Lawrence Mishel

Lawrence Mishel is president of the Economic Policy Institute, an independent, nonprofit, nonpartisan think tank that researches the impact of economic trends and policies on working people in the United States and around the world. EPI's mission is to inform people and empower them to seek solutions that will ensure broadly shared prosperity and opportunity.

Recent Articles

Job Lurch

Last Friday, the Bureau of Labor Statistics released the February employment numbers. Once again, most economists had forecasted big gains in jobs; once again, their forecasts were way off. The report dashed expectations regarding the arrival of healthy job growth, painting a stark picture of a labor market stuck in neutral. While the government added 21,000 new jobs last month, no private sector jobs were created. Although unemployment remained at 5.6 percent, it did so only because 392,000 people stopped looking for work and left the labor force. To top it off, the persistently weak job market has led to slower wage growth; wages advanced by only 1.6 percent over the last year, tying with the wages of 1986 for the weakest growth rate since 1964. Even with the current low inflation rate of about 2 percent, wages are falling behind inflation. This disappointing report raises concerns beyond the labor market. Despite blather about the “ownership society” -- a reference to the fact that...

Growing Pains

After two and a half years of sluggish growth and persistent employment losses, the nation's overall output of goods and services shot up in the third quarter of 2003; unemployment, meanwhile, has ticked down to just below 6 percent. Accordingly, some analysts have declared that the economy is "fixed" and that we have "turned the corner." Moreover, some commentators are now saying that the economy, which had been expected to drive the 2004 political debate, will not be a major issue, implying that the election is in the bag for the president. And the Bush administration is claiming recent growth affirms that its tax cuts are working. "And now we are seeing the results of the hard work of the American people and the sound policies of this administration," Vice President Dick Cheney said on Jan.13 at a fund-raiser in Oregon, "The figures for the third quarter show the economy grew at an annual rate of 8.2 percent -- the fastest pace in nearly 20 years. Business investment, manufacturing...

Rising Tides, Sinking Wages

The economy has grown, productivity is up, profits are soaring. There's just one problem: Americans' standard of living.

T he economy seems to be in great shape. The growth rate in 1994 was a brisk 4.1 percent. Unemployment has been hovering at about 5.5 percent, well below the 6 to 6.5 percent level that many economists (wrongly) consider full employment. Job growth has been so strong that President Clinton's campaign pledge to create eight million jobs may well be fulfilled in the third year of his first term. Corporate profitability has reached postwar records. The stock market is booming. Inflation is nowhere to be found except in the imagination of central bankers and bond traders. We are also witnessing a revival of productivity growth and a celebration of America's renewed competitiveness, as U.S. products close the quality gap with imported goods and unit labor costs continuously fall relative to those of other advanced countries. Some analysts feel that our productivity growth is so strong and the promise of computerization so great that we are on the verge of a new, golden economic age. There'...

Behind the Numbers: Capital's Gain

Contrary to the conventional view among economists, the shares of national income going to capital and labor have shifted. Capital's gain has been labor's loss.

T he income squeeze on the middle class is the big economic story of this decade, but record-setting stock prices and soaring executive pay remind us that not everyone is experiencing a squeeze. The stock market boom and the executive windfalls, in turn, reflect growth in corporate profits. And the contrast between spectacular profit trends and the disappointing wage growth could not be more dramatic. This disparity reopens the rather impolite question of whether we are observing a significant redistribution of income from labor to capital. Most economists have insisted that we are not. But the latest data strongly show that a nontrivial redistribution of what economists call "factor incomes" has indeed taken place in the 1990s, with the foundation having been laid in the 1980s. The primary evidence of this shift is that the current rate of return to capital—profits and interest income per dollar of assets—is very high by historical standards and is high relative to similar returns in...