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Wonkbook: America’s low-wage recovery

Welcome to Wonkbook, Wonkblog’s morning policy news primer by Puneet Kollipara. To subscribe by e-mail, click here. Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.

(Andrey Rudakov/Bloomberg)

The most important economic data you’ll hear this week won't be Wednesday’s GDP report, or Friday’s jobs numbers, both of which are very much subject to revision. Instead, it's data that looks back much further into the recovery. A new report from the National Employment Law Project finds low-wage jobs have increasingly replaced high-wage positions lost during the downturn.

"Lower-wage industries accounted for 22 percent of job losses during the recession, but 44 percent of employment growth over the past four years," the report finds. "Higher-wage industries accounted 41 percent of job losses, but 30 percent of recent employment growth." Lower-paid industries like food services, restaurants, temp help, and retail trade accounted for 39 percent of job gains over the last four years, NELP finds.

You’re going to hear a lot of talk about the economy in the upcoming midterm election season, and in 2016. In fact, this week the Senate is expected to take up a proposal to increase the Federal minimum wage to $10.10 an hour from $7.25 and index the minimum wage to inflation. This is a modest first step.

Which is to say, another way of looking at the buzz from a new best-selling tome on income inequality is that it’s indicative of a qualitative problem behind America’s headline economic numbers. We’re now nearly back to pre-recession employment levels, but we are decidedly not back to pre-recession employment quality. It’s no surprise, then, that major political advisors are advising Democrats not to use the phrase "economic recovery" to refer to one of the longest and least impressive such periods in recent memory. -- Ryan McCarthy

Wonkbook’s Number of the Day: 77,000. That's the number of families and individuals who have requested an exemption from Obamacare's individual mandate, per government documents seen by the Washington Post. [Note: a previous version of this post incorrectly stated that 77,000 families and individuals had requested additional time to sign up for exchanged-based insurance.]

Wonkbook’s Chart of the Day: This chart shows a new quarterly breakdown of gross domestic product by industry.

Wonkbook's Top 5 Stories: (1) Congress is back -- here's what it might accomplish; (2) a new Obamacare logistical headache?; (3) a very big week for economic data; (4) new Russia sanctions' impacts; and (5) data discrimination fears.

1. Top story: Election season is here. Here's what Congress might actually get around to doing

Congress gets back to probably doing nothing. "Congress gets back to work Monday after a two-week vacation, and it's looking like lawmakers will do what they do best: the bare minimum. Forget immigration, a tax overhaul, stiffer gun checks. They're all DOA. Raising the minimum wage or restoring lost unemployment benefits? Not going to happen. Forcing government approval of the Keystone XL pipeline? Veto bait. The only things likely to become law in a Congress bitterly divided between House Republicans and the Democratic-led Senate are those that simply have to pass, such as a measure to avoid a government shutdown. That's a short, short list. It gets even shorter if you leave off things that can wait until a postelection lame-duck session." Andrew Taylor in the Associated Press.

Only a few areas seem promising for bipartisan action. "The crisis in Ukraine may propel some legislation in the national security and energy fields with the White House and Congress studying potential bipartisan initiatives to strengthen sanctions against Moscow. But otherwise, President Barack Obama and Republicans in Congress, whose relations have been hostile for years, are not engaged in serious talks on any significant legislation ahead of the summer break in Washington, starting in late July. By consensus, the ability to legislate when Congress returns in September is politically impossible for all parties concerned, with the midterm congressional elections looming." Richard McGregor in The Financial Times.

Explainer: 5 ways Congress could, in fact, get something done. David Hawkings in Roll Call.

Down to the wire on immigration. "The push-pull of immigration reform is intensifying as Congress prepares to return to work for one of the last few legislative sessions before the midterm elections. The window for Congress to approve an immigration overhaul is closing, but House Speaker John A. Boehner continues to suggest that action is still possible -- even as he mocked his colleagues who find the hot-button issue too difficult....Boehner is racing the clock this summer, not only against the coming November election but the threat that the White House will take administrative action if Congress fails to act." Lisa Mascaro in the Los Angeles Times.

Don't be convinced by Boehner's mocking rant -- immigration reform is far from a sure bet. "Despite that bit of theatrics, Boehner's message on immigration this year has been consistent: That the House may one day act independently of the Senate but won't seriously engage on the subject until his colleagues reach a level of trust with Obama, who they say has openly disregarded federal law in an attempt to advance his political agenda. Further proof that the House won't take up immigration anytime soon came last week after Obama openly criticized House Republicans for not allowing votes on immigration bills." Ed O'Keefe in The Washington Post.

Guess what isn't on the House GOP's spring agenda -- yup, immigration. "The spring legislative agenda, which lays out the House GOP conference's priorities for the coming months, promises legislation aimed at 'building an America that works,' including, unsurprisingly, a promise to attempt to repeal Obamacare. But it doesn't mention the word 'immigration' once, despite continued statements from Speaker John Boehner (R-Ohio) that he would like to address the issue." Elise Foley in The Huffington Post.

Why immigration reform isn’t the answer to Republicans’ demographic woes -- yet. "Hispanic citizens' lower turnout and registration rates have so far limited their political impact. But if the significant share of Hispanic non-citizens gain a path to citizenship and actually start voting, the electoral map could change much more quickly than what the slowing changing demographics of the country suggest. And that would be a bad thing for Republicans." Peyton Craighill in The Washington Post.

