN THAN EURO AREA INFLATIONUsing a macroeconomic model that incorporates global trade linkages, Julian di Giovanni of the New York Fed and co-authors find that aggregate demand shocks account for 2/3 of the rise in pandemic-era inflation while sectoral supply shocks account for the other 1/3. In contrast, demand and supply shocks each account for about 1/2 of Euro area inflation, reflecting a larger role for supply-chain related factors relative to the U.S. Additionally, the authors find that Euro area inflation has been primarily driven by factors outside of the Euro area. Relative to the 2008-09 trade collapse, the authors show that international trade during the pandemic has been less responsive to fluctuations in output, suggesting that supply chain disruptions have been more significant in the current episode. CHART OF THE WEEK: ENERGY PRICES RISING SHARPLY
Chart courtesy of the Wall Street Journal Quote of the week:"So right now … we're trying to move expeditiously to something that's in the range of more neutral, which I'm comfortable thinking of that right now is around 3.1%, because that's a neutral rate of about 2.5% and some drift in inflation expectation," says Mary Daly, President of the Federal Reserve Bank of San Francisco. "So if you think about that, that we need to move expeditiously to get there, then 75 [basis points] seems a good starting point, but we have to be data dependent. And if we get more tightening or a broader slowdown in the economy, then I currently expect and it happens more quickly, then anything between 50 and 75 seems like a reasonable thing to consider. We'll get closer to knowing exactly what that will be as we get more data and get closer to the actual meeting. But the main message there is that moving expeditiously to withdraw the accommodation that's currently in the economy from monetary policy is a priority because…you'd really have to go into the world of a shock that's a completely unexpected event to suggest that the economy needs the support we're currently giving it." The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation.
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| Dobbs, another frontline for health equity Posted: 30 Jun 2022 06:54 AM PDT By Keon L. Gilbert, Gabriel R. Sanchez, Camille Busette Never has the health and well-being of any population been advanced through laws and practices that restrict access to health care, medicines, or new technologies. However, in overturning Roe v. Wade, the U.S. Supreme Court (SCOTUS), will now not only restrict access to reproductive health care, but will also fuel a public health syndemic, characterized by disease clusters that are shaped by social, economic, and political determinants that lead to health inequalities and injustices. The Dobbs decision affects real people, with generational consequences in multiple realms for all Americans. It will also reset the political dynamics in the U.S., re-establishing the politics of reproductive care as a central, contested element of U.S. elections. The decision's long-term consequences will not only include health and political impacts but will also have implications for economic mobility as well as for state fiscal spending. What is the health care impact of restricting abortions?Abortion restrictions do not decrease abortion rates. Globally, abortion rates are nearly the same in countries that prohibit them or have provided legal access, which is between 36 to 47 and 31 to 51 abortions per 1,000 women between the ages of 15 and 49. In the U.S., data from the Centers for Disease Control (CDC) report that abortion rates are highest among women in their twenties, and lowest for young people less than 15 and women 40 and older. Eighteen percent of pregnancies in the U.S. end in abortion. Countries with legal pathways for abortion have, in comparison to countries without legal pathways, high rates of contraceptive use to help manage and reduce unintended pregnancies, and stronger health care systems with access to reproductive health care. Reducing access to abortions does not reduce the number of abortions, rather, it has the effect of reducing access to reproductive health care.
The Dobbs decision delegates pathways to abortions to states without any guidelines. So, reducing access to reproductive health care will be decided by states. As we know, some states are already implementing "trigger" laws prohibiting abortion that came or will come into effect as a result of the overturning of Roe v. Wade. Others will use older, "zombie" laws, restricting abortion that were already on the books, prior to the original Roe v. Wade decision that legalized abortion in the U.S. And yet others will offer abortions and will codify that right either in new laws or in state constitutions. The momentum behind the shift in where reproductive health care will be available is also being accelerated by several major corporations such as Amazon, Disney, JP Morgan Chase, and Microsoft which have already communicated and are examining policies to cover costs for abortions in other states. In this reproductive health rights tracker, we have captured current health indicators and rankings of states with no abortion restrictions, with abortion restrictions, and those with trigger laws for abortion restrictions. Of the 13 states that have an immediate trigger law, 9 of them rank number 30 or lower in overall state health using data from America's Health Rankings. More than 10 of these states rank in the bottom half for public health and healthcare quality. The Dobbs decision will relegate no-cost or lower cost reproductive services that are more commonly accessed and utilized by lower income women and women of color to those states that offer abortion care, and out of reach for those women without the means to access these services. In fact, in many states, the number of reproductive health clinics performing abortions has already declined, and more will disappear as a result of the Dobbs decision, further limiting access to primary health care and preventative screenings. In states restricting access to abortions, the women most likely to face immediate negative health and socioeconomic consequences are low-income women and/or women of color. As we already know from more than two years of the COVID-19 pandemic, those communities