It would appear that the latest "Specially Elected" Congressman is against Free-Trade. John Tusani posted this blurb on the Working Life Site.
"One of the very under-the-radar things that happened when the Democrats took the seat in Mississippi was that the newly-elected Congressman, Travis Childers is a "fair trade" proponent and won't support any so-called "free trade" deals:
Childers has signed a pledge not to approve any international trade agreements if he's elected, saying that deals such as NAFTA have made jobs disappear."
For those of you reading this that think this is normal for Democrats think again. He was elected in one of the most conservative thinking districts in the United States. Northern Mississippi is tough on Democrats, I know I lived there for a time. This is very progressive and very beneficial to the Labor movement.
Sunday, May 18, 2008
Monday, May 5, 2008
Free Trade or Fair Trade...?
Joh Tsuani, who has more time to read than I, found this in the Wall Street Journal about what Sherrod Brown had to say about the Colunbia "Free" Trade Agreement.
Sen. Sherrod Brown, one of the best legislators in the Congress on just about every issue but certainly on trade, had an opinion piece in The Wall Street Journal yesterday that called "Don't Call Me a Protectionist". Taking on the issue of the so-called "free trade" deal with Colombia, here's the key passage:
Let's focus on the merits of the agreement. Supporters sell it as a free-trade agreement, a great opportunity for American companies because it eliminates tariffs on our products. If that were true, the agreement would be a few lines long.
Instead, we have a trade agreement that runs nearly 1,000 pages and is chock full of giveaways and protections for drug companies, oil companies, and financial services companies, and incentives to outsource jobs now held by Americans.
Nafta. The Central American Free Trade Agreement. China. Now Colombia. We have a pattern in our trade policy that aims to protect special interests, but betray our workers, our environment, our communities.
Let's stop accusing one another of being protectionists. And let us agree that U.S. trade policy – writing the rules of globalization to protect our national interests and our communities – is worthy of a vigorous national debate.
Readers of this blog know that I've made this repeated argument--that we should debate trade and the rules being set up, not dumb marketing phrases like "free trade". Good for Sherrod for pushing this point.
Sen. Sherrod Brown, one of the best legislators in the Congress on just about every issue but certainly on trade, had an opinion piece in The Wall Street Journal yesterday that called "Don't Call Me a Protectionist". Taking on the issue of the so-called "free trade" deal with Colombia, here's the key passage:
Let's focus on the merits of the agreement. Supporters sell it as a free-trade agreement, a great opportunity for American companies because it eliminates tariffs on our products. If that were true, the agreement would be a few lines long.
Instead, we have a trade agreement that runs nearly 1,000 pages and is chock full of giveaways and protections for drug companies, oil companies, and financial services companies, and incentives to outsource jobs now held by Americans.
Nafta. The Central American Free Trade Agreement. China. Now Colombia. We have a pattern in our trade policy that aims to protect special interests, but betray our workers, our environment, our communities.
Let's stop accusing one another of being protectionists. And let us agree that U.S. trade policy – writing the rules of globalization to protect our national interests and our communities – is worthy of a vigorous national debate.
Readers of this blog know that I've made this repeated argument--that we should debate trade and the rules being set up, not dumb marketing phrases like "free trade". Good for Sherrod for pushing this point.
Democratic Super Delegates and Trade
John Tusani bring this article to you discussing what the Super Delegates might be thinking. If only it comes out to be true.
I've said before that I believe that the Democratic nomination fight is over, though the hype may drag on for a bit. But, a nice chunk of super delegates--perhaps as many as a dozen or more--may make their choice based on where the candidates stand on trade. And that's a good sign for people who actually care about choices made on the basis of issues.
In early March, I pointed out that Sen. Sherrod Brown and Rep. Marcy Kaptur (both from Ohio) were remaining undecided because they wanted to actually get a very clear understanding of where the candidates stood on trade, particularly on the fate of the so-called "free trade" agreement with Colombia. Congressional Quarterly reported earlier this week that:
According to one list, there are 21 House Democrats in the group of lawmakers that wants to force the candidates to take detailed stands on a series of trade issues such as how they would renegotiate the North American Free Trade Agreement, whether they would address trade disparities the lawmakers attribute to the use of value-added taxes in foreign countries, how they would use the tax code to encourage American businesses to keep facilities in the United States, and what steps they would take to create jobs by investing in domestic infrastructure needs.
The group still includes at least 12 undecided lawmakers: Kaptur, Reps Michael H. Michaud of Maine, Bart Stupak of Michigan (who will only be a superdelegate if the Democratic Party seats a delegation from his home state), Joe Donnelly and Peter J. Visclosky of Indiana, Peter A. DeFazio of Oregon, Jason Altmire and Christopher Carney of Pennsylvania, John Sarbanes of Maryland, Ciro D. Rodriguez of Texas, Gene Taylor of Mississippi and Heath Shuler of North Carolina.
Of particular interest is Heath Shuler, not simply because of the upcoming primary in North Carolina. In the 2006 midterm elections, Shuler won in the 11th congressional district by beating incumbent Charles Taylor, in no small part because of Taylor's failure to vote against the so-called "free trade" Central American Free Trade Agreement. Shuler ran two television ads on trade policy during his campaign.
In Indiana, in 2006, Joe Donnelly defeated incumbent Chris Chocola, who supported so-called "free trade" deals like NAFTA, and Brad Ellsworth won his seat in the 8th Congressional district by campaigning against expansions of so-called "free trade".
All this is good news. One of the things that we can take from this election cycle is that we are winning the campaign to move to a much more saner discussion and policy on trade and globalization. It's clear that the Democratic Party candidates, from the outset, have understood that the voters are much more advanced in their grasp of the damage being done by so-called "free trade" (whether the candidates have truly changed their position or not is a different issue). If you want to judge by the results in 2006, expanding majorities in Congress, in the House and the Senate, will be easier if the Democratic Party's candidates reject so-called "free trade" and pledge to embrace a sane approach to globalization and trade--not just because of the moral imperative but as a matter of electoral realities since even Republicans are opposed to so-called "free trade".
So, while I find the machinations and hype over the the race-that-is-over pretty boring, there is a lot of hope to be found in the bubbling up of voter sentiment reflected in the dynamics of the political insider game.
I've said before that I believe that the Democratic nomination fight is over, though the hype may drag on for a bit. But, a nice chunk of super delegates--perhaps as many as a dozen or more--may make their choice based on where the candidates stand on trade. And that's a good sign for people who actually care about choices made on the basis of issues.
In early March, I pointed out that Sen. Sherrod Brown and Rep. Marcy Kaptur (both from Ohio) were remaining undecided because they wanted to actually get a very clear understanding of where the candidates stood on trade, particularly on the fate of the so-called "free trade" agreement with Colombia. Congressional Quarterly reported earlier this week that:
According to one list, there are 21 House Democrats in the group of lawmakers that wants to force the candidates to take detailed stands on a series of trade issues such as how they would renegotiate the North American Free Trade Agreement, whether they would address trade disparities the lawmakers attribute to the use of value-added taxes in foreign countries, how they would use the tax code to encourage American businesses to keep facilities in the United States, and what steps they would take to create jobs by investing in domestic infrastructure needs.
The group still includes at least 12 undecided lawmakers: Kaptur, Reps Michael H. Michaud of Maine, Bart Stupak of Michigan (who will only be a superdelegate if the Democratic Party seats a delegation from his home state), Joe Donnelly and Peter J. Visclosky of Indiana, Peter A. DeFazio of Oregon, Jason Altmire and Christopher Carney of Pennsylvania, John Sarbanes of Maryland, Ciro D. Rodriguez of Texas, Gene Taylor of Mississippi and Heath Shuler of North Carolina.
Of particular interest is Heath Shuler, not simply because of the upcoming primary in North Carolina. In the 2006 midterm elections, Shuler won in the 11th congressional district by beating incumbent Charles Taylor, in no small part because of Taylor's failure to vote against the so-called "free trade" Central American Free Trade Agreement. Shuler ran two television ads on trade policy during his campaign.
In Indiana, in 2006, Joe Donnelly defeated incumbent Chris Chocola, who supported so-called "free trade" deals like NAFTA, and Brad Ellsworth won his seat in the 8th Congressional district by campaigning against expansions of so-called "free trade".
All this is good news. One of the things that we can take from this election cycle is that we are winning the campaign to move to a much more saner discussion and policy on trade and globalization. It's clear that the Democratic Party candidates, from the outset, have understood that the voters are much more advanced in their grasp of the damage being done by so-called "free trade" (whether the candidates have truly changed their position or not is a different issue). If you want to judge by the results in 2006, expanding majorities in Congress, in the House and the Senate, will be easier if the Democratic Party's candidates reject so-called "free trade" and pledge to embrace a sane approach to globalization and trade--not just because of the moral imperative but as a matter of electoral realities since even Republicans are opposed to so-called "free trade".
So, while I find the machinations and hype over the the race-that-is-over pretty boring, there is a lot of hope to be found in the bubbling up of voter sentiment reflected in the dynamics of the political insider game.
Teamsters might be "Free At Last"
This is from John Tusani of Work Life. It is interesting but explains a little on why Obama got the Teamster endorsement.
The Wall Street Journal has this interesting story today:
Sen. Barack Obama won the endorsement of the Teamsters earlier this year after privately telling the union he supported ending the strict federal oversight imposed to root out corruption, according to officials from the union and the Obama campaign.
And...
Neither Sen. Obama nor Teamsters President James P. Hoffa has spoken publicly about easing up federal oversight, a top priority for Mr. Hoffa since he became union president in 1999. On the campaign trail, Mr. Hoffa stresses Sen. Obama's criticism of the North American Free Trade Agreement as the big factor in winning the 1.4-million member union's support.
But John Coli, vice president for the Teamsters central region, who brokered the Teamsters endorsement, said Sen. Obama was "pretty definitive that the time had come to start the beginning of the end" of the three-member independent review board that investigates suspect activity in the union. Mr. Coli said that Sen. Obama conveyed that view in a series of phone conversations and meetings with Teamsters officials last year.
Obama spokesman Tommy Vietor confirmed the candidate's position in a statement to The Wall Street Journal, saying that Sen. Obama believes that the board "has run its course," because "organized crime influence in the union has drastically declined." Mr. Vietor said Sen. Obama took that position last year.
The promise to end the government oversight, according to the article, had nothing to do with the Teamsters' endorsement of Obama:...split...
