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More U.S. Workers Have Highly Volatile, Unstable Incomes

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The U.S stock market may be at record highs and U.S. unemployment at its lowest level since the Great Recession, but income inequality remains stubbornly high.

Contributing to this inequality is the fact that while more Americans are working than at any time since August 2007, more people are working part time, erratic and unpredictable schedules—without full-time, steady employment. Since 2007, the number of Americans involuntarily working part time has increased by nearly 45 percent. More Americans than before are part of what’s considered the contingent workforce, working on-call or on-demand, and as independent contractors or self-employed freelancers, often with earnings that vary dramatically month to month.

These workers span the socioeconomic spectrum, from low-wage workers in service, retail, hospitality and restaurant jobs—and temps in industry, construction and manufacturing—to highly educated Americans working job-to-job because their professions lack fulltime employment opportunities given the structure of many information age businesses. As Andrew Stettner, Michael Cassidy and George Wentworth point out in their new report, A New Safety Net for an Era of Unstable Earnings, what all these workers have in common are highly volatile, unstable incomes and a lack of access to the traditional U.S. unemployment insurance safety net.

“The programs we have to help people are very biased toward traditional incomes,” says Stettner, senior fellow at The Century Foundation. “Volatility in earnings is a really big problem.”

“Those with the least to lose are most likely to lose it”

Published by The Century Foundation, a progressive, nonpartisan think tank, in collaboration with the National Employment Law Project (NELP), which advocates for policies that expand access to work and labor protections for low-wage workers, the report found that those in the contingent or nontraditional workforce “experience nearly twice as much earnings volatility as standard workers.”

It also found that because of this situation, between 2008 and 2013, three out of five prime earners experienced at least as much as a 50 percent drop in their month-to-month income. Half experienced month-to-month income drops of more than 100 percent.

“This broad issue of underemployment,” says NELP senior counsel George Wentworth, “there’s less of a light on it and these people are not showing up in national unemployment figures. But these workers are struggling and many of them are not making ends meet.”

Central to this problem is that most workers now employed part time are making less than what they made previously, working full time. At the same time, their part-time or independent contractor status means they are likely not eligible for a full complement—if any, in the case of self-employed freelancers—of standard employment benefits, including employer paid health insurance or any form of unemployment insurance, explains Wentworth.

As the report notes, “Those with the least to lose are most likely to lose it.”

Policy recommendations

Both Stettner and Wentworth explain that historical policy responses—and those set up to help workers laid off during the Great Recession—focus on traditional employment situations. Typical unemployment insurance is also biased against those who take up part-time or self-employment gigs while they’re looking for new full-time jobs by reducing unemployment payments. Some states have partial unemployment benefits designed for part-time workers, including those who’ve involuntarily had their hours reduced, but these vary widely. The report found that for workers whose hours are cut from full time to part time, “ten states would replace half of their lost earnings while fourteen states would provide no benefits at all.”

To address what’s becoming the new normal for U.S. workers, the report makes several recommendations. It proposes that states offer partial unemployment benefits to workers earning less than 150 percent of what they’d qualify for weekly if they were laid off (rather than working part time). This would substantially improve coverage for workers whose hours have been cut or who take part-time jobs after losing fulltime jobs.

“It also should be easier to file for these benefits,” says Stettner, explaining that current work documentation requirements don’t necessarily reflect the reality of how part timers work and get paid.

The report also recommends broadening unemployment insurance support for work-sharing programs. Work-share programs, explains Wentworth, are designed to help employers avoid layoffs by retaining their existing workforce but with reduced hours.

The report proposes beefing up existing financial support for work-share programs to reduce the impact to employees of reduced hours. “This is basically for high road employers,” says Wentworth.

The report also recommends a pilot program to provide unemployment insurance to freelancers who don’t have a traditional employer relationship. This is perhaps the most challenging of the report’s proposals since it seeks to address circumstances that extend well beyond the issue of reduced hours. Ideas include giving freelancers better access to certain tax credits in ways that help even out swings in earnings. It could also involve building on international examples such as professional guilds in Europe, where people contribute in order to draw benefits when needed, Stettner explains.