which have historically and currently experienced exclusion in health care are more likely to die from treatable conditions; more likely to die during or after pregnancy and to suffer serious pregnancy-related complications; and more likely to lose children in infancy. The Dobbs decision will continue, if not exacerbate, these patterns. In fact, one of the most important consequences of the Dobbs decision is that it reinscribes denial of access to reproductive health care as a form of racism and sexism. Forms of reproductive injustice from political malpractice began legally as early as 1873 Comstock Act which defined contraceptives as obscene and illicit. Through this law, the United States Postal system was used to track and police the distribution of contraception and limit the distribution of birth control by physicians only. And with low-income women and women of color less able to access regular medical care, reproductive health care also became a form of racism and sexism. Dobbs brings continues this legacy of health inequity. When we consider this in the context of a very thin social safety net, a lack of parental leave policies and adequate childcare, the U.S. will continue to cultivate the conditions for a permanent underclass of low-income families and families of color. States most eager to restrict or prohibit abortions as a result of Dobbs will experience deeper health inequities and those health inequities will also have medium to long-term effects on the quality of a state's workforce and on its expenditures on health care. Eight states in this category, have state level child well-being rankings above 30. The quick movement by states to make abortions illegal will not only impact the health and well-being of the communities within those states, but in adjacent states where access to reproductive health will remain in place. For example, there has already been a notable increase in women traveling to New Mexico, a state that has been a leader in providing access to abortions and other reproductive health services. New Mexico's healthcare system is already spread incredibly thin, so a stream of out-of-state residents visiting the state to utilize the reproductive health services may overwhelm the system and limit the ability of state residents to get the care they need. In the immediate aftermath of the Dobbs decision, then, abortions are not ending. Rather, access to reproductive healthcare has been curtailed and re-apportioned by state, by race, and by income. This is where we are in 2022. The Political Impact of DobbsWhile it is not unusual for SCOTUS decisions to be at odds with public opinion, the Dobbs decision abruptly reestablishes abortion as a central schism in American politics to be contested in elections, judicial appointments, and media. With only 13% of the American population believing that abortion should be illegal in all circumstances, according to Gallup's polling, the Dobbs decision is divergent from the views of the majority of the American public. This 13% is significantly lower than the 35% who believe abortion should be legal under any circumstances or the 50% who believe that it should be legal only under certain circumstances. When combined, a robust 85% of Americans believe that there are circumstances that should allow women to have access to an abortion. Given these views on abortion, it is not surprising that an NPR poll conducted over the weekend found that a majority (56%) of Americans oppose the Supreme Court's decision. Although women are (+5%) more likely to oppose the decision, the majority of both men and women stand in opposition to the decision. The majority of Americans, regardless of race, also express support for providing access to legal abortion. According to Pew Research Center's most recent data, however, there are important differences to note. Asian American (74%) and Black American (68%) respondents were more likely to agree with the statement that "abortion should be legal in all or most cases" compared to Latino (60%) and White (59%) respondents. There is a similar trend in the CMPS survey, with Black and Asian Americans being more likely to express that "abortions should remain legal in the United States" at 59% relative to Latino (53%) and White (50%) Americans. In a 2020 survey of Native Americans in New Mexico found that 81% of Native Americans agreed with the statement "women and families deserve to make their own healthcare decisions without government interference." Native American leaders have voiced their opposition to this decision, noting that this may generate even more violence for Native American women. Politically, it is clear that this issue will have a marked impact on the upcoming midterm elections. NPR's recent polling in fact found that 78% of Democrats are more energized to vote following the decision, 24% higher than Republicans. Given that a slight majority of Americans in the poll said they would vote for a candidate who would support a federal law to restore the right to an abortion, the intense debate that lies ahead may provide a more competitive election season than was projected for Republicans. Beyond the midterms, it is clear that the Dobbs decision will be a central focus of political tension for decades to come. States will continue to be on the frontlines of that struggle, but so too, will pharmaceuticals, and the miserly social safety net policies that will be strained as so many families navigate an abrupt change in family planning and reproductive health care in this country. The central policy question that will confront us, is how do we improve reproductive health care, rendering it more equitable, in the wake of Dobbs? For low-income women and women of color, in the short term, that will mean that local governments will have to improve access to telehealth, integrate reproductive care with other types of care and make it more accessible. It will mean improving sex education in schools and access to contraceptives, and it will mean boosting childcare and parental leave policies and subsidies. These are tall orders for local governments, but they will be in the frontlines of the new battle for health equity. <<Download the reproductive health rights tracker>> This posting includes an audio/video/photo media file: Download Now |