Bret Caldwell, a Teamsters spokesman, said the union's endorsement was "predicated in no way, shape or form" on the consent decree. Mr. Caldwell said that only a court can do away with the oversight, not the president. "The only way that this is going to be resolved is through the court system, there can't be a political solution," he said.
But Mr. Caldwell said the president could appoint people to the Justice Department and courts who also favored ending the consent decree.
"It certainly wouldn't hurt to have a president who came out and said that they would support getting the oversight out of our union," Mr. Caldwell said.
The oversight of the Teamsters dates back to 1989 when the union's leadership agreed to the deal:
The consent decree required the direct election of the union president and other officers by rank and file members, in an election overseen by a court-appointed election officer. (Before, the president was elected by delegates.) It also set up a three-member independent review board to investigate corruption within the union. These elements of the decree are in effect today, while others, like oversight of union finances, have ended.
As an aside, it needs to be pointed out that a number of unions conduct their elections via the convention route, not by direct membership election. I've heard the arguments pro and con on convention elections versus direct membership vote and I don't think that either is the panacea of necessarily better than the other.
The real question is: should the oversight end? It costs the Teamsters $6 million per year to keep up with the decrees' demands. On the one hand, some pretty bad people have been booted out of the union and gone to prison; it's hard to argue--and I don't think that even Hoffa would argue--that that would have happened absent outside intervention.
On the other hand, no union should want the government--given the hostility of the government to union power generally--to control how it operates and have access to its records. And this decree creates some pretty onerous and even preposterous situations that, in the real world, civil libertarians would be up in arms over--there are numerous instances of people being suspended from office for pretty minor things and one would even say acts that amount to having had innocent conversations with people they've known for years.
When is the job done?
View article...
The Wall Street Journal has this interesting story today:
Sen. Barack Obama won the endorsement of the Teamsters earlier this year after privately telling the union he supported ending the strict federal oversight imposed to root out corruption, according to officials from the union and the Obama campaign.
And...
Neither Sen. Obama nor Teamsters President James P. Hoffa has spoken publicly about easing up federal oversight, a top priority for Mr. Hoffa since he became union president in 1999. On the campaign trail, Mr. Hoffa stresses Sen. Obama's criticism of the North American Free Trade Agreement as the big factor in winning the 1.4-million member union's support.
But John Coli, vice president for the Teamsters central region, who brokered the Teamsters endorsement, said Sen. Obama was "pretty definitive that the time had come to start the beginning of the end" of the three-member independent review board that investigates suspect activity in the union. Mr. Coli said that Sen. Obama conveyed that view in a series of phone conversations and meetings with Teamsters officials last year.
Obama spokesman Tommy Vietor confirmed the candidate's position in a statement to The Wall Street Journal, saying that Sen. Obama believes that the board "has run its course," because "organized crime influence in the union has drastically declined." Mr. Vietor said Sen. Obama took that position last year.
The promise to end the government oversight, according to the article, had nothing to do with the Teamsters' endorsement of Obama:...split...
Bret Caldwell, a Teamsters spokesman, said the union's endorsement was "predicated in no way, shape or form" on the consent decree. Mr. Caldwell said that only a court can do away with the oversight, not the president. "The only way that this is going to be resolved is through the court system, there can't be a political solution," he said.
But Mr. Caldwell said the president could appoint people to the Justice Department and courts who also favored ending the consent decree.
"It certainly wouldn't hurt to have a president who came out and said that they would support getting the oversight out of our union," Mr. Caldwell said.
The oversight of the Teamsters dates back to 1989 when the union's leadership agreed to the deal:
The consent decree required the direct election of the union president and other officers by rank and file members, in an election overseen by a court-appointed election officer. (Before, the president was elected by delegates.) It also set up a three-member independent review board to investigate corruption within the union. These elements of the decree are in effect today, while others, like oversight of union finances, have ended.
As an aside, it needs to be pointed out that a number of unions conduct their elections via the convention route, not by direct membership election. I've heard the arguments pro and con on convention elections versus direct membership vote and I don't think that either is the panacea of necessarily better than the other.
The real question is: should the oversight end? It costs the Teamsters $6 million per year to keep up with the decrees' demands. On the one hand, some pretty bad people have been booted out of the union and gone to prison; it's hard to argue--and I don't think that even Hoffa would argue--that that would have happened absent outside intervention.
On the other hand, no union should want the government--given the hostility of the government to union power generally--to control how it operates and have access to its records. And this decree creates some pretty onerous and even preposterous situations that, in the real world, civil libertarians would be up in arms over--there are numerous instances of people being suspended from office for pretty minor things and one would even say acts that amount to having had innocent conversations with people they've known for years.
When is the job done?
View article...
Thursday, April 17, 2008
This is a good comprehensive view of the heal care issue facing those of us who work.
This is the basis of the report. If you use the link below it will give a more detailed report with tables and figures. I hope this proves helpful and the individuals running for office take heed.
April 16, 2008 EPI Briefing Paper #209
A Decade of DeclineThe Erosion of Employer-Provided Health Care in the United States and California, 1995-2006
by Jared Bernstein and Heidi Shierholz
Read news release for California [PDF]Read national news release [PDF]
It is widely recognized that the means through which most working-age Americans receive health care coverage—the employer-based system—is undergoing fundamental change (Gould 2007). Though a majority of workers and their families are still covered through employers, a variety of factors, most prominently increased costs, have led to a steady slide in coverage. This decline has occurred in good economic times and bad, implying a structural, as opposed to cyclical, shift. For example, though the current business cycle has been both highly productive and profitable, the share of workers nationwide with employer-provided health insurance (EPHI) from their own job fell each year, from 51.1% in 2000 to 48.8% in 2006—a decline of 2.3 percentage points. In California, this share declined even further, 2.8 percentage points, from 49.0% in 2000 to 46.2% in 2006.
This report examines what role changes in the composition of employment have played in this decline. To what extent, for example, has this negative trend been driven by the loss of jobs with high rates of coverage? Conversely, what has been the role of diminished coverage rates within existing jobs?
To take a simple example, imagine an economy with two industries, one with very high rates of EPHI and the other with low rates. Next, assume that changes in the nature of demand and production in the global economy lead to job losses in the high-coverage industry and job gains in the low-coverage industry. This change in the composition of jobs would lead to lower overall coverage rates, even if rates of coverage remained the same within both industries. This report will refer to this type of decline in coverage rates as the decline from moving “between” industries. Of course, coverage could also decline within these industries, regardless of each industry’s share of total employment. In this paper, we quantify how much of the decline in health insurance coverage can be attributed to “between” losses—those caused by changes in the composition of employment—and “within” losses—those caused by declining coverage within job sectors.
The above example will likely lead some readers to think about the long-term, ongoing shift from manufacturing to services. While we show that the loss of manufacturing jobs has indeed played the predicted role in the loss of coverage, we find that changes in the likelihood of coverage within jobs have been a much more important determinant of the loss of EPHI coverage, both nationally and in California.
In fact, the statistical analysis in this report suggests that over the last decade, the composition of jobs has had a relatively minor effect on changes in EPHI. Industry shifts have had small negative impacts on coverage both nationally and in California, while occupational shifts have had small positive effects nationally and small negative effects in California. But the big story is taking place within sectors: regardless of which industries or occupations have been adding or losing jobs, changes in EPHI are driven by employer decisions as to whether to provide coverage or not. Similarly, when we look at worker characteristics, we find that, while there have been some “between” gains in worker demographics that have led to higher EPHI (namely, educational upgrading along with the workforce getting older), we also find that there have been significant declines in coverage within categories across the entire age and education spectrum.
The conclusion of this report stresses the policy implications of these findings. The fact that within-sector and within-demographic changes (and not changes in the composition of jobs and workers) are largely driving EPHI trends underscores the need for a national approach to health coverage. Even were we to somehow radically change the composition of jobs toward sectors with higher coverage rates, or change the composition of the workforce through dramatic educational upgrading, the decline in coverage within job sectors and worker demographic categories would still lead to further losses.
This report examines changes in EPHI over the years 1995-2006, both nationally and in California. Though the decline in coverage is a long-term trend, the latter 1990s saw a pause in the trend, as slower growth in the costs of health care provision coincided with very low unemployment.1 In fact, the share of workers covered by EPHI increased nationally from 1995 to 2000, from 49.6% to 51.1%, before resuming its decline in the 2000s. Note that the loss of coverage in the 2000s more than offset the 1995-2000 gains, such that the coverage rate in 2006 was 48.8%, about a point below the 1995 level. California experienced a very similar overall trend, but with bigger declines in the 2000s, putting its coverage rate in 2006 about a point and a half below the 1995 level.
The data for this report come from the March Current Population Survey, a large, nationally representative data series. The discussion of data and coding issues can be found in the Appendix.
The main findings are:
The two time periods examined—1995-2000 and 2000-06—differ significantly with regard to trends in health insurance coverage, with the 2000s much less favorable than the latter 1990s. We attribute this difference to both a temporary respite from fast price increases in EPHI in the late 1990s and the uniquely tight job market that prevailed over that period.
The composition of jobs between industries and occupations has had a relatively minor effect on changes in EPHI. Industry shifts away from manufacturing have had a small negative impact, and occupation shifts toward white-collar work have had a small positive effect.
The decline in coverage within jobs is the driving force behind the overall declines in coverage. The recent declines in health insurance coverage are even more dramatic when considering only workers who have demonstrated a strong attachment to the labor force (e.g., excluding part-time or part-year workers).
Changes in the age and education composition of the workforce have led to increased EPHI, but there have been declines in coverage within categories across the entire age and education spectrum.
In 2006, the rate of EPHI was 2.9 percentage points lower in California than in the rest of the country. The general trends in coverage in California, however, are very similar to the national level, including the dominance of within job sector changes.
The one exception to this similarity concerns California workers who are more attached to the labor force. Attached California workers are somewhat more negatively impacted by industry and occupational shifts than by declines within jobs, with the driving force being the loss of manufacturing jobs, which was more pronounced in California than at the national level.
The structure of employment and coverage, 1995-2006
We begin by examining employment and coverage shares by industry, occupation, and worker characteristics. Each reveals different aspects of the decline in EPHI. The composition of jobs by industry tends to be influenced by the interaction of product demand and globalization. As consumers and investors demand certain types of goods and services over others, employment shifts to those industries experiencing higher relative demand. Also, if such demands are met by foreign producers (or domestic firms that produce abroad), that too will change the industry composition of employment in the United States.