GOP lawmaker is not amused by Boehner's immigration remarks. "Rep. Raul Labrador isn’t amused by Speaker John Boehner’s ribbing of fellow Republicans for dragging their feet on mmigration reform this year. Labrador (R-Idaho) said in a statement Friday that he was 'disappointed' in Boehner’s remarks conveyed back home in Ohio....In his statement Friday, Labrador repeated the primary reason why House Republicans have said they can’t do immigration reform: They simply don’t trust President Barack Obama to implement whatever laws Congress may write." Seung Min Kim in Politico.

Democrats see failed minimum-wage push as election-year boost. "The Senate is expected this week to take up a long-stalled push to raise the federal minimum wage to $10.10 an hour, a measure that is likely to be defeated but one that Democrats see as a winner on the campaign trail. The idea of raising the $7.25-an-hour minimum wage is politically popular, according to polls, but Republicans hope the coming debate will allow them to promote their view that raising the wage will lead to job losses." Siobhan Hughes in The Wall Street Journal.

It's not just Congress; Obama is also shifting into election-season mode. "The pre-summer shift is likely to involve a refining of the party message heading into November, including a much heavier emphasis on the economy and on drawing contrasts between Democratic and Republican budget proposals....Mr. Obama, who has been traveling in Asia this week, highlighting a trade policy many in his party oppose, isn’t planning to take another lengthy overseas trip until after the midterm elections....In theory, that’s designed to keep Mr. Obama’s attention on domestic matters." Carol E. Lee in The Wall Street Journal.

Obama presses GOP on minimum wage, immigration. "President Barack Obama continues to keep up the drumbeat for an unemployment extension and a minimum wage hike, but neither issue appears any closer to a reality in Congress. The president is taking his case to the airwaves and social media, using his advocacy arm, Organizing for Action, to try and pressure the GOP. On Saturday, Obama used his weekly radio address to push his $10.10 an hour minimum wage proposal, ahead of votes in the Senate when Congress returns next week." Steven T. Dennis in Roll Call.

THE WASHINGTON POST: Boehner's refreshing breath of honesty. "The trouble is that this bracing shot of honesty from Mr. Boehner probably will not fix the underlying problem, which is a Republican Party that cannot see a future for itself, or for the nation, beyond its own predominantly white, aging electorate. House Republicans, rooted in parts of the country demographically distinct from an increasingly diverse nation, are loath to embrace the nation’s Hispanics in part because relatively few of them live or vote in their districts. As they cling to an older America, a new America is rising fast." Editorial Board.

CAPLAN-BRICKER: Two chances that immigration could pass. "If reform were to pass, insiders say there are two opportunities for it to do so -- this summer, after the height of primary season is over; or the lame duck period after November’s elections. The thinking here is simple. There’s no way Republicans will tackle the issue in the middle of the primaries this spring, with a number of sitting members fending off challengers from the right. But by this June and July, the races where immigration could conceivably become divisive -- in Ohio, for example -- will be over, and the midterms will still be months away. In that window, Republicans might feel safe enough to bring up the bill." Nora Caplan-Bricker in The New Republic.

Top opinion

CHAIT: Maybe this election won't be about Obamacare? "One of the deepest regrets harbored, and often expressed, by conservatives is that the nomination of father-of-Obamacare Mitt Romney robbed them of their chance to run the kind of obsessive health-care campaign they have longed for since 2010. The midterms -- the first election after the law has taken effect -- give them their best chance to claim a kind of popular mandate against its implementation and breathe new life into the cause of repeal. They may have to choose between strategy and rage." Jonathan Chait in New York Magazine.

HEALEY: How realistic are the 'fast lane' fears of open Internet advocates? "A common assumption underlying the Net neutrality debate is that broadband ISPs will impose tolls on content providers, and content providers will pass those costs on to consumers, if only the Federal Communications Commission lets them....But how realistic is the fear of toll lanes? At this point, it's based largely on speculation -- which is not to say it's unfounded or unreasonable, just that it's guesswork. And Derakhshani's team seems to be ignoring some factors that protect against the worst-case scenarios they're predicting." Jon Healey in the Los Angeles Times.

FIRESTONE: Maybe Canada's middle class beat U.S.'s a long time ago. "I think the study is biased in that in median income per capita after taxes, it selected the wrong measure. What is needed is a measure of income or affluence that takes account of the value of cross-national variations in Government benefits delivered to the middle classes. Since the United States has lower taxes than most comparable nations, but delivers much less in safety net and entitlement benefits, it’s pretty clear that the measure used in the study reported on by The Times overestimates the real median income of the US middle class in comparison with the middle classes of other comparable nations and provides a misleading impression of the relative affluence of the American middle class." Joe Firestone in Naked Capitalism.

KOLBERT: The Keystone XL delay -- worth celebrating? "It’s difficult to applaud the Administration for simply dragging out the Keystone decision. Temporizing is rarely a sign of political courage, and the fight over the pipeline has lasted for so long that it’s threatening to undermine other, really vital projects; for instance, it now seems that divisions over Keystone may prevent passage of a Senate bill designed to encourage energy efficiency, which has garnered rare bipartisan support....And yet, on balance, the Administration’s stalling has to be celebrated." Elizabeth Kolbert in The New Yorker.

SALMON: A pessimistic reading of Piketty. "The many reviews of Piketty’s book are surprisingly unanimous on one point: that the weakest part of the book is the final part, where Piketty moves away from diagnosis and starts attempting to formulate a solution. Piketty’s rather French idea of a global wealth tax isn’t getting nearly the same amount of acclaim as the rest of the book is, and is very unlikely to happen....Which means that my reading of Piketty is ultimately pessimistic....Piketty has diagnosed a nasty condition. But I don’t think there’s a cure." Felix Salmon in Reuters.

GALLAGHER: On Pacific trade