| The end of Roe will create more inequality of opportunity for children Posted: 30 Jun 2022 06:00 AM PDT By Isabel V. Sawhill, Morgan Welch On June 24, 2022, the Supreme Court overturned its decision in Roe v. Wade, which established a constitutional right to abortion. As many as 28 states are now expected to ban or restrict abortion. Many women from these states will seek an abortion in another state or access a "medical abortion" but many others, less able to travel or get a prescription for the abortion pill in a timely fashion, will end up carrying an unintended pregnancy to term. As we document in this brief, the states expected to restrict or ban abortion rank among the worst in the country for the well-being of their children, in part because they spend the least to support them. As a result, in the wake of the Court's decision, inequality of opportunity will almost surely increase. Children born in states where abortion is restricted are already disadvantaged compared to other children and unless these same states match their interest in saving fetal lives with increased investment after the children are born, their future prospects will be seriously compromised. A post-Roe AmericaIn thirteen trigger states, abortions are now illegal or will be illegal within 30 days – these states are Arkansas, Idaho, Kentucky, Louisiana, Mississippi, Missouri, North Dakota, Oklahoma, South Dakota, Tennessee, Texas, Utah, and Wyoming. While some of these states have exceptions for cases of rape or incest, a majority of them only recognize an exception to the ban if the woman seeking an abortion is at risk of death. Up to an additional 15 states are likely to attempt a ban or further restrict abortion access following the Roe decision. There are a number of states that already have laws in place to protect abortion rights. These states are Washington, Oregon, California, Nevada, Colorado, Illinois, New York, New Jersey, Maryland, Vermont, Massachusetts, Connecticut, Delaware, Maine, Rhode Island, and Hawaii. However, the states that ensure abortion access are outnumbered by those that have banned or are likely to ban or restrict abortion. Without Roe, these restrictions will leave nearly half of women living in a state with no or restricted abortion access. According to an estimate by a team of economists, roughly 100,000 women in the first year following the Roe decision will be unable to access a legal abortion provider. Some will miscarry and some may obtain an illegal abortion. In the end, about 75,000 women who would have had an abortion are likely going to give birth over the next year, according to an estimate by Caitlin Knowles Myers. How will children's lives be affected? Women who seek abortions are more likely to be living below the poverty line, to already have children, and to be experiencing a disruptive life event, like a job loss or breakup of a relationship, which are not ideal circumstances for caring for a child. One famous study showed that women who sought an abortion but were denied one fared worse when compared to a similar group that terminated their pregnancy. Adverse consequences for these women included financial hardships, health complications, and other deleterious effects, such as the need to remain in an abusive relationship or raise a child alone, which are likely to affect their child's well-being.
The unplanned pregnancy rate is higher in states expected to ban or restrict abortion. Should abortion restrictions lead to more unplanned births in a post-Roe world, we can expect worse outcomes for these children and their families. For example, Sawhill and Venator estimate that if all currently mistimed births were instead aligned with the timing preferred by their mothers, as reported by their mothers in a government survey after the birth of the child, the children's college graduation rates would have increased by eight percentage points and their lifetime incomes by around $52,000. Do states likely to restrict abortion have a good pro-family track record? Most people who are pro-life presumably want the best for children and the families raising them after the child is born. However, the states expected to restrict or ban abortion rank among the worst in the country in terms of child well-being and public spending that supports children. To measure state support of children, we ranked states based on a combined index that takes into account two important factors: the overall well-being of children and the total spending per child in each state.[1] The child well-being component of our index was developed by the Annie E. Casey Foundation Kids Count Data Center and is comprised of 16 indicators of economic, educational, health, and community well-being, including the share of children in poverty, reading and math proficiency, low birth weight, and teen births, among others.[2] State expenditures per child come from the Urban Institute's State Spending on Kids Dataset, which includes comprehensive spending on children in the areas of economic support, education, health, and community/infrastructure (e.g., parks and libraries).[3] Together, these rankings give us a good idea of how children are faring in each state and how much the state is investing to support them. Based on these rankings, we find that the 10 most child-friendly states also have some of the most liberal abortion policies. These states are Vermont, Massachusetts, Connecticut, Wyoming, New York, Maine, New Jersey, Minnesota, Rhode Island, and Pennsylvania. Of these 10 child-friendly states, only one has a trigger ban in place, while the other nine do not have any laws that would ban or restrict abortion following a Roe reversal. Most of the child-friendly states protect abortion in their state law, state constitutions, and have created expanded access to abortion care. Additionally, most of the states at the top of our ranking make abortions available up to viability, which is typically considered to be 24 weeks. After that, a number of these states have exceptions past viability for a medical emergency that would threaten a woman's life. In Vermont, which is at the top of our ranking, abortion is legal at all stages of pregnancy and there are no legal barriers that would make it more difficult for women to obtain an abortion, such as waiting periods or mandatory parental consent.