Occupational employment is more reflective of shifts in how goods and services are produced Thus, changes in employment shares by occupation reflect changes like those in technology and the organization of work. Finally, changes in worker characteristics reflect changing national demographics, along with changes in employer demand for workers at different skill levels.
Industry
Table 1 shows the industry shares of employment and coverage in 1995, 2000, and 2006. The top panel, employment shares, reveals large shares in professional services (which includes health services) and retail trade; in 2006, these two industries account for almost half of employment. Both construction and professional services expanded faster than average over this 11-year period, thus growing as a share of total employment. Manufacturing employment fell most quickly over these years—dropping by almost 4 percentage points, a large shift over this time frame.
The bottom panel, coverage rates, shows quite different trends in the two time periods. The temporary decline in the pace of the cost of health coverage made a big difference in the 1990s, as most industries posted increased coverage rates in 2000 compared to 1995. The tight job market that prevailed over those years was also a contributing factor, as employers needed to bid up compensation packages to get and keep needed employees. The so-called “office economy”—business and professional services—experienced significant gains in coverage. Even lower wage personal services, jobs that provide services to individuals, like housekeepers and beauticians, saw increased coverage over these years. Among factory workers, coverage results were mixed, with a slight loss to durable goods workers and gains for those manufacturing non-durables.
Coverage trends in the latter period were, however, much more negative. They were almost uniformly negative, with the exception of few small sectors, like agriculture and entertainment. In some industries, the trend reversal was quite sharp: construction reversed almost all of its latter 1990s gains, and transportation et al. went from a stagnant trend in coverage to an alarmingly large loss of over 8 percentage points.
Occupation
Table 2 is structured the same way as the previous table, but through the lens of occupations. In a continuation of a long-term trend, white-collar jobs have generally increased their shares, especially among managers and professionals, while sales workers have remained relatively flat. The share of blue-collar workers in precision production, craft, and repair, which includes carpenters and workers in the construction trade, has not declined, in large part because of the boom in construction over these years. But manufacturing job losses show up in the next line, with a declining share of machine operators and assemblers. Administrative and clerical workers also comprise a smaller share of the economy, presumably displaced by technological changes in computer usage in the workplace.
As with the bottom panel of Table 1, in the bottom panel of Table 2 we see the same tale of two very different periods in coverage rate trends. Losses were pervasive in the 2000s. Blue-collar workers saw all the modest coverage gains they made in the late 1990s more than eroded in the 2000s. But notably, white-collar workers, including executives, managers, and technical workers, also saw large declines in coverage in this period. Note, for example, declines of about 3 to 6 percentage points from 2000 to 2006, among the first three occupations listed in the table. These losses in EPHI coverage in high-quality jobs provide an important reminder that occupational upgrading—the shift to jobs higher up the occupational ladder—by itself will not ensure higher rates of EPHI. No one is immune to the slow unraveling of the employer-based system.
Worker characteristics
The first row of the top panel of Table 3 shows that the average age of U.S. workers increased 2.3 years over the 1995 to 2006 period, from 38.5 years in 1995 to 40.7 years in 2006. There was also significant educational upgrading over this period, with a 6 percentage-point drop in the share of workers with a maximum education level of a high school diploma or less, and a 5.1 percentage-point increase in the share of workers with a college degree or higher. The share of women in the workforce increased slightly in the last half of the 1990s, but declined slightly in the 2000s to remain unchanged from 1995 to 2006 at 46.8%. The share of immigrants increased 4.8 percentage points, from 10.4% in 1995 to 15.3% in 2005.
The bottom panel of Table 3 shows health care coverage by demographic groups. We see the familiar pattern, where virtually all groups made gains in the late 1990s but saw those gains more than eroded in the 2000s. Looking over the full 1995-2006 period, the breakdown by age category shows an unsurprising increase in EPHI over the life cycle,2 and a similarly unsurprising increase in EPHI going up the educational ladder.
The more interesting finding is what happens within these age and education categories over time. For the period from 1995 to 2006, the most dramatic declines in EPHI are occurring for prime-age workers—workers age 25-54—who experienced average declines in EPHI of 2.3 percentage points. Furthermore, workers across the entire educational spectrum saw declines in coverage, for example workers with a college degree or more saw a 2.0 percentage-point decline from 1995 to 2006, while workers without a college degree saw a 1.9 percentage-point decline over this period. Men also saw a decline of 2.2 percentage points from 1995 to 2006, while women experienced a slight increase of 0.7 percentage points. Immigrant workers were hit especially hard, experiencing a decline of 2.9 percentage points from 1995 to 2006, while non-immigrant workers held steady over this period.3
In sum, while changes in certain characteristics, like higher mean ages and educational upgrading, should have (and did, as shown below) led to higher levels of EPHI, trends within all groups went the other way.
These descriptive tables reveal two main points, both of which are explored in greater detail in the next section. First, the two time periods differ significantly with regard to health insurance coverage, with the 2000s much less favorable than the latter 1990s, a difference we attribute to both a temporary respite from fast price increases in EPHI and the uniquely tight job market of the 1990s. Second, over these time periods, there was a great deal of movement in health insurance coverage within industries, occupations, and demographic categories (as shown in the bottom panels of Tables 1-3). There was some movement in the distribution of workers over demographic characteristics (as shown in the top panel of Table 3), and there was relatively less movement in the distribution of jobs by industries and occupations (as shown in the top panels of Tables 1 and 2). This suggests that the big story in eroding EPHI over this period is not about the changing composition of jobs by industry or occupation Instead, we find that changes in the likelihood of coverage within sectors are much more important in explaining the changes in overall coverage rates.
The next section uses a common regression-based decomposition to quantify this reasoning. First, however, we note that Tables A1-A3 in the Appendix provide the same information given in Tables 1-3, but for a subset of workers more closely attached to the labor market, defined by being a private-sector worker between the ages of 18 and 64 who works at least half the year and at least 20 hours per week. These more attached workers comprise about two-thirds of the total workforce over this period and have higher EPHI coverage rates (by about 20 percentage points) than their less-attached colleagues have. The overall trends for the more attached workers are the same as for all workers, both in terms of employment and coverage shares, but the gains in coverage in the 1990s were smaller for the more attached workers and the losses in the 2000s were considerably larger. Overall, EPHI fell 3.5 percentage points for this group of workers (as opposed to 1 percentage point for all workers). This difference implies that the recent decline in EPHI coverage comes not from employers reducing coverage for their most marginally attached workers, but instead it is workers with a demonstrated commitment to the labor force who are feeling the squeeze.
A closer look at the determinants of EPHI coverage rates
This section uses a common decomposition technique to answer the question posed above: which is a more important determinant of changes in EPHI, the shifts occurring in the structure of employment by industry and occupation, or the changes in coverage within jobs? The method is discussed in greater detail in the appendix; here we note that it enables us to control for a wide set of factors, both individual and sectoral, in accounting for the observed changes in coverage.
The first row of Table 4 gives the changes in EPHI, as shown in the bottom rows of Tables 1-3. As discussed above, these overall changes can be decomposed into two parts—the part explained by changes in the likelihood of coverage within worker or job characteristics (row 2) and the part explained by compositional shifts between worker or job characteristics (row 3).4
The technique also allows the “between” part to be further decomposed. Here we decompose it into three subparts—the part explained by compositional shifts between industries (row 4), the part explained by compositional shifts between occupations (row 5), and the part explained by compositional shifts between worker characteristics, including age, education, gender, race, ethnicity, and immigrant status (row 6).5
For example, between 1995 and 2000, EPHI coverage increased slightly, by 1.5 percentage points. The decomposition shows us that 0.9 percentage points of the change came from a higher likelihood of coverage, holding worker and job characteristics constant. The rest, 0.6 percentage points, is explained by compositional shifts in worker and job characteristics. Furthermore, of the 0.6 percentage points added by compositional shifts in worker and job characteristics, both worker characteristics (specifically, increases in average age along with educational upgrading) and the shift to higher coverage occupations were driving factors, while industry shifts had a negligible impact.
The 2000s, of course, have been much more negative, with coverage falling 2.4 percentage points. Moreover, this decline is more than explained by diminished likelihood of coverage within jobs; the contribution of compositional shifts between jobs is very small. However, what we do uncover in the further decomposition of the between part is that worker characteristics continued to “improve,” i.e., lead to higher coverage rates, in the 2000s, but that was largely offset by industry shifts that led to reduced coverage.
The final column gives the change over the full 1995-2006 period. The losses in the 2000s more than eroded the gains in the latter 1990s, and coverage ended up falling slightly, by 0.8 percentage points. Here again, the 0.8 percentage-point decline is much more than explained by a diminished likelihood of coverage within jobs, but here the positive contribution of compositional shifts between job and worker characteristics is more than negligible. When we further decompose this “between” part, we find that coverage-inducing changes in personal characteristics, namely the growth in the average age and education level of the workforce over this period, added 1.1 percentage points to coverage (e.g., the share of workers in our overall sample with college or more grew from 25% to 30% over these years). There is also a small positive effect on coverage of occupational shifts, but an offsetting negative effect of industrial shifts. The industrial shifts that played the biggest role in the decline of coverage were the loss of manufacturing jobs, which have relatively high levels of EPHI coverage, and the increase in construction jobs, which have relatively low levels of coverage. To be sure, however, the main story over this period is the fact that the decline in coverage within jobs is the driving force behind the overall changes.
Appendix Table A4 provides the same analysis for those workers more closely attached to the job market (see above selection criteria). As noted, for these workers, improvements over the latter 1990s were less impressive than those of all workers, and their losses in the 2000s were steeper. Over the full period, their coverage rates fell by 3.5 percentage points, partly due to downshifting industries (-0.9 percentage points) but mostly due to reduced coverage within industries, occupations, and worker demographic categories (-3.2 percentage points).
As expected, the findings from the decomposition amplify those from the descriptive Tables 1-3. Once the favorable conditions of the 1990s—slower cost growth and tight job markets—disappeared, coverage rates began to drop within most industries, occupations, and demographic categories. The composition of jobs by industry and occupation has been a relatively minor player in these outcomes. Negative industry shifts (toward jobs with lower coverage shares) played some role, especially for attached workers, but these shifts did not account for much of the changes in coverage. Coverage losses in the 2000s have occurred within industries and occupations and for workers across the education and age scale. The loss of EPHI is a pervasive “within-group” phenomenon, not the function of changing job-sector characteristics.
Analysis of California
Approximately 2.9% fewer Californians were covered by EPHI than non-Californians in 2006. However, we see the same basic trends in California that we see at the national level, with a few notable exceptions. As above, this section begins by examining employment and coverage shares by industry, occupation, and worker characteristics.
