What creates jobs? Welcoming high-skilled STEM workers in technology fields creates on average 4.3 local, service sector jobs through the multiplier effect. This finding should inform U.S. immigration policy and lead to increased flows of high-skilled workers into the country.
Sharing in the Success of the Digital Economy: A Progressive Approach to Radical Innovation
This collection of essays, edited by ITIF and the London-based think tank the Policy Network, explores how information technology and the digital economy can boost living standards by driving innovation and productivity growth. It also assesses the roles of government and the private sector in promoting this continued digital transformation through investment and smart regulatory policy.
Increase H-1B Visas as Part of the DHS Appropriations Bill
Although funding for the Department of Homeland Security has been settled (with Republicans once again learning the folly of taking a hopeless position), the need for bipartisan solutions to immigration reform remains, ITIF's Joe Kennedy writes in The Hill. A good first step would be for the new Republican majorities in Congress to pass a bill expanding the number of H-1B visas, allowing more skilled people to come to U.S. shores.
A Response to the Critics
In this blog post, Stephen Rose addresses critics of his report "The False Claim That Inequality Rose During the Great Recession." He argues that no one really found faulted his analyses. They just changed the topic and implied that the report showed a lack of appreciation for the negative effect that the high level of inequality has on our country. This is too bad, since all policy debates benefit from more, not fewer facts and analysis.
The False Claim That Inequality Rose During the Great Recession
Income inequality has become a major topic of public concern lately, partly as a result of the release last year of Thomas Piketty’s best-selling book on inequality, Capital in the Twenty-First Century, and his writings with his colleague Berkeley economics Professor Emanuel Saez. In 2013, Saez claimed that 95 percent of growth during the recovery from the Great Recession went to the top one percent. Many commentators jumped on these results as a foreboding sign of what was to come in the future and called for a focus on redistribution, rather than growth policies. After all, if the rich are getting all the gains, why focus on overall economic growth?
However, the claim that income inequality grew following the Great Recession is nothing more than a statistical gimmick. In fact, Piketty’s own research shows that the “1 percenters” experienced the largest loss of income from 2007 to 2012. A Congressional Budget Office report found that while the richest one percent of households saw their after-tax incomes decline by 27 percent from 2007 to 2011, the bottom 95 percent saw only one to two percent loss.
This report analyzes the data to provide a clearer picture on income inequality during the last eight years and argues, given these findings, that it would be a mistake to give up on pro-growth policies in favor of a predominant focus on redistribution.