Conversely, the states where children are more likely to be born into the worst circumstances, and are receiving the least support after birth, also tend to be the ones that are restricting a women's right to choose. The bottom 10 states in our ranking are: Missouri, Idaho, Florida, South Dakota, Tennessee, Arizona, Oklahoma, Georgia, Nevada, and Texas. Of these states, six currently have a trigger ban in place that would go into effect following the Roe decision. Three additional states have restricted abortion to the first six weeks of pregnancy (Georgia) or the first 15 weeks (Arizona and Florida).[4] These states rank lower on our index because they have higher rates of child poverty, more children living in a single parent family, and worse educational outcomes for young children; and they spend relatively little per child, which undoubtedly contributes to these worse outcomes. Collectively, the bottom 10 states only spend 60 percent of the amount that the top 10 states spend per child. One notable difference in spending is due to whether or not a state chose to expand Medicaid. Six of the states in our bottom 10 list did not adopt Medicaid expansion. Conclusions Abortion has been a contentious topic. People on both sides feel passionately about the issue. One objective of the recent Supreme Court ruling is to return this difficult decision to the states, thereby allowing a more varied local response in keeping with the divergence of public opinion. But one clear result of the decision will be to expose America's children to even more unequal childhoods and lifetime opportunities than currently exist – unless those who support the Supreme Court's recent decision advocate for stronger social policies at the state and federal level to make sure that the welfare of children is supported not just before, but also after, birth. Footnotes [1] To create a combined ranking, we took the simple average of the state rankings based on child well-being and total expenditures on children per child. [2] See the full Annie E. Casey Foundation Kids Count report for more information on the child well-being index: https://www.aecf.org/resources/2021-kids-count-data-book [3] Our rank presented here uses the state by state spending on children dataset, which includes total state and federal spending on children per child in 2016. We also ranked the states based on state-only and mixed federal and state expenditures (eliminating the federal programs) and found a similar trend. Details available from the authors on rankings upon request. [4] Florida's 15-week abortion ban will go into effect on July 1, 2022. Arizona’s Governor Doug Ducey signed a 15-week abortion ban back in March 2022. The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation. This posting includes an audio/video/photo media file: Download Now |
| Why the FTC should proceed with a privacy rulemaking Posted: 29 Jun 2022 08:58 AM PDT By Mark MacCarthy On June 3, the House Committee on Energy and Commerce released a draft federal privacy bill, the American Data Privacy and Protection Act. According to an accompanying press release, the draft has support from U.S. Representatives Frank Pallone, Jr. (D-N.J.) and Cathy McMorris Rodgers (R-Wash.), Chairman and Ranking Member of the House Committee on Energy and Commerce, as well as U.S. Senator Roger Wicker (R-Miss.), Ranking Member of the Senate Committee on Commerce, Science, and Transportation. When the bill was formally introduced into the House on June 21 as H.R. 8152, it also had the co-sponsorship of Consumer Protection and Commerce Subcommittee Chair Jan Schakowsky (D-Ill.), and Subcommittee Ranking Member Gus Bilirakis (R-Fla.). The next day, an amended version of the bill was reported favorably out of the Subcommittee on a voice vote. Privacy law scholar Peter Swire properly welcomed this Federal privacy proposal as a "big deal." If adopted, Swire notes, it would replace the patchwork of state privacy laws with a consistent national policy. Even if it does not pass this year, he adds, its compromises in the areas of state preemption and private rights of action would set the template for a new national privacy law that might pass "in the next Congress or two." Former Commerce Department General Counsel Cameron Kerry, now at the Brookings Institution, also called the draft a "huge deal." He thinks it has narrowed the partisan differences on the bill and creates a genuine path to enactment this year. He urges Congress not to "miss this opportunity to get the job done—before election priorities close the window." But such a hope is not a strategy to provide timely privacy relief for consumers who have been abused by industry privacy practices for decades. Despite impressive bicameral, bipartisan support and legislative progress in the House, the proposal faces strong opposition in the Senate. It does not even have the backing of Senate Commerce Committee Chair Senator Maria Cantwell (D-Wash.), who can determine whether the bill is brought up for a Committee vote. She thinks the draft has "major enforcement holes" and is too weak as it stands to override state privacy laws. She intends to pursue her own bill, which is even less likely to pass the Senate than a bipartisan bill. The proposed bipartisan draft is a better vehicle than a partisan measure. But it is extremely unlikely to get the 60 votes needed to pass the Senate this year. Senator Cantwell thinks that the Senate Majority Leader Senator Chuck Schumer (D-N.Y.), won't even bring it to the Senate floor for a vote. The possible merging of abortion issues with privacy issues would further dim its legislative prospects this year. It has even less of a chance in the coming years as Republican leaders will likely control the next Congress and perhaps the next Administration. Once in control, they are almost certain to back away from needed Federal privacy rules for the foreseeable future. A more promising response to the urgent privacy policy challenge would be for the Federal Trade Commission to open a privacy rulemaking under its Section 18 authority and to establish binding privacy Federal regulations for all the industries under its jurisdiction. FTC Chair Lina Khan and Commissioner Rebecca Slaughter have already indicated they favor this approach. The agency has twice noticed its intention to proceed with a privacy rulemaking. With the recent addition of privacy advocate Alvaro Bedoya as a third vote, the Commission can and should move ahead with this regulatory approach. The Commission's Section 18 AuthorityIn 1975, Congress passed the Magnuson-Moss Warranty Act that imposed greater procedural burdens on FTC rulemaking than are required under the Administrative Procedure Act. Further constraints were added in 1980. Codified at 15 U.S. Code § 57a, these procedures require the agency to publish for public comment an Advance Notice of Proposed Rulemaking (ANPRM) before initiating a rulemaking and in addition publish for further public comment a Notice of Proposed Rulemaking (NPRM). The agency must submit in advance both this ANPRM and NPRM to its Congressional oversight committees. The agency is also required to resolve any disputed