Industry
Table 5 shows the industry shares of employment and EPHI coverage in California in 1995, 2000, and 2006. As with the national data, the top panel reveals large employment shares in professional services (which includes health services) and retail trade. As we also saw nationally, construction and professional services expanded faster than average in California from 1996-2005, and manufacturing employment fell the most dramatically, almost 5 percentage points. This 5-point decline was an entire point larger than the national decline in manufacturing over this period.
As we saw nationally, the bottom panel of Table 5 reveals quite different trends in EPHI coverage over the two time periods, which bracket periods of very different economic conditions and health care pricing regimes. Most industries saw increased coverage over the latter half of the 1990s. Business and repair services saw a huge increase in coverage, and factory workers—both durable and non-durable goods workers—also experienced a healthy increase.
Coverage trends so far in the 2000s have been much more negative. In California (as nationally), some industries experienced dramatic trend reversals between the two periods. For example, in the 2000s, manufacturing, construction, and transportation reversed all of the gains made in the late 1990s, with transportation experiencing an especially dramatic decline.
Occupation
Table 6 shows the occupational shares of employment and EPHI coverage in California in 1995, 2000, and 2006. As with the national data, the California data show that white-collar jobs have generally increased their shares, especially among managers and professionals, while sales workers have remained relatively flat. The share of workers in precision production, craft, and repair has increased due to the California construction boom. The large decline in machine operators and assemblers reflects the losses in California manufacturing jobs. Finally, as at the national level, administrative and clerical workers also comprise a smaller share of the California economy.
The bottom panel of Table 6 underscores the now-familiar story of two time periods with very different economic conditions and coverage rate trends. As we saw with the national data, losses were pervasive in the 2000s, with major declines for both white-collar workers—particularly executives, managers, and technical workers—and for blue-collar workers, who in California (as at the national level) saw all the modest coverage gains they made in the late 1990s more than erode in the 2000s.
Worker characteristics
The first row of the top panel of Table 7 shows that the average age of California workers increased 1.7 years in the 1995-2006 period, from 38.3 years in 1995 to 40 years in 2006. There was also educational upgrading in California over this period, though somewhat less than what was seen at the national level. California experienced a 1.4 percentage-point drop in the share of workers with a maximum education level of a high school diploma or less, and a 3.9 percentage-point increase in the share of workers with a college degree or higher. The percent of women in the California workforce increased from 43.6% in 1995 to 44.6% in 2006, which was 2.2 percentage points lower than the national level in 2006.
The race/ethnicity/immigration makeup of California is starkly different from the national average. The immigrant share of the workforce in California is more than twice the national average, at 34.8% in California versus 15.3% nationally in 2006. Interestingly, the change in the share of immigrants in the workforce from 1995 to 2006 was the same in California as nationally, an increase of 4.8 percentage points. California has a higher share of non-immigrant Hispanics than the national average (13.7% in California in 2006 versus 6.1% nationally) and it is growing faster (4.0 percentage points from 1995 to 2006 in California versus 1.6 percentage points nationally). Finally, California also has a lower share of non-immigrant, non-Hispanic whites than the national average, and a lower share of non-immigrant, non-Hispanic blacks.
The bottom panel of Table 7 shows health care coverage by demographic groups. Again, there is a familiar pattern, where virtually all groups made gains in the late 1990s but saw those gains more than eroded in the 2000s. As with the discussion of the national level data, the discussion here will focus on the changes from 1995 to 2006. The breakdown by age category shows an unsurprising increase in EPHI over the life cycle,6 and a similarly unsurprising increase in EPHI going up the educational ladder. But as at the national level, there are declines in coverage within almost all age categories; particularly hard hit in California are workers age 45 and above, who experienced a decline of 3.8 percentage points from 1995 to 2006. Furthermore, workers across the educational spectrum saw declines in coverage. The subset of workers with a college degree or more and the subset of workers without a college degree both experienced a 2.3 percentage-point decline from 1995 to 2006. Men saw a decline of 3.1 percentage points from 1995 to 2006, while women experienced a slight increase of 0.8 percentage points. Immigrants and non-immigrants alike experienced declines—immigrant California workers experienced a decline of 0.9 percentage points (much smaller than the national-level decline of 2.9 percentage points), while non-immigrant California workers saw a decline of 0.8 percentage points over this period. Non-immigrant Hispanics were hit especially hard in California, experiencing a decline of 2.7 percentage points from 1995 to 2006 (at the national level, non-immigrant Hispanics actually saw a slight increase in coverage of 0.5 percentage points).
Tables A5-A7 in the Appendix provide the same information given in Tables 5-7, but for the subset of more attached California workers. The overall trends for more attached workers are the same as for all California workers, both in terms of employment and coverage shares, though the gains in coverage in the 1990s and the declines in coverage in the 2000s were somewhat smaller for the more-attached workers. Overall, EPHI fell 2 percentage points for the more-attached workers (as opposed to 1.4 percentage point for all California workers). Thus, in California unlike at the national level, we find more- and less-attached workers facing similar declines in EPHI.
Decomposition
Table 8 presents the decomposition for California in the same form given in Table 4 with national data. Between 1995 and 2000 in California, EPHI coverage increased slightly, by 1.4 percentage points. This was due entirely to increased coverage within worker and job characteristics. In fact, compositional shifts between industries, occupations, and worker characteristics each contributed negatively to the overall trend.
Between 2000 and 2006 in California, coverage fell 2.9 percentage points. Again, this came almost entirely from a lower likelihood of coverage within jobs; the contribution of compositional shifts between jobs is very small. However, what the further decomposition of “between” part reveals is that worker characteristics improved in the 2000s, that is, led to higher coverage rates, but that was largely offset by industry shifts that led to reduced coverage.
The final column gives the change over the full 1995-2006 period. The losses in the 2000s more than eroded the gains in the latter 1990s, and coverage ended up falling by 1.4 percentage points for the period as a whole. Here again, the decline is driven by a diminished likelihood of coverage within jobs, though the contribution of compositional shifts between jobs is relatively large. When we further decompose the “between” part, we find that the coverage-inducing changes in personal characteristics added 0.5 percentage points to coverage. There were three main contributors to this change: age, educational upgrading, and immigration. Increases in average age led to increased coverage, as did educational upgrading. However, these were somewhat offset by increases in immigration, which lead to decreased coverage because immigrants tend to have lower levels of EPHI. Interestingly, despite California’s much higher share of immigrant workers, the relatively small effect of immigration on changes in EPHI from 1995 to 2006 are very similar in California to the national level, since over this period California experienced the same changes in immigrant worker share as the nation did as a whole. In any case, the generally “improved” personal characteristics were more than offset by the negative effect of industrial shifts, which were larger in California (-0.7 percentage points) than at the national level (-0.4 percentage points).
As at the national level, the industrial shifts that played the biggest role in the decline of coverage were the loss of manufacturing jobs, which have relatively high levels of EPHI coverage, and the increase in construction jobs, which have relatively low levels of coverage. But as above, it is important to keep in mind that it is the decline in coverage within jobs that is the driving force behind the overall changes.
Appendix Table A8 provides the same analysis for those California workers more closely attached to the job market. As noted, for these workers improvements over the latter 1990s were less impressive than those of all workers, but their losses in the 2000s were marginally lower. Over the full period, their coverage rates fell by 2 percentage points, which was much less than the national drop for attached workers of 3.5 percentage points. But the interesting thing here is that the pattern is different from what we have seen thus far—a bigger piece of the decline in coverage experienced by more-attached California workers was due to industry and occupational shifts (-1.4 percentage points) than to declines within jobs (-0.7). Not surprisingly, it is the steep reduction in manufacturing jobs in California that is driving this fact.
Conclusion
It is widely recognized that the employer-based health care system is undergoing fundamental change. The number of workers with employer-provided health insurance from their own job has seen a substantial decrease in recent years, even amidst solid economic growth and strong productivity. This paper demonstrates that, while the loss of manufacturing jobs has played the predicted role in the loss of coverage, especially among attached workers and especially in California, the data repeatedly show that changes in the likelihood of coverage within jobs have been a much more prominent determinant of the loss of EPHI coverage. In other words, regardless of which industries or occupations have been adding or losing jobs, changes in EPHI are being driven by employer decisions as to whether to provide coverage or, as is more likely since 2000, not to do so.
Another important finding is that the decline in coverage within jobs is as likely in white-collar occupations, including executives, managers, and workers in professional specialties, as in blue-collar occupations. While these white-collar occupations have relatively high levels of coverage, they saw large declines over this period, demonstrating that even jobs near the top of the occupational ladder are vulnerable to the erosion of the employer-based system. We also find that it is the more-attached workers—those who have demonstrated a strong commitment to the labor market—who are the most likely to have been affected by the recent decline in coverage. Furthermore, we find that while there have been some shifts in worker demographics (namely age and education) that led to higher EPHI, we also find that there have been significant declines in coverage within categories across the entire age and education spectrum, including prime-age workers and those with college degrees. These findings show that health insecurity is now a broadly shared American experience.
As a consequence, the solution requires a broadly shared approach. The erosion of the employer-based system, with losses accumulating in even high-end sectors, along with the critical need to control health care costs, indicates that the provision of coverage needs to be at least partly “taken out of the market.” Universal programs that a) pool risk across large populations, and b) mandate coverage, with subsidies for those unable to meet the mandate are most likely to reverse the erosion documented in this paper. Some policy ideas in this area, like that of Hacker (2007), accomplish these goals while leaving the employer system largely intact. The findings in this briefing paper should point policy makers toward such plans.
—We thank James Lin and Jin Dai for excellent research assistance. We thank the California Endowment for supporting our work.
Endnotes
1. In fact, lower costs and tighter labor markets were probably connected, as suggested by Blinder and Yellen (2001). The main reason for the downshift in the costs of EPHI was the shift from point-of-service plans to lower-cost forms of coverage, such as health maintenance organizations.
2. The lower level for workers age 55 and above is due to partial retirement in this category. Looking at more attached workers, we find increasing coverage over the entire career (See Appendix Table A3).
3. What is underlying the holding-steady of non-immigrant workers is the fact that less-attached—e.g., part-time or part-year—non-immigrant workers saw a substantial increase of 2.6 percentage points over this period, almost all of it in the late 1990s, while more-attached non-immigrant workers experienced a decline of 2.1 percentage points from 1995 to 2006 (see Appendix Table A3).
