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Article Artículo

Health and Social Programs

The Demographic Horror Story and Other Children’s Tales

The Very Serious People in Washington have been running around arguing that the country should be very worried about the aging of the population. The story is that we face an enormous crisis because the ratio of workers to retirees is projected to fall from 2.8 to 1 in 2013 to just 2.0 to 1 over the next two decades. This declining ratio is supposed to mean that our children will face an enormous burden in supporting a rapidly growing population of retirees.

While this projection produces much hand wringing and head nodding among the Very Serious People (VSP), fans of arithmetic know that it provides little basis for concern. The reason for the lack of concern is often given by the VSPs themselves. When pushing the scare story they often throw in the tidbit that the ratio of workers to retirees used to be 5 to 1 back in the 1960s.

Of course the country is far richer on average today than it was in the 1960s even though we have much lower ratio of workers to retirees. The secret is productivity growth. Output per worker hour is more than twice as much in 2013 as it was in the 1960s. As a result, we can both have a larger share of output diverted to supporting retirees and have higher living standards for both workers and retirees.

The same story holds going forward. In 20 years average output per worker is conservatively estimated to be more than 40 percent higher than it is today. This means that even if workers were to see an increase in their payroll tax of 2 or 3 percentage points (almost certainly more than would actually be the case – we can also raise the cap on taxable wages) they would still have much higher after-tax wages in 2033 than they do today.

Dean Baker / March 29, 2013

Article Artículo

Haiti

Latin America and the Caribbean

World

Inter-American Commission Grants Protection to IDP Camp Facing Eviction

Earlier this week, the Inter-American Commission on Human Rights (IACHR) granted precautionary measures in favor of the 567 families that have been under constant threat of eviction in the Grace Village camp. Given the “imminent” threat to those in the camp, the IACHR urged the Government of Haiti:

1. To adopt the necessary measures to avoid the excessive use of force and of violence in any eviction.  In particular, to guarantee that the public authorities' actions as well as those of private parties pose no risk to the life and personal integrity of the camp residents;

2. To implement effective security measures, in particular, to ensure that there is an adequate patrol around and inside the camp and to install police stations close to the camp. To this effect, the IACHR asks the Government to provide special protection to women and children;

3. To ensure that the residents have access to the potable water required for basic needs;

4. To consult with the beneficiaries and their representatives regarding the measures that need to be taken.  In particular, ensure that the camp residents' committee as well as grassroots women's groups can fully participate in the planning and execution of the measures implemented for the benefit of residents, including measures focused on the prevention of sexual violence and other forms of violence in the camp; and

5. To inform [the public] regarding the adopted measures so as to investigate the events that justifies the adoption of precautionary measures

As we have written previously, the residents of Grace Village have faced significant and on-going harassment, which has included government complicity at both the local and national level. The alleged owner of the land is Pastor Joel Jeune, the founder of a Florida based 501(c)(3) organization, Grace International Inc. As the request for precautionary measures points out, the pastor’s close “ties to the mayor’s office and the local police force him to enlist the help of Haitian police to carry out illegal evictions. With his private security forces and the Haitian police, Pastor Joel Jeune has orchestrated and participated in violent, forced evictions of displaced families living inside Grace Village.”

Jake Johnston / March 28, 2013

Article Artículo

Haiti

Latin America and the Caribbean

World

Haitian Government Hires U.S. Lobbying Firm

The Haitian government’s Société Nationale des Parcs Industriels (SONAPI) hired a U.S. lobbying firm in February to draft documents and arrange meetings “with Congressional Members and staff and Administration officials to seek change to trade legislation” and to help “implement” worker rights provisions, according to Foreign Agent registration documents. SONAPI is the government entity which owns the newly-opened Caracol industrial park, and is the institution responsible for locating, organizing and managing industrial parks throughout Haiti. Yesterday, a presidential decree named business owner Bernard Schettini as the new head of SONAPI, replacing George Sassine, the ex-president of the Association of Industries of Haiti and the former Executive Director of CTMO-HOPE, the commission in charge of implementing U.S. preferential trade legislation.