issues of material fact through an informal hearing that provides limited cross-examination rights to interested parties. It must publish a Final Rule accompanied by a statement of basis and purpose. This infographic from the International Association of Privacy Professionals outlines the process. Under Section 5 of the FTC Act, the Commission is able to take action against unfair or deceptive acts or practices. Section 18 authorizes the Commission to prescribe "rules which define with specificity acts or practices which are unfair or deceptive acts or practices…" The Commission may initiate a Section 18 when it has reason to believe that the practices to be addressed by the rulemaking are "prevalent." The Commission enforces knowing violations of its rules through civil penalties under 15 U.S. Code § 45(m)(1)(A) obtained by filing a suit in federal district court. Companies that violate a Section 18 rule are also liable for injury caused by a violation of a rule, but not for punitive damages. The "Magnuson-Moss" procedures provide substantial transparency, due process protection, and an opportunity for the public and businesses to express their views. Perhaps because of the greater procedural burdens compared to the rulemaking processes under the Administrative Procedure Act, it has been assumed for decades that it is too difficult for the FTC to use its rulemaking authority to address the unfair and deceptive practices rampant in today's digital industries. But many of the obstacles to efficient rulemaking are self-imposed through agency administrative rules and reflect an institutional culture of caution. In March 2021, Acting Chairwoman Rebecca Slaughter formed a task force designed to identify possible candidates for Section 18 rulemaking, noting that the process could reduce consumer harms through rules and civil penalties. In July 2021, the FTC streamlined its Section 18 process rules in a way that will allow it to avoid unnecessary delays and still maintain the statutory procedural protections. As former FTC Consumer Protection Bureau head Jessica Rich has noted, obstacles still remain, especially the amount of time a procedurally defensible Section 18 rulemaking would take. But these streamlined procedures open the way for the FTC to use its Section 18 authority in a significant way for the first time since the 1970s. An FTC Section 18 Privacy RulemakingOne of the first applications of these streamlined procedures might be in the area of privacy. President Biden's July 2021 Executive Order urged the FTC to use its rulemaking authority to address "unfair data collection and surveillance practices that may damage competition, consumer autonomy, and consumer privacy." In September 2021, a group of eight Democratic Senators led by Senator Richard Blumenthal, D-Conn urged the FTC to "undertake a rulemaking process with the goal of protecting consumer data." In December 2021, Chair Khan released the agency's regulatory priorities noting that the agency was considering whether a rulemaking on the "alarming . . . abuses stemming from surveillance-based business models" would be effective in "curbing lax security practices, limiting intrusive surveillance, and ensuring that algorithmic decision-making does not result in unlawful discrimination." In its December 2021 filing with the Office of Management and Budget, the agency indicated that it was considering such a rulemaking. In June 2022, the FTC refiled its notice to proceed with this privacy rulemaking, adding its intent to launch an ANPRM in June 2022. Individual Commissioners had been recommending this step for some time. In a law review article published in August 2021, Commissioner Rebecca Slaughter argued that the FTC should use its Section 18 rulemaking authority to address "the area of algorithmic justice" that might "affirmatively impose requirements of transparency, fairness, and accountability." In an October 2021 address to the International Association of Privacy Professionals, Commissioner Slaughter added that the FTC should exercise its Section 18 authority to "develop a public, participatory record" and use it to establish "bright-line rules around what data can be collected and how it can be used." Her preferred "data minimization" approach would replace the traditional "notice and choice" framework with substantive constraints on data collection and use. In April 2022, FTC chair Lena Khan reiterated that the FTC was considering a Section 18 privacy rulemaking. She joined Commissioner Slaughter in questioning the dominant "notice and consent" model of privacy governance and indicated that the FTC might consider "substantive limits rather than just procedural protections" and focus on "whether certain types of data collection and processing should be permitted in the first place." On May 16, the Senate confirmed the newest FTC Commissioner, Alvaro Bedoya, who would almost certainly give Chair Khan the three votes needed to initiate a privacy rulemaking. Commissioner Bedoya is a strong privacy advocate. He was the founding director of the Georgetown Law Center on Privacy and Technology which focused on digital privacy issues. He also dealt with privacy issues as chief counsel of the U.S. Senate Judiciary Subcommittee on Privacy, Technology and the Law. He will clearly play a strong part in implementing the FTC's privacy agenda. "What Chairman Khan is to antitrust, Alvaro Bedoya is to privacy, data protection, and civil rights," said John Davisson, senior counsel at the nonprofit Electronic Privacy Information Center. What about preemption and private rights of action?The detailed outcome of an FTC privacy rulemaking is hard to discern at this point. It would almost certainly go beyond notice and consent. Depending on the agency's assessment of its rulemaking authority, it might very well mimic the regulatory requirements contained in the breakthrough draft Congressional privacy proposal, including measures on transparency; user rights to data access, correction, deletion, and portability; a ban on algorithmic discrimination; disparate impact assessments for algorithmic applications; an opt-out of targeted ads; a ban on targeted ads to users under 17; and mandates for privacy impact assessments. One of the primary reasons for a national data standard has been the quasi-settling of state preemption and private right of action. The real breakthrough in the draft Congressional proposal was compromise on these contentious issues. It proposed to pre-empt a specific list of state privacy laws, while leaving general consumer protection law and state privacy torts untouched. It also proposed a 4-year delay on private rights of action and then a limitation on remedies to injunctions and recovery of court costs and compensatory damages, without the possibility of punitive damage. This compromise would be lost under FTC regulation. FTC privacy rules promulgated under Section 18 would not preempt state law. The FTC rules would be in addition to current state privacy laws and would not prevent states from amending their current privacy laws or passing new ones. While FTC privacy rules would not create a new cause of action, it would