4. Note that rows 2 and 3 sum up to row 1 (any discrepancies are due to rounding).
5. Note that rows 4-6 sum up to row 3 (again, any discrepancies are due to rounding).
6. As at the national level, the lower level for California workers age 55 and above is due to partial retirement in this category. Looking at more attached California workers, we find increasing coverage over the entire career (see Appendix Table A7).
References
Blinder, Alan S., and Janet L.Yellen. 2001. The Fabulous Decade: Macroeconomic Lessons From the 1990s. New York: The Century Foundation Press.
Gould, Elise. 2007. The Erosion of Employment-Based Insurance: More Working Families Left Uninsured. Economic Policy Institute Briefing Paper #203. Washington, D.C.: EPI.
Hacker, Jacob S. 2007. Health Care for America: A Proposal for Guaranteed, Affordable Health Care for All Americans Building on Medicare and Employment-Based Insurance. Economic Policy Institute Briefing Paper #180. Washington, D.C.: EPI.
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April 16, 2008 EPI Briefing Paper #209
A Decade of DeclineThe Erosion of Employer-Provided Health Care in the United States and California, 1995-2006
by Jared Bernstein and Heidi Shierholz
Read news release for California [PDF]Read national news release [PDF]
It is widely recognized that the means through which most working-age Americans receive health care coverage—the employer-based system—is undergoing fundamental change (Gould 2007). Though a majority of workers and their families are still covered through employers, a variety of factors, most prominently increased costs, have led to a steady slide in coverage. This decline has occurred in good economic times and bad, implying a structural, as opposed to cyclical, shift. For example, though the current business cycle has been both highly productive and profitable, the share of workers nationwide with employer-provided health insurance (EPHI) from their own job fell each year, from 51.1% in 2000 to 48.8% in 2006—a decline of 2.3 percentage points. In California, this share declined even further, 2.8 percentage points, from 49.0% in 2000 to 46.2% in 2006.
This report examines what role changes in the composition of employment have played in this decline. To what extent, for example, has this negative trend been driven by the loss of jobs with high rates of coverage? Conversely, what has been the role of diminished coverage rates within existing jobs?
To take a simple example, imagine an economy with two industries, one with very high rates of EPHI and the other with low rates. Next, assume that changes in the nature of demand and production in the global economy lead to job losses in the high-coverage industry and job gains in the low-coverage industry. This change in the composition of jobs would lead to lower overall coverage rates, even if rates of coverage remained the same within both industries. This report will refer to this type of decline in coverage rates as the decline from moving “between” industries. Of course, coverage could also decline within these industries, regardless of each industry’s share of total employment. In this paper, we quantify how much of the decline in health insurance coverage can be attributed to “between” losses—those caused by changes in the composition of employment—and “within” losses—those caused by declining coverage within job sectors.
The above example will likely lead some readers to think about the long-term, ongoing shift from manufacturing to services. While we show that the loss of manufacturing jobs has indeed played the predicted role in the loss of coverage, we find that changes in the likelihood of coverage within jobs have been a much more important determinant of the loss of EPHI coverage, both nationally and in California.
In fact, the statistical analysis in this report suggests that over the last decade, the composition of jobs has had a relatively minor effect on changes in EPHI. Industry shifts have had small negative impacts on coverage both nationally and in California, while occupational shifts have had small positive effects nationally and small negative effects in California. But the big story is taking place within sectors: regardless of which industries or occupations have been adding or losing jobs, changes in EPHI are driven by employer decisions as to whether to provide coverage or not. Similarly, when we look at worker characteristics, we find that, while there have been some “between” gains in worker demographics that have led to higher EPHI (namely, educational upgrading along with the workforce getting older), we also find that there have been significant declines in coverage within categories across the entire age and education spectrum.
The conclusion of this report stresses the policy implications of these findings. The fact that within-sector and within-demographic changes (and not changes in the composition of jobs and workers) are largely driving EPHI trends underscores the need for a national approach to health coverage. Even were we to somehow radically change the composition of jobs toward sectors with higher coverage rates, or change the composition of the workforce through dramatic educational upgrading, the decline in coverage within job sectors and worker demographic categories would still lead to further losses.
This report examines changes in EPHI over the years 1995-2006, both nationally and in California. Though the decline in coverage is a long-term trend, the latter 1990s saw a pause in the trend, as slower growth in the costs of health care provision coincided with very low unemployment.1 In fact, the share of workers covered by EPHI increased nationally from 1995 to 2000, from 49.6% to 51.1%, before resuming its decline in the 2000s. Note that the loss of coverage in the 2000s more than offset the 1995-2000 gains, such that the coverage rate in 2006 was 48.8%, about a point below the 1995 level. California experienced a very similar overall trend, but with bigger declines in the 2000s, putting its coverage rate in 2006 about a point and a half below the 1995 level.
The data for this report come from the March Current Population Survey, a large, nationally representative data series. The discussion of data and coding issues can be found in the Appendix.
The main findings are:
The two time periods examined—1995-2000 and 2000-06—differ significantly with regard to trends in health insurance coverage, with the 2000s much less favorable than the latter 1990s. We attribute this difference to both a temporary respite from fast price increases in EPHI in the late 1990s and the uniquely tight job market that prevailed over that period.
The composition of jobs between industries and occupations has had a relatively minor effect on changes in EPHI. Industry shifts away from manufacturing have had a small negative impact, and occupation shifts toward white-collar work have had a small positive effect.
The decline in coverage within jobs is the driving force behind the overall declines in coverage. The recent declines in health insurance coverage are even more dramatic when considering only workers who have demonstrated a strong attachment to the labor force (e.g., excluding part-time or part-year workers).
Changes in the age and education composition of the workforce have led to increased EPHI, but there have been declines in coverage within categories across the entire age and education spectrum.
In 2006, the rate of EPHI was 2.9 percentage points lower in California than in the rest of the country. The general trends in coverage in California, however, are very similar to the national level, including the dominance of within job sector changes.
The one exception to this similarity concerns California workers who are more attached to the labor force. Attached California workers are somewhat more negatively impacted by industry and occupational shifts than by declines within jobs, with the driving force being the loss of manufacturing jobs, which was more pronounced in California than at the national level.
The structure of employment and coverage, 1995-2006
We begin by examining employment and coverage shares by industry, occupation, and worker characteristics. Each reveals different aspects of the decline in EPHI. The composition of jobs by industry tends to be influenced by the interaction of product demand and globalization. As consumers and investors demand certain types of goods and services over others, employment shifts to those industries experiencing higher relative demand. Also, if such demands are met by foreign producers (or domestic firms that produce abroad), that too will change the industry composition of employment in the United States.
Occupational employment is more reflective of shifts in how goods and services are produced Thus, changes in employment shares by occupation reflect changes like those in technology and the organization of work. Finally, changes in worker characteristics reflect changing national demographics, along with changes in employer demand for workers at different skill levels.
Industry
Table 1 shows the industry shares of employment and coverage in 1995, 2000, and 2006. The top panel, employment shares, reveals large shares in professional services (which includes health services) and retail trade; in 2006, these two industries account for almost half of employment. Both construction and professional services expanded faster than average over this 11-year period, thus growing as a share of total employment. Manufacturing employment fell most quickly over these years—dropping by almost 4 percentage points, a large shift over this time frame.
The bottom panel, coverage rates, shows quite different trends in the two time periods. The temporary decline in the pace of the cost of health coverage made a big difference in the 1990s, as most industries posted increased coverage rates in 2000 compared to 1995. The tight job market that prevailed over those years was also a contributing factor, as employers needed to bid up compensation packages to get and keep needed employees. The so-called “office economy”—business and professional services—experienced significant gains in coverage. Even lower wage personal services, jobs that provide services to individuals, like housekeepers and beauticians, saw increased coverage over these years. Among factory workers, coverage results were mixed, with a slight loss to durable goods workers and gains for those manufacturing non-durables.
Coverage trends in the latter period were, however, much more negative. They were almost uniformly negative, with the exception of few small sectors, like agriculture and entertainment. In some industries, the trend reversal was quite sharp: construction reversed almost all of its latter 1990s gains, and transportation et al. went from a stagnant trend in coverage to an alarmingly large loss of over 8 percentage points.
Occupation
Table 2 is structured the same way as the previous table, but through the lens of occupations. In a continuation of a long-term trend, white-collar jobs have generally increased their shares, especially among managers and professionals, while sales workers have remained relatively flat. The share of blue-collar workers in precision production, craft, and repair, which includes carpenters and workers in the construction trade, has not declined, in large part because of the boom in construction over these years. But manufacturing job losses show up in the next line, with a declining share of machine operators and assemblers. Administrative and clerical workers also comprise a smaller share of the economy, presumably displaced by technological changes in computer usage in the workplace.
As with the bottom panel of Table 1, in the bottom panel of Table 2 we see the same tale of two very different periods in coverage rate trends. Losses were pervasive in the 2000s. Blue-collar workers saw all the modest coverage gains they made in the late 1990s more than eroded in the 2000s. But notably, white-collar workers, including executives, managers, and technical workers, also saw large declines in coverage in this period. Note, for example, declines of about 3 to 6 percentage points from 2000 to 2006, among the first three occupations listed in the table. These losses in EPHI coverage in high-quality jobs provide an important reminder that occupational upgrading—the shift to jobs higher up the occupational ladder—by itself will not ensure higher rates of EPHI. No one is immune to the slow unraveling of the employer-based system.
Worker characteristics
The first row of the top panel of Table 3 shows that the average age of U.S. workers increased 2.3 years over the 1995 to 2006 period, from 38.5 years in 1995 to 40.7 years in 2006. There was also significant educational upgrading over this period, with a 6 percentage-point drop in the share of workers with a maximum education level of a high school diploma or less, and a 5.1 percentage-point increase in the share of workers with a college degree or higher. The share of women in the workforce increased slightly in the last half of the 1990s, but declined slightly in the 2000s to remain unchanged from 1995 to 2006 at 46.8%. The share of immigrants increased 4.8 percentage points, from 10.4% in 1995 to 15.3% in 2005.
The bottom panel of Table 3 shows health care coverage by demographic groups. We see the familiar pattern, where virtually all groups made gains in the late 1990s but saw those gains more than eroded in the 2000s. Looking over the full 1995-2006 period, the breakdown by age category shows an unsurprising increase in EPHI over the life cycle,2 and a similarly unsurprising increase in EPHI going up the educational ladder.