Lobbying disclosures show that Sorini, Samet & Associates has been hired at the rate of $5,000 a month to help SONAPI lobby congress. Andrew Samet, the co-founder and principal of the firm, was the Deputy Undersecretary of Labor under President Clinton and later worked for law firm Sandler Travis and Rosenberg which counted the industry group the American Apparel and Footwear Association as a major client (the Association in turn has supported “free trade” deals such as CAFTA and HELP legislation for Haiti). Samet was hired as a lobbyist by Colombia in 2008 when it was pushing for passage of a “free trade” agreement with the U.S. Samet was hired to provide “a strategy on labor issues directed to support favourable consideration” of the FTA with the U.S. and to assist "the government of Colombia in presenting information on labor issues with relevant U.S. stakeholders, including U.S. Congress, the administration, labor advocacy groups, trade unions and the media." The FTA with Colombia was eventually passed despite the ongoing killing of unionists in the country, which continues to this day. In June 2012 the AFL-CIO issued a report documenting how the Labor Action plan attached to the FTA was failing to prevent labor and human rights violations. For six months of work in 2008, Sorini, Samet & Associates received over $100,000, according to lobbying disclosuredocuments.

The firm has also done previous work for Sassine and the Haitian government during Sassine’s tenure at CTMO-HOPE, earning nearly $400,000 from 2008-2010 lobbying Congress for the passage of new trade legislation and the implementation of “worker rights provisions.” Industrial parks and garment manufacturing are seen as vital development tools by the Haitian government and many of its international backers. The industry is reliant on trade preferences offered by the United States which started in 2006 with the HOPE act and culminated in the “HELP” act, which was passed soon after the earthquake. According to stakeholders, the HELP legislation, which extended the length of the preferences and increased the amount of textiles that would be subject to benefits, was a key part of bringing in Sae-A Trading, the global manufacturer that recently opened a factory at the Caracol industrial park.

While Sorini, Samet & Associates was previously hired to help implement “worker rights provisions” associated with the HOPE legislation, factories in Haiti are still in violation of a significant number of provisions under the preferential trade legislation. The most recent Better Work Haiti report found that 21 of 22 factories covered in their analysis (Caracol is not covered yet) were non-compliant with minimum wage laws, for example. This past summer, the Office of the U.S. Trade Representative, in their annual compliance report, found that “there was sufficient credible evidence to conclude that three specific producers were non-compliant with one or more of the core labor standards.” This was the first time in four years that the report named specific factories. The violations included non-compliance in: sexual harassment, freedom of association and forced labor.

Jake Johnston / March 27, 2013

Article Artículo

Government

Inequality

Workers

Carry On, Wayward Sons
I got an email yesterday from Elaine Kamarck, resident scholar at Third Way. We don't know each other, but she wanted to let me know about a new Third Way study: Wayward Sons: The Emerging Gender Gap in Labor Markets and Education (pdf). I had already rea

John Schmitt / March 27, 2013

Article Artículo

Affordable Care Act

The War on Social Security and the War on Excessive Health Care Costs

Ezra Klein put up a blog post last night on the corruption of national politics and the media. It showed graphs from the International Federation of Health Care Plans that compared the cost of various medical procedures and products in the United States with the cost elsewhere in the world.

The graphs showed that the United States is a huge outlier, paying two or three times as much as other countries (sometimes more) for nearly every item on the list. The bottom line is that we spend 8.1 percentage points ($1.3 trillion a year) more of our GDP on health care than the average for other wealthy countries. We have nothing to show for this in terms of better health care outcomes. (The gap is actually larger, since average income in these countries is around 25 percent less than in the United States. We would expect to have better outcomes even if we spent the same share of our income on health care, just as we would expect better housing if we spent the same share of our larger income.)

The reason why Klein's charts reveal the corruption of politics and the media is that this information is news to anyone. The media and politicians harp endlessly on the cost of Social Security routinely yelling about how outrageously expensive it is. In fact, National Public Radio just did a major piece on the Social Security disability program and proclaimed to listeners that it was unaffordable. 

While the cost of the disability program has increased due to the economic collapse, once the economy recovers it is projected to cost less than 0.9 percent of GDP, a bit more than one tenth of the excess cost of our health care system. In fact the entire cost of the combined Social Security retirement and disability program are projected to peak at under 6.4 percent of GDP in the mid 2030s, less than 80 percent of the excess cost of the U.S. health care system. NPR has no problem pronouncing the cost of the disability program as unaffordable, implying to its listeners that it must be changed, but it doesn't make the same pronouncements about the U.S. health system.

Dean Baker / March 27, 2013