not prevent plaintiffs from suing under existing state or federal law. Plaintiffs might argue, moreover, that violation of the new FTC privacy rules would count as evidence that consumers had suffered a cognizable injury under a cause of action authorized by current law. The need for a coherent national privacy policy and some constraints on private rights of action argue for Congressional action. This is one reason that a legislative approach, if it were a realistic possibility, would be the preferred way forward. But in the absence of a realistic possibility of legislative movement, FTC privacy regulation, even with its inability to preempt state law and limit private rights of action, is the best practical path. Would Congress overturn an FTC privacy rule?Independent regulatory agencies are creatures of Congress, properly autonomous with respect to the incumbent Administration but responsible to their Congressional authorizing and appropriating committees and ultimately accountable to the will of Congress through the Congressional Review Act. Under this Act, passed by a Republican-controlled Congress in 1996, it is relatively easy for Congress to discipline an out-of-control regulatory agency. A motion of Congressional disapproval motion under the CRA is privileged—it cannot be filibustered in the Senate and requires only a majority vote to pass. If the FTC established its own privacy regulations, would an affronted Congress rein in what it perceives to a rogue agency? It has happened to the FTC before. In response to the attempt by the FTC under Michael Pertschuk in the 1970s to promulgate children's advertising rules that even the Washington Post described as the actions of a "national nanny", Congress stripped the agency of rulemaking power in connection with unfair acts and practices. It regained this authority only through a legislative compromise in 1994 that defined consumer unfairness more narrowly in cost-benefit terms. More recently, Congress used the Congressional Review Act in 2017 to repeal the 2016 broadband privacy rules established by the Federal Communications Commission under former Chairman Tom Wheeler, an action that also stripped the agency of power to establish substantially similar rules without approval from Congress. These precedents suggest that the FTC would be well advised to act with some prudence as it goes forward with a privacy rulemaking. The key requirement of prudence is to consult regularly with Congressional privacy leaders in establishing final privacy rules. Privacy allies in the Senate might not have 60 votes to pass a national privacy law. But they probably would have the 51 votes needed to defend an FTC privacy regulation from a motion of Congressional disapproval in a Republican-controlled Senate. To establish a lasting privacy regime, the FTC would have to ensure that its Congressional privacy allies are invested in its privacy regulation. Losing these privacy allies by promulgating rules far beyond the Congressional privacy consensus would greatly increase the danger of Congressional reversal. It is time to actAn FTC privacy rulemaking is a risky, second-best way to establish federal privacy policy. Congress might overturn whatever the agency seeks to establish, and if it does the agency will lose its privacy rulemaking authority until it is affirmatively restored by Congress. Moreover, I have not even touched on the chances that a court would block some or all of an FTC privacy rule on the grounds that it exceeded agency authority to control unfair or deceptive acts or practices. Court reversal of an overly ambitious FTC privacy rule, or even a balanced one, might be even more likely in light of the Supreme Court's decision to restrict the authority of the Environmental Protection Agency to regulate greenhouse gases. There is no doubt that privacy legislation would be the better path if it were realistic. It would provide clear legislative authority and direction to the agency and could touch on issues such as pre-emption and private right of action that are beyond the agency's reach. But an unachievable better path is the enemy of a good one. Congress is unlikely to enact a new privacy law, even with the progress made in the recent compromise. The agency should not wait to see what Congress does. Even with the streamlined Section 18 procedures, it will be difficult for the agency to complete a substantively and procedurally defensible privacy rulemaking before the end of this Administration. Moreover, the reality of an FTC privacy rulemaking might encourage some legislators to accept a legislative compromise rather than leave the policy decisions to the agency, making a new national privacy law more likely. If Congress does act, the agency can always suspend the process it has initiated under existing law and open fresh rulemakings to implement the new law. Given the realities of the current situation, FTC rulemaking is the best practical way forward for federal privacy policy. The agency should seize the moment and act now. This posting includes an audio/video/photo media file: Download Now |
| Stuck on the ladder: Wealth mobility is low and decreases with age Posted: 29 Jun 2022 07:30 AM PDT By Ember Smith, Ariel Gelrud Shiro, Christopher Pulliam, Richard V. Reeves The combination of increasing wealth inequality and poor prospects for upward mobility create sharp class divides which are at odds with the American dream. The top one percent held 31 percent of household wealth in 2019 compared to 24 percent in 1989, according to the Federal Reserve Board. This growing wealth gap might be of less concern if there is significant opportunity to move up the wealth ladder. But there is not. As we show in a new paper, Americans are quite unlikely to move far up (or down) the wealth ranks early in life, and their chances decrease with age. Wealth inequality is high. And wealth status is sticky. American economic immobility Conventional wisdom celebrates the United States as a place where anyone — regardless of their resources — can climb the ranks if they work hard enough. In reality, there is less movement up and down the economic ladder here than in many other countries. Most studies of economic mobility focus on income. In our paper, we focus on wealth and compare people to others their age who were born around the same time. If you are among the wealthiest of your peers in your early thirties, our findings suggest that you are also likely to be among the wealthiest in your late fifties. Similarly, if you have less wealth than your peers in your early thirties, the same is likely to be true later in life. Figure 1 shows the likelihood of a person moving from a given quintile (i.e., a group that contains a fifth of the wealth distribution) in their early thirties to another by their late fifties. These are the years when most wealth accumulation occurs. Wealth position is most rigid among those with the least and most wealth; half (49 percent) of those in the bottom wealth quintile in their early thirties are still there in their late fifties. At the other end of the ladder, half (53 percent) of those who start in the top quintile stay there.