The more interesting finding is what happens within these age and education categories over time. For the period from 1995 to 2006, the most dramatic declines in EPHI are occurring for prime-age workers—workers age 25-54—who experienced average declines in EPHI of 2.3 percentage points. Furthermore, workers across the entire educational spectrum saw declines in coverage, for example workers with a college degree or more saw a 2.0 percentage-point decline from 1995 to 2006, while workers without a college degree saw a 1.9 percentage-point decline over this period. Men also saw a decline of 2.2 percentage points from 1995 to 2006, while women experienced a slight increase of 0.7 percentage points. Immigrant workers were hit especially hard, experiencing a decline of 2.9 percentage points from 1995 to 2006, while non-immigrant workers held steady over this period.3
In sum, while changes in certain characteristics, like higher mean ages and educational upgrading, should have (and did, as shown below) led to higher levels of EPHI, trends within all groups went the other way.
These descriptive tables reveal two main points, both of which are explored in greater detail in the next section. First, the two time periods differ significantly with regard to health insurance coverage, with the 2000s much less favorable than the latter 1990s, a difference we attribute to both a temporary respite from fast price increases in EPHI and the uniquely tight job market of the 1990s. Second, over these time periods, there was a great deal of movement in health insurance coverage within industries, occupations, and demographic categories (as shown in the bottom panels of Tables 1-3). There was some movement in the distribution of workers over demographic characteristics (as shown in the top panel of Table 3), and there was relatively less movement in the distribution of jobs by industries and occupations (as shown in the top panels of Tables 1 and 2). This suggests that the big story in eroding EPHI over this period is not about the changing composition of jobs by industry or occupation Instead, we find that changes in the likelihood of coverage within sectors are much more important in explaining the changes in overall coverage rates.
The next section uses a common regression-based decomposition to quantify this reasoning. First, however, we note that Tables A1-A3 in the Appendix provide the same information given in Tables 1-3, but for a subset of workers more closely attached to the labor market, defined by being a private-sector worker between the ages of 18 and 64 who works at least half the year and at least 20 hours per week. These more attached workers comprise about two-thirds of the total workforce over this period and have higher EPHI coverage rates (by about 20 percentage points) than their less-attached colleagues have. The overall trends for the more attached workers are the same as for all workers, both in terms of employment and coverage shares, but the gains in coverage in the 1990s were smaller for the more attached workers and the losses in the 2000s were considerably larger. Overall, EPHI fell 3.5 percentage points for this group of workers (as opposed to 1 percentage point for all workers). This difference implies that the recent decline in EPHI coverage comes not from employers reducing coverage for their most marginally attached workers, but instead it is workers with a demonstrated commitment to the labor force who are feeling the squeeze.
A closer look at the determinants of EPHI coverage rates
This section uses a common decomposition technique to answer the question posed above: which is a more important determinant of changes in EPHI, the shifts occurring in the structure of employment by industry and occupation, or the changes in coverage within jobs? The method is discussed in greater detail in the appendix; here we note that it enables us to control for a wide set of factors, both individual and sectoral, in accounting for the observed changes in coverage.
The first row of Table 4 gives the changes in EPHI, as shown in the bottom rows of Tables 1-3. As discussed above, these overall changes can be decomposed into two parts—the part explained by changes in the likelihood of coverage within worker or job characteristics (row 2) and the part explained by compositional shifts between worker or job characteristics (row 3).4
The technique also allows the “between” part to be further decomposed. Here we decompose it into three subparts—the part explained by compositional shifts between industries (row 4), the part explained by compositional shifts between occupations (row 5), and the part explained by compositional shifts between worker characteristics, including age, education, gender, race, ethnicity, and immigrant status (row 6).5
For example, between 1995 and 2000, EPHI coverage increased slightly, by 1.5 percentage points. The decomposition shows us that 0.9 percentage points of the change came from a higher likelihood of coverage, holding worker and job characteristics constant. The rest, 0.6 percentage points, is explained by compositional shifts in worker and job characteristics. Furthermore, of the 0.6 percentage points added by compositional shifts in worker and job characteristics, both worker characteristics (specifically, increases in average age along with educational upgrading) and the shift to higher coverage occupations were driving factors, while industry shifts had a negligible impact.
The 2000s, of course, have been much more negative, with coverage falling 2.4 percentage points. Moreover, this decline is more than explained by diminished likelihood of coverage within jobs; the contribution of compositional shifts between jobs is very small. However, what we do uncover in the further decomposition of the between part is that worker characteristics continued to “improve,” i.e., lead to higher coverage rates, in the 2000s, but that was largely offset by industry shifts that led to reduced coverage.
The final column gives the change over the full 1995-2006 period. The losses in the 2000s more than eroded the gains in the latter 1990s, and coverage ended up falling slightly, by 0.8 percentage points. Here again, the 0.8 percentage-point decline is much more than explained by a diminished likelihood of coverage within jobs, but here the positive contribution of compositional shifts between job and worker characteristics is more than negligible. When we further decompose this “between” part, we find that coverage-inducing changes in personal characteristics, namely the growth in the average age and education level of the workforce over this period, added 1.1 percentage points to coverage (e.g., the share of workers in our overall sample with college or more grew from 25% to 30% over these years). There is also a small positive effect on coverage of occupational shifts, but an offsetting negative effect of industrial shifts. The industrial shifts that played the biggest role in the decline of coverage were the loss of manufacturing jobs, which have relatively high levels of EPHI coverage, and the increase in construction jobs, which have relatively low levels of coverage. To be sure, however, the main story over this period is the fact that the decline in coverage within jobs is the driving force behind the overall changes.
Appendix Table A4 provides the same analysis for those workers more closely attached to the job market (see above selection criteria). As noted, for these workers, improvements over the latter 1990s were less impressive than those of all workers, and their losses in the 2000s were steeper. Over the full period, their coverage rates fell by 3.5 percentage points, partly due to downshifting industries (-0.9 percentage points) but mostly due to reduced coverage within industries, occupations, and worker demographic categories (-3.2 percentage points).
As expected, the findings from the decomposition amplify those from the descriptive Tables 1-3. Once the favorable conditions of the 1990s—slower cost growth and tight job markets—disappeared, coverage rates began to drop within most industries, occupations, and demographic categories. The composition of jobs by industry and occupation has been a relatively minor player in these outcomes. Negative industry shifts (toward jobs with lower coverage shares) played some role, especially for attached workers, but these shifts did not account for much of the changes in coverage. Coverage losses in the 2000s have occurred within industries and occupations and for workers across the education and age scale. The loss of EPHI is a pervasive “within-group” phenomenon, not the function of changing job-sector characteristics.
Analysis of California
Approximately 2.9% fewer Californians were covered by EPHI than non-Californians in 2006. However, we see the same basic trends in California that we see at the national level, with a few notable exceptions. As above, this section begins by examining employment and coverage shares by industry, occupation, and worker characteristics.
Industry
Table 5 shows the industry shares of employment and EPHI coverage in California in 1995, 2000, and 2006. As with the national data, the top panel reveals large employment shares in professional services (which includes health services) and retail trade. As we also saw nationally, construction and professional services expanded faster than average in California from 1996-2005, and manufacturing employment fell the most dramatically, almost 5 percentage points. This 5-point decline was an entire point larger than the national decline in manufacturing over this period.
As we saw nationally, the bottom panel of Table 5 reveals quite different trends in EPHI coverage over the two time periods, which bracket periods of very different economic conditions and health care pricing regimes. Most industries saw increased coverage over the latter half of the 1990s. Business and repair services saw a huge increase in coverage, and factory workers—both durable and non-durable goods workers—also experienced a healthy increase.
Coverage trends so far in the 2000s have been much more negative. In California (as nationally), some industries experienced dramatic trend reversals between the two periods. For example, in the 2000s, manufacturing, construction, and transportation reversed all of the gains made in the late 1990s, with transportation experiencing an especially dramatic decline.
Occupation
Table 6 shows the occupational shares of employment and EPHI coverage in California in 1995, 2000, and 2006. As with the national data, the California data show that white-collar jobs have generally increased their shares, especially among managers and professionals, while sales workers have remained relatively flat. The share of workers in precision production, craft, and repair has increased due to the California construction boom. The large decline in machine operators and assemblers reflects the losses in California manufacturing jobs. Finally, as at the national level, administrative and clerical workers also comprise a smaller share of the California economy.
The bottom panel of Table 6 underscores the now-familiar story of two time periods with very different economic conditions and coverage rate trends. As we saw with the national data, losses were pervasive in the 2000s, with major declines for both white-collar workers—particularly executives, managers, and technical workers—and for blue-collar workers, who in California (as at the national level) saw all the modest coverage gains they made in the late 1990s more than erode in the 2000s.
Worker characteristics
The first row of the top panel of Table 7 shows that the average age of California workers increased 1.7 years in the 1995-2006 period, from 38.3 years in 1995 to 40 years in 2006. There was also educational upgrading in California over this period, though somewhat less than what was seen at the national level. California experienced a 1.4 percentage-point drop in the share of workers with a maximum education level of a high school diploma or less, and a 3.9 percentage-point increase in the share of workers with a college degree or higher. The percent of women in the California workforce increased from 43.6% in 1995 to 44.6% in 2006, which was 2.2 percentage points lower than the national level in 2006.
The race/ethnicity/immigration makeup of California is starkly different from the national average. The immigrant share of the workforce in California is more than twice the national average, at 34.8% in California versus 15.3% nationally in 2006. Interestingly, the change in the share of immigrants in the workforce from 1995 to 2006 was the same in California as nationally, an increase of 4.8 percentage points. California has a higher share of non-immigrant Hispanics than the national average (13.7% in California in 2006 versus 6.1% nationally) and it is growing faster (4.0 percentage points from 1995 to 2006 in California versus 1.6 percentage points nationally). Finally, California also has a lower share of non-immigrant, non-Hispanic whites than the national average, and a lower share of non-immigrant, non-Hispanic blacks.
