Happy Anniversary, EPI

The Economic Policy Institute celebrated its 40th anniversary Thursday with a policy conference and gala. EPI has long been a key sister organization to the Prospect. We’ve published many of its thinkers, relied on its work, and shared goals for the country.

As my colleague Harold Meyerson wrote in the authoritative history of EPI as the workers’ think tank, EPI “has practiced an empirically rooted institutional economics that documented how unchecked corporate power and its accompanying agenda—the destruction of unions, the offshoring of industry, the suppression of wages, the discrimination against women and minorities—led to the squeezing of America’s middle class, the marginalization of its working class, and the rise in its deaths of despair.”

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Along with co-founding the Prospect, one of my proudest achievements is to have co-founded EPI. In 1986, I worked with anti-poverty activist Jeff Faux (who became EPI’s founding president), former labor secretary Ray Marshall, economists Lester Thurow and Barry Bluestone, and future Prospect co-founder Bob Reich to launch and raise money for what became EPI.

We acted to fill an immense void that had serious political consequences. At the time, there was simply no research institution on economics that was not party to the neoliberalism that dominated the economics profession and in turn the economic advice given to presidents. The Brookings Institution, a center-right, corporate-funded behemoth, was invariably described in the press as a liberal think tank.

Politically, the problem was not only Republicans under Ronald Reagan. Democrats, influenced by Jimmy Carter and the Democratic Leadership Council, and a few years later by the DLC’s Bill Clinton, became supporters of supply-side tax cuts, deregulation, and corporate-led globalization and travesties like NAFTA. A few years later, in 1989, we founded the Prospect out of the same need to counter the widespread drift to the right.

Several unions stepped up and gave EPI its first round of seed funding. AFSCME and the Steelworkers were key. As Lynn Williams, president of the Steelworkers, later said, helping to underwrite EPI was “the best investment I ever made.” AFL-CIO President Rich Trumka soon became a big supporter. Foundations came only later, and only gingerly.

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In founding EPI, we made three key decisions. EPI would be rigorously empirical, not propagandistic. EPI would work not as leftist outsiders but to influence the mainstream. And while EPI took funding from the labor movement and paid special attention to the condition of workers, it would be far broader than just a union think tank.

Over the years, with precise and rigorous research, EPI has demolished one premise of orthodox thinking after another and has won the respect of the mainstream economics profession. In fact, globalization did not improve efficiency. It just destroyed industry and made the rich richer. Deregulation did not make markets work better. It increased risk and opportunism.

One article of faith in mainstream economics was that the worsening distribution of income and wealth was the result of technological changes. EPI’s work conclusively demonstrated that the widening inequality was the result of policy choices that could have been different, which in turn reflected disparities of political and economic power.

EPI’s iconic chart, below, showing how wages and productivity growth rose in lockstep during the egalitarian postwar boom, and then began diverging in the neoliberal 1970s and 1980s, was widely reproduced. EPI’s annual volume, The State of Working America, launched on Labor Day 1988, became an encyclopedic and widely valued research resource. It was the work of Larry Mishel, who succeeded Jeff Faux as EPI president.

EPI simply did not make mistakes. As an insurgent think tank challenging the conventional wisdom, it could not afford to.

EPI incubated economists who went on to serve at all levels of government. Jared Bernstein, EPI’s longtime research director and chief economist, went on to play the same role for President Joe Biden. As much as anyone, Bernstein turned Biden’s presidency away from the neoliberalism that had characterized the last three Democratic presidencies.

Richard Rothstein researched and wrote his best-selling book, The Color of Law, on the role of government North as well as South in requiring state-led segregation, as an EPI Distinguished Fellow. The Thursday EPI event was also the annual EARN conference, a gathering of state-level research and advocacy groups sponsored and partly funded by EPI in 44 states—a habitat for the next generation of engaged progressive economists.

At Thursday’s opening plenary, EPI’s subtle grasp of the connection between economics and politics was on display. The subject was affordability. EPI’s current research director, Josh Bivens, observed that as an economist, he was obliged to point out that in recent years wages on average have just about kept pace with inflation. But, he quickly added, that is not a smart message for wage and salary workers who have not gotten their proper share of the national wealth. Their actual earnings have lagged far behind the rising costs of housing, health care, college debt, energy, child care.

Speaking at the same plenary, Heidi Shierholz, EPI’s current president, observed that it’s all about power, something that orthodox economists tend to ignore. And nothing is more important to worker power than a resurgent labor movement.

Recent Democratic presidents going back to Jimmy Carter, ambivalent about unions, failed to enact labor law reform to make it possible for workers to exercise their right under the Wagner Act to organize and join unions. Support for unions is now at a decades-long high.

The next Democratic president, like several previous ones, will be subject to the undertow of corrupt money and bad self-serving advice. America’s working people will need EPI more than ever.

A very happy birthday, and many more.

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