Wealth mobility happens early When mobility does take place, it is more likely to be in the earlier decades of working life. Figure 2 shows mobility rates from the bottom wealth quintile across narrower age periods, of about ten years (e.g., mobility from late twenties to late thirties, late thirties to late forties, and so on). As Americans age, the odds of moving out of the bottom of the distribution decrease. About 61 percent of young adults in the bottom quintile in their late twenties have climbed to a higher quintile ten years later. But for those starting from the bottom rung in their late forties, just 40 percent have moved up. The odds of moving from the bottom to the top of the distribution decline even more with age. Over a quarter (28 percent) of those in the bottom quintile in their late twenties have reached one of the top two quintiles ten years later. The same is true of just three percent of those in the bottom quintile in their late forties. Wealth status is sticky at all ages – but much more so as the years pass.
Policymakers: Tackle wealth inequality early These findings suggest that wealth status is quite static and becomes more so during the key working age years. There are particular challenges facing Black Americans, which we turn to in a companion blog. Policies should aim to promote wealth accumulation among younger adults, for example through targeted home ownership subsidies, individual development accounts and matched savings plans, as proposed by our colleague Jenny Schuetz. At the same time, given the settling of wealth status in middle age, the need for robust retirement provision, especially for those who have not been able to save, is as pressing as ever. The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation. This posting includes an audio/video/photo media file: Download Now |
| The Black-white gap in wealth mobility and what to do about it Posted: 29 Jun 2022 07:30 AM PDT By Ember Smith, Ariel Gelrud Shiro, Christopher Pulliam, Richard V. Reeves After centuries of discrimination and economic exclusion, the US racial wealth gap remains stubbornly large. In our latest paper studying Americans born in the 1940s through 1960s, we show that the median white American in their early thirties had $29,000 more wealth than the median Black American of the same age. This racial wealth gap is even greater among older adults: the median white American in their late fifties had $251,000 more wealth than the median Black American. This is not just because initial wealth gaps compounded over time. As we show, even conditional on having the same wealth in their early thirties, white Americans reach a significantly higher wealth rank by their late fifties than Black Americans.
Upward mobility less likely for Black Americans On top of having less wealth than white Americans to begin with, Black Americans are both less likely to move up the economic ladder and more likely to slide down it. Figure 1 shows the estimated wealth percentile attained by Black and white Americans by their late fifties, starting from the 10th, 25th, 50th, 75th, or 90th wealth percentiles We compare people to others their age who were born around the same time.
Both Black and white Americans who have 10th or 25th percentile wealth in their early thirties are expected to improve their wealth position in their late fifties. However, Black Americans' wealth status rises at a notably lower rate. For instance, Black Americans at the 10th percentile in their early thirties are expected to reach the 24th percentile in their late fifties — 13 percentiles lower than white Americans, who are expected to reach the 37th percentile. The glass floor gap As the chart shows, wealth status is even stickier at the top end of the distribution; the wealthy are unlikely to fall too far. But this "glass floor" effect varies by race. Black Americans who have high wealth are much more likely to lose ground than white Americans with the same wealth. For example, among those who start with wealth at the 90th percentile, Black Americans have much lower wealth in their late fifties (51st percentile) than white Americans (77th percentile). We are far from closing the racial wealth gap. Our paper shows how the patterns of wealth accumulation and wealth mobility during working life contribute to this inequality. The racial wealth gap reflects different wealth dynamics as well as different starting positions. A white person who has median wealth in their early thirties is in fact expected to have more wealth in their late fifties than a Black person who has 90th percentile wealth in their thirties. Among the options for tackling the racial wealth gap are progressive taxation of wealth; bolstering the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC); reparations; targeted homeownership subsidies; and lowering the costs associated with higher education. Overall, the message of the paper is that policymakers need to pay attention to the processes driving different wealth trajectories by race, as well as the end results. The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation. This posting includes an audio/video/photo media file: Download Now |
| Good jobs are out of reach for many 20-somethings in the U.S. Posted: 29 Jun 2022 07:22 AM PDT By Martha Ross, Anthony P. Carnevale Bettors wouldn't like the odds facing many young people as they enter the labor market seeking decent-paying employment. New research from Brookings Metro and Child Trends finds that nearly 60% of adults who were socioeconomically disadvantaged in their teens continue to struggle economically at age 30—facing low earnings, high poverty rates, and many barriers to employment. Based on annual earnings and employment-related benefits, Brookings and Child Trends researchers segmented adults from disadvantaged backgrounds into four groups. One of the groups, accounting for 22% of the study population, had average annual earnings of $4,200 at age 30 and no employment-related benefits. Another 36% had average annual earnings of $19,000 and one benefit. The two other groups were more economically comfortable: 34% had average annual earnings of $42,000 at age 30, and the last 9% had average annual earnings of $97,000.