These proposals go beyond and build on those already being discussed at the state, local and federal level to require employers to provide more stable scheduling, pay a minimum number of hours if workers are called for a shift and that protect workers who request schedule changes. They would also begin to address the situations of the estimated 19.1 million Americans who depend solely on freelance income and are currently without any employment safety net.

“We’re just scratching the surface to understand how to come up with a better set of market-based and government solutions,” says Stettner. “We’ve created a whole view of the world that now applies to only about half the working people in America,” he says. “We have this huge divide we need to hammer on. It should concern everyone.”

This article originally appeared at Inthesetimes.com on December 28, 2016. Reprinted with permission.

Elizabeth Grossman is the author of Chasing Molecules: Poisonous Products, Human Health, and the Promise of Green Chemistry, High Tech Trash: Digital Devices, Hidden Toxics, and Human Health, and other books. Her work has appeared in a variety of publications including Scientific American, Yale e360, Environmental Health Perspectives, Mother Jones, Ensia, Time, Civil Eats, The Guardian, The Washington Post, Salon and The Nation.


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Trump falsely claims he created thousands of new jobs, and news outlets lap it up

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It was a huge announcement. An announcement so full of winning that we may even get tired of winning.

“Because of what’s happening and the spirit and the hope,” President-elect Donald Trump told reporters on Wednesday, “I was just called by the head people at Sprint and they’re going to be bringing 5,000 jobs back to the United States.”

And just in case there’s any doubt about who deserves credit for these jobs, Trump was happy to take it. “I just spoke with the head person,” Trump claimed, “he said because of me they’re doing 5,000 jobs in this country.”

There’s just one problem. It’s not true. Or, at least, the suggestion that Trump is responsible for new, previously unannounced jobs is not true. The jobs are coming to the United States, but they are coming as part of a series of investments that were first announced in mid-October.

Sprint’s parent company, SoftBank, said in October that it would partner with a Saudi sovereign wealth fund to invest about $100 billion in the tech sector. On December 6, SoftBank CEO Masayoshi Son told Trump the company would use some of these funds to bring 50,000 jobs to the United States. Trump promptly announced as much on Twitter.


SoftBank confirmed to the tech news site Engadget that the 5,000 jobs Trump took credit for on Wednesday are “part of the 50,000 jobs that Masa previously announced.” The company added that the 50,000 jobs “will be a combination of newly created jobs and bringing some existing jobs back to the U.S.”

Yet, despite the fact that the 5,000 jobs Trump took credit for on Wednesday were already announced earlier this month and are part of a series of investments that were themselves announced in mid-October, numerous headlines presented Trump’s claim as fact.

Media critic Oliver Willis rounded up some of the headlines that emerged shortly after Trump’s attempt to take credit for 5,000 new jobs. Here, for example, is USAToday:

And here is CNN:

And here’s the Washington Post:

In fairness, some of these outlets reported additional details about what actually happened in the body of their stories, although the many news consumers who only read these headlines would still be mislead. Some outlets also published far more informative headlines. Here, for example, is Bloomberg:

Sprint, it should be noted, helped Trump push a favorable line. “We are excited to work with President-Elect Trump and his Administration to do our part to drive economic growth and create jobs in the U.S.,” Sprint CEO Marcelo Claure said in a statement included in that release.

It’s also worth noting that Sprint has an incentive to help Trump use already-announced news to bolster his approval ratings. The company attempted a merger with its rival T-Mobile, but abandoned that effort in 2014 due to antitrust issues raised by the Federal Communications Commission.

After Trump takes power, however, Sprint could attempt to revive this effort under the new administration.

This blog originally appeared in ThinkProgress.org on December 29, 2016. Reprinted with permission.

Ian Millhiser is the Justice Editor at ThinkProgress. He is a skeptic of the Supreme Court, hater of Samuel Alito, and a constitutional lawyer of ill repute. Contact him at  imillhiser@thinkprogress.org.


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