The bottom panel of Table 7 shows health care coverage by demographic groups. Again, there is a familiar pattern, where virtually all groups made gains in the late 1990s but saw those gains more than eroded in the 2000s. As with the discussion of the national level data, the discussion here will focus on the changes from 1995 to 2006. The breakdown by age category shows an unsurprising increase in EPHI over the life cycle,6 and a similarly unsurprising increase in EPHI going up the educational ladder. But as at the national level, there are declines in coverage within almost all age categories; particularly hard hit in California are workers age 45 and above, who experienced a decline of 3.8 percentage points from 1995 to 2006. Furthermore, workers across the educational spectrum saw declines in coverage. The subset of workers with a college degree or more and the subset of workers without a college degree both experienced a 2.3 percentage-point decline from 1995 to 2006. Men saw a decline of 3.1 percentage points from 1995 to 2006, while women experienced a slight increase of 0.8 percentage points. Immigrants and non-immigrants alike experienced declines—immigrant California workers experienced a decline of 0.9 percentage points (much smaller than the national-level decline of 2.9 percentage points), while non-immigrant California workers saw a decline of 0.8 percentage points over this period. Non-immigrant Hispanics were hit especially hard in California, experiencing a decline of 2.7 percentage points from 1995 to 2006 (at the national level, non-immigrant Hispanics actually saw a slight increase in coverage of 0.5 percentage points).
Tables A5-A7 in the Appendix provide the same information given in Tables 5-7, but for the subset of more attached California workers. The overall trends for more attached workers are the same as for all California workers, both in terms of employment and coverage shares, though the gains in coverage in the 1990s and the declines in coverage in the 2000s were somewhat smaller for the more-attached workers. Overall, EPHI fell 2 percentage points for the more-attached workers (as opposed to 1.4 percentage point for all California workers). Thus, in California unlike at the national level, we find more- and less-attached workers facing similar declines in EPHI.
Decomposition
Table 8 presents the decomposition for California in the same form given in Table 4 with national data. Between 1995 and 2000 in California, EPHI coverage increased slightly, by 1.4 percentage points. This was due entirely to increased coverage within worker and job characteristics. In fact, compositional shifts between industries, occupations, and worker characteristics each contributed negatively to the overall trend.
Between 2000 and 2006 in California, coverage fell 2.9 percentage points. Again, this came almost entirely from a lower likelihood of coverage within jobs; the contribution of compositional shifts between jobs is very small. However, what the further decomposition of “between” part reveals is that worker characteristics improved in the 2000s, that is, led to higher coverage rates, but that was largely offset by industry shifts that led to reduced coverage.
The final column gives the change over the full 1995-2006 period. The losses in the 2000s more than eroded the gains in the latter 1990s, and coverage ended up falling by 1.4 percentage points for the period as a whole. Here again, the decline is driven by a diminished likelihood of coverage within jobs, though the contribution of compositional shifts between jobs is relatively large. When we further decompose the “between” part, we find that the coverage-inducing changes in personal characteristics added 0.5 percentage points to coverage. There were three main contributors to this change: age, educational upgrading, and immigration. Increases in average age led to increased coverage, as did educational upgrading. However, these were somewhat offset by increases in immigration, which lead to decreased coverage because immigrants tend to have lower levels of EPHI. Interestingly, despite California’s much higher share of immigrant workers, the relatively small effect of immigration on changes in EPHI from 1995 to 2006 are very similar in California to the national level, since over this period California experienced the same changes in immigrant worker share as the nation did as a whole. In any case, the generally “improved” personal characteristics were more than offset by the negative effect of industrial shifts, which were larger in California (-0.7 percentage points) than at the national level (-0.4 percentage points).
As at the national level, the industrial shifts that played the biggest role in the decline of coverage were the loss of manufacturing jobs, which have relatively high levels of EPHI coverage, and the increase in construction jobs, which have relatively low levels of coverage. But as above, it is important to keep in mind that it is the decline in coverage within jobs that is the driving force behind the overall changes.
Appendix Table A8 provides the same analysis for those California workers more closely attached to the job market. As noted, for these workers improvements over the latter 1990s were less impressive than those of all workers, but their losses in the 2000s were marginally lower. Over the full period, their coverage rates fell by 2 percentage points, which was much less than the national drop for attached workers of 3.5 percentage points. But the interesting thing here is that the pattern is different from what we have seen thus far—a bigger piece of the decline in coverage experienced by more-attached California workers was due to industry and occupational shifts (-1.4 percentage points) than to declines within jobs (-0.7). Not surprisingly, it is the steep reduction in manufacturing jobs in California that is driving this fact.
Conclusion
It is widely recognized that the employer-based health care system is undergoing fundamental change. The number of workers with employer-provided health insurance from their own job has seen a substantial decrease in recent years, even amidst solid economic growth and strong productivity. This paper demonstrates that, while the loss of manufacturing jobs has played the predicted role in the loss of coverage, especially among attached workers and especially in California, the data repeatedly show that changes in the likelihood of coverage within jobs have been a much more prominent determinant of the loss of EPHI coverage. In other words, regardless of which industries or occupations have been adding or losing jobs, changes in EPHI are being driven by employer decisions as to whether to provide coverage or, as is more likely since 2000, not to do so.
Another important finding is that the decline in coverage within jobs is as likely in white-collar occupations, including executives, managers, and workers in professional specialties, as in blue-collar occupations. While these white-collar occupations have relatively high levels of coverage, they saw large declines over this period, demonstrating that even jobs near the top of the occupational ladder are vulnerable to the erosion of the employer-based system. We also find that it is the more-attached workers—those who have demonstrated a strong commitment to the labor market—who are the most likely to have been affected by the recent decline in coverage. Furthermore, we find that while there have been some shifts in worker demographics (namely age and education) that led to higher EPHI, we also find that there have been significant declines in coverage within categories across the entire age and education spectrum, including prime-age workers and those with college degrees. These findings show that health insecurity is now a broadly shared American experience.
As a consequence, the solution requires a broadly shared approach. The erosion of the employer-based system, with losses accumulating in even high-end sectors, along with the critical need to control health care costs, indicates that the provision of coverage needs to be at least partly “taken out of the market.” Universal programs that a) pool risk across large populations, and b) mandate coverage, with subsidies for those unable to meet the mandate are most likely to reverse the erosion documented in this paper. Some policy ideas in this area, like that of Hacker (2007), accomplish these goals while leaving the employer system largely intact. The findings in this briefing paper should point policy makers toward such plans.
—We thank James Lin and Jin Dai for excellent research assistance. We thank the California Endowment for supporting our work.
Endnotes
1. In fact, lower costs and tighter labor markets were probably connected, as suggested by Blinder and Yellen (2001). The main reason for the downshift in the costs of EPHI was the shift from point-of-service plans to lower-cost forms of coverage, such as health maintenance organizations.
2. The lower level for workers age 55 and above is due to partial retirement in this category. Looking at more attached workers, we find increasing coverage over the entire career (See Appendix Table A3).
3. What is underlying the holding-steady of non-immigrant workers is the fact that less-attached—e.g., part-time or part-year—non-immigrant workers saw a substantial increase of 2.6 percentage points over this period, almost all of it in the late 1990s, while more-attached non-immigrant workers experienced a decline of 2.1 percentage points from 1995 to 2006 (see Appendix Table A3).
4. Note that rows 2 and 3 sum up to row 1 (any discrepancies are due to rounding).
5. Note that rows 4-6 sum up to row 3 (again, any discrepancies are due to rounding).
6. As at the national level, the lower level for California workers age 55 and above is due to partial retirement in this category. Looking at more attached California workers, we find increasing coverage over the entire career (see Appendix Table A7).
References
Blinder, Alan S., and Janet L.Yellen. 2001. The Fabulous Decade: Macroeconomic Lessons From the 1990s. New York: The Century Foundation Press.
Gould, Elise. 2007. The Erosion of Employment-Based Insurance: More Working Families Left Uninsured. Economic Policy Institute Briefing Paper #203. Washington, D.C.: EPI.
Hacker, Jacob S. 2007. Health Care for America: A Proposal for Guaranteed, Affordable Health Care for All Americans Building on Medicare and Employment-Based Insurance. Economic Policy Institute Briefing Paper #180. Washington, D.C.: EPI.
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Wednesday, April 2, 2008
Clinton or Obama? Who will we pick and at what price
Needless to say it has been a very spirited political cycle and we have yet to see a clear favorite from the Democratic Party in the form of Senator Obama or Senator Clinton. The Republicans have seemed to get back their lock-step way to their convention behind John McCain. While most of Labor knows the lack of a voting record for Labor by Senator McCain we direct our attention to the Democrats. Both of them have amassed a strong voting record for Labor we can see some differences between them. Senator Obama comes from the South Side of Chicago and knows the power of Labor and knows the activist side since he was one for some time. Senator Clinton is from New York and the labor movement has called her their sister in the struggle. From here the difference begins, while Senator Obama has only been in the U.S. Senate a short time he has shown his allegiance to Labor by supporting fair trade, the Employee Free Choice Act and proposing health care reform. He has had Labor friendly people on his campaign and was wildly accepted at the AFL-CIO Debate. Yes, it was in Chicago and yes I was mildly disappointed he "stole the show" from the candidate I supported-John Edwards. Senator Clinton supports Employee Free Choice, fair trade and health care reform yet she has a chief-strategist on her campaign by the name of Mark Penn. For those of you who are not aware Mr. Penn is the CEO of a firm that helps companies in Union Avoidance and public relations. In the event you have never heard of the term Union Avoidance it is the 21st Century term to a term we are fully aware of-Union Busting.
Personally, I have a sincere issue with a person saying they are for Labor 100% yet they hire a political strategist that has made millions on telling companies that Unions are bad and they must get rid of them in order to be profitable. At least that is what I have been told they tell them. However, if that person would to get the nomination of the Democratic Party I would be forced to vote for that person on the hope they would see the error of their ways and fire that Union Busting con-artist.
I may sound a little raw about this but having just come through contract negotiations with a "Union Friendly" company that Penn has worked with but the fact remains the same. You would not have your children watched by a baby sitter that has been convinced of sexually abusing children. So, why should we have a Union Buster in a position of a authority in a campaign of an individual who is asking for and received Union support.
I look forward to any comments but please understand that I am a Democrat because of what they do for Labor. If we stand together we can get the person we want in November and stronger and better next 4 years.
Personally, I have a sincere issue with a person saying they are for Labor 100% yet they hire a political strategist that has made millions on telling companies that Unions are bad and they must get rid of them in order to be profitable. At least that is what I have been told they tell them. However, if that person would to get the nomination of the Democratic Party I would be forced to vote for that person on the hope they would see the error of their ways and fire that Union Busting con-artist.
I may sound a little raw about this but having just come through contract negotiations with a "Union Friendly" company that Penn has worked with but the fact remains the same. You would not have your children watched by a baby sitter that has been convinced of sexually abusing children. So, why should we have a Union Buster in a position of a authority in a campaign of an individual who is asking for and received Union support.
I look forward to any comments but please understand that I am a Democrat because of what they do for Labor. If we stand together we can get the person we want in November and stronger and better next 4 years.
Thursday, March 13, 2008
Obama and Clinton on Trade
This is another article from John Tasani and it highlights the questions and answers on trade by the 2 Democratic Presidential hopefuls.
So, it will be interesting to see how much trade really stays front-and-center once the politicians think it's not something they have to talk about. But, we can still talk about trade on the Monday before tomorrow's primary votes. Though I'm not convinced that Barack Obama will be a big improvement on trade, I think the controversy over what one of his advisors said, or didn't say, to some functionary in the Canadian government is overblown.
Barack Obama's senior economic policy adviser said Sunday that Canadian government officials wrote an inaccurate portrayal of his private discussion on the campaign's trade policy in a memo obtained by The Associated Press.The memo is the first documentation to emerge publicly out of the meeting between the adviser, Austan Goolsbee, and officials with the Canadian consulate in Chicago, but Goolsbee said it misinterprets what he told them. The memo was written by Joseph DeMora, who works for the consulate and attended the meeting.Goolsbee disputed a section that read: "Noting anxiety among many U.S. domestic audiences about the U.S. economic outlook, Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign. He cautioned that this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans."
What's a bit more interesting is what the Wisconsin Fair Trade Coalition just posted on its website: answers by Obama and Hillary Clinton on trade. Here are the things that struck me:...split... They were both asked this question: If elected President, would you seek an elimination of the Fast Track process? Their answers were pretty similar though there was a subtle difference. As a reminder to those less obsessed by trade: "fast track" authority allows a president to negotiate a trade deal and present it to Congress for a "yes" or "no" vote, a process that prohibits members of Congress from submitting amendments to the deal. My humble view is that "fast track" is undemocratic, undermine the legitimate authority of the Congress in matters of the economy and should be eliminated whether the president is a Democrat or Republican. Sen Clinton's response:
I oppose fast track for President Bush because he has failed to enforce our trade agreements and because he negotiates trade deals without particular concern for our workers. As President, I will take a timeout from new trade agreements. My priorities will be to review all of our existing agreements to ensure that they are benefiting our workers, and to craft a trade policy that is genuinely pro-worker, pro-American, and vigorously enforced. Our focus should not be on new trade deals, nor should it be on the fastest away of getting new deals done. It should be on enforcing the existing agreements and designing policies that benefit our workers.
Sen Obama's response:
I will not support extension of the existing Fast Track process that expired. I have not and would not support renewing Trade Promotion Authority for this President. The current Fast Track process does not mandate that agreements include binding labor and environmental protections nor does it give an adequate role to Congress in the selection and design of agreements. I will work with Congressional leaders to ensure that any new TPA authority fix these basic failings and open up the process to the American people for their participation and scrutiny.
Hmmm...I added the bold emphasis in Obama's response. Both the candidates want to preserve presidential power over trade and they believe that "fast track" is just a bad power for a Republican president to have. But, the bolded words in Obama's response seem to acknowledge that there is something inherently unbalanced in the power of "fast track" authority--but it is so lacking in specifics it's hard to know what "adequate role" means in Obama's world view. Will that mean he will only invite Congressional leaders over for lunch at the White House--or will be support returning the democratic power to Congress to help shape the agreements? On the topic of foreign investors rights, there is some interesting things to pick over there. As the Coalition describes the issue:
Existing trade deals like NAFTA and CAFTA give foreign investors greater rights than U.S. residents or businesses. These trade agreements allow foreign businesses to bypass the courts and directly sue the United States in foreign trade tribunals. These pacts empower foreign investors to challenge our U.S. environmental, zoning, health and safety laws before U.N. and World Bank tribunals to demand compensation in taxpayer dollars. Since CAFTA, agreements have extended such foreign investor rights to enforcement for timber, mining, construction and other concession contracts with the U.S. Federal government.
The candidates were asked: Will your administration ensure future trade agreements do not include private investor-state enforcement systems and also ensure that state-state investment rules do not grant foreign investors and overseas companies greater rights than U.S. residents or businesses? And the envelope, please. Sen Obama:
With regards to provisions in several FTAs that give foreign investors the right to sue governments directly in foreign tribunals, I will ensure that this right is strictly limited and will fully exempt any law or regulation written to protect public safety or promote the public interest. And I will never agree to granting foreign investors any rights in the U.S. greater than those of Americans. Our judicial system is strong and gives everyone conducting business in the United States recourse in our courts. The tribunal system was created to ensure that our investors would have access to similar protection abroad. I understand the concerns surrounding this issue, and am committed to working to address them.
Sen Clinton simply answered "Yes." Obama's answer that he would strictly limit such rights is a little bit less than what the coalition is seeking i.e., a ban on those rights-and perhaps his answer is a huge loophole. On the other hand, he is publicly committing to "fully exempt" laws or regulations that promote the "public interest"--though how one defines that is a bit slippery (for example, there would be those who might argue that streamlining the building of nuclear power plants--and, thus, weakening certain environmental and safety regulations--is in "the public interest" because that would create jobs and more non-carbon energy sources). Though Sen. Clinton's answer is a simple one word reply, in theory, her commitment is much more sweeping than Sen Obama's commitment. And, respectfully, I'm certainly glad he understands "the concerns" but working to "address" them is the political blow-off. Anyway, you can read the Coalition's full work on trade or read Sen. Obama's answers or Sen. Clinton's answers.
So, it will be interesting to see how much trade really stays front-and-center once the politicians think it's not something they have to talk about. But, we can still talk about trade on the Monday before tomorrow's primary votes. Though I'm not convinced that Barack Obama will be a big improvement on trade, I think the controversy over what one of his advisors said, or didn't say, to some functionary in the Canadian government is overblown.
Barack Obama's senior economic policy adviser said Sunday that Canadian government officials wrote an inaccurate portrayal of his private discussion on the campaign's trade policy in a memo obtained by The Associated Press.The memo is the first documentation to emerge publicly out of the meeting between the adviser, Austan Goolsbee, and officials with the Canadian consulate in Chicago, but Goolsbee said it misinterprets what he told them. The memo was written by Joseph DeMora, who works for the consulate and attended the meeting.Goolsbee disputed a section that read: "Noting anxiety among many U.S. domestic audiences about the U.S. economic outlook, Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign. He cautioned that this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans."
What's a bit more interesting is what the Wisconsin Fair Trade Coalition just posted on its website: answers by Obama and Hillary Clinton on trade. Here are the things that struck me:...split... They were both asked this question: If elected President, would you seek an elimination of the Fast Track process? Their answers were pretty similar though there was a subtle difference. As a reminder to those less obsessed by trade: "fast track" authority allows a president to negotiate a trade deal and present it to Congress for a "yes" or "no" vote, a process that prohibits members of Congress from submitting amendments to the deal. My humble view is that "fast track" is undemocratic, undermine the legitimate authority of the Congress in matters of the economy and should be eliminated whether the president is a Democrat or Republican. Sen Clinton's response:
I oppose fast track for President Bush because he has failed to enforce our trade agreements and because he negotiates trade deals without particular concern for our workers. As President, I will take a timeout from new trade agreements. My priorities will be to review all of our existing agreements to ensure that they are benefiting our workers, and to craft a trade policy that is genuinely pro-worker, pro-American, and vigorously enforced. Our focus should not be on new trade deals, nor should it be on the fastest away of getting new deals done. It should be on enforcing the existing agreements and designing policies that benefit our workers.
Sen Obama's response:
I will not support extension of the existing Fast Track process that expired. I have not and would not support renewing Trade Promotion Authority for this President. The current Fast Track process does not mandate that agreements include binding labor and environmental protections nor does it give an adequate role to Congress in the selection and design of agreements. I will work with Congressional leaders to ensure that any new TPA authority fix these basic failings and open up the process to the American people for their participation and scrutiny.
Hmmm...I added the bold emphasis in Obama's response. Both the candidates want to preserve presidential power over trade and they believe that "fast track" is just a bad power for a Republican president to have. But, the bolded words in Obama's response seem to acknowledge that there is something inherently unbalanced in the power of "fast track" authority--but it is so lacking in specifics it's hard to know what "adequate role" means in Obama's world view. Will that mean he will only invite Congressional leaders over for lunch at the White House--or will be support returning the democratic power to Congress to help shape the agreements? On the topic of foreign investors rights, there is some interesting things to pick over there. As the Coalition describes the issue:
Existing trade deals like NAFTA and CAFTA give foreign investors greater rights than U.S. residents or businesses. These trade agreements allow foreign businesses to bypass the courts and directly sue the United States in foreign trade tribunals. These pacts empower foreign investors to challenge our U.S. environmental, zoning, health and safety laws before U.N. and World Bank tribunals to demand compensation in taxpayer dollars. Since CAFTA, agreements have extended such foreign investor rights to enforcement for timber, mining, construction and other concession contracts with the U.S. Federal government.
The candidates were asked: Will your administration ensure future trade agreements do not include private investor-state enforcement systems and also ensure that state-state investment rules do not grant foreign investors and overseas companies greater rights than U.S. residents or businesses? And the envelope, please. Sen Obama:
With regards to provisions in several FTAs that give foreign investors the right to sue governments directly in foreign tribunals, I will ensure that this right is strictly limited and will fully exempt any law or regulation written to protect public safety or promote the public interest. And I will never agree to granting foreign investors any rights in the U.S. greater than those of Americans. Our judicial system is strong and gives everyone conducting business in the United States recourse in our courts. The tribunal system was created to ensure that our investors would have access to similar protection abroad. I understand the concerns surrounding this issue, and am committed to working to address them.
Sen Clinton simply answered "Yes." Obama's answer that he would strictly limit such rights is a little bit less than what the coalition is seeking i.e., a ban on those rights-and perhaps his answer is a huge loophole. On the other hand, he is publicly committing to "fully exempt" laws or regulations that promote the "public interest"--though how one defines that is a bit slippery (for example, there would be those who might argue that streamlining the building of nuclear power plants--and, thus, weakening certain environmental and safety regulations--is in "the public interest" because that would create jobs and more non-carbon energy sources). Though Sen. Clinton's answer is a simple one word reply, in theory, her commitment is much more sweeping than Sen Obama's commitment. And, respectfully, I'm certainly glad he understands "the concerns" but working to "address" them is the political blow-off. Anyway, you can read the Coalition's full work on trade or read Sen. Obama's answers or Sen. Clinton's answers.
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