Another report from the Georgetown University Center on Education and the Workforce shows that the age at which the majority of young adults attain a good job has shifted from their mid-20s to early 30s. (A "good job" is defined as paying at least $35,000 per year and $57,000 at the median for workers ages 25 to 35 nationally, with adjustments based on cost-of-living differences across states.) The report also shows that only young adults with a bachelor's degree or higher are consistently more likely to have a good job than the previous generation. The majority of workers with a high school diploma or less do not attain a good job by age 35. These findings are stark, but when you consider the nation's education, training, and employment policies, you can't exactly call them a surprise. K-12 education, postsecondary education, and the workforce development system all operate in different silos—with different incentives, rules, and governance structures, and none are adequately connected to the labor market. The field of positive youth development offers effective practices for reaching young people, but they are unevenly recognized and incorporated by those charged with educating young people and preparing them for employment. For large shares of young people (and disproportionately those who are female, Black, and Latino or Hispanic), we have normalized a path from high school to low-wage employment, unemployment, and poverty. Less than 40% of young Black and Latino or Hispanic men in the workforce have a good job, and the likelihood of having a good job is even lower for Black and Latino or Hispanic women. In their research, Brookings Metro and Child Trends identified gender and race as significantly associated with earnings, even after controlling for other factors relevant to employment. Women had a greater probability of belonging to a lower-earning group than men, and Black people were more likely than white and Latino or Hispanic people to belong to a lower-earning group. That some groups of people are concentrated in low-paying jobs is the logical outcome of our existing policies. It is time to reject this pattern and create the conditions for all young people to thrive. If youth policy is meant to guide all young people to economic independence as adults, we need fundamental, comprehensive reform. We need an “all-one-system approach" that breaks down the barriers between pre-K-12 education, postsecondary education, and the labor market. An all-one-system approach would provide young people with a smooth and flexible continuum of support throughout their education and entry into careers. It would include facets such as high-quality universal early childhood education; career exploration, guidance, and preparation starting in middle school and extending into high school and college; and more opportunities to earn college credit in high school through practices like dual enrollment. It would facilitate smoother transfers between community colleges and four-year institutions; offer more work-based learning experiences such as internships, work-study programs, and apprenticeships; and encourage more collaboration between employers and education providers. Importantly, these practices would be supported by a robust data system linking individual-level data (with privacy safeguards) from K-12, postsecondary, and employment systems, which would facilitate coordination and ensure transparency and accountability. There are multiple examples of creative, effective programs that model these approaches, such as Linked Learning, Year Up, Braven, Per Scholas, and Genesys Works, among others. However, these programs do not have the scale, funding, or capacity to compensate for the systemwide “triple deficits" of inadequate access to postsecondary education, limited exposure to high-quality work experience and work-based learning, and insufficient counseling to support career navigation. Systemwide reforms and policy changes at the federal, state, and local levels will be necessary to fundamentally change the equation for young people from marginalized backgrounds. While broad action at the federal level is unlikely in the near future, some legislators are taking steps toward an all-one-system approach. For example, the version of the America COMPETES Act that passed in the House earlier this year included a bipartisan amendment that incorporated the provisions of the College Transparency Act (supporting a more comprehensive data system) and another measure that would allow Pell Grants to be used for qualified short-term training programs. At the same time, a growing number of states and public institutions are collaborating with the U.S. Census Bureau as it expands its Post-Secondary Employment Outcomes Initiative, which will enable stakeholders to assess the employment and earnings outcomes of students who enter the national labor market. In addition, a substantial number of states are recognizing the importance of tools that expand career readiness in K-12 education, including personalized academic and career plans, career counseling, and work-based learning. In the long run, full commitment to an all-one-system approach is imperative for both our country's economic competitiveness and our ability to offer equitable opportunity to all young people, including those from marginalized backgrounds. Youth and young adults deserve an equal chance to make something of their talent and potential while attaining economic security. As our respective research makes clear, we have a lot of work to do as a country to improve the odds for today's young adults. This posting includes an audio/video/photo media file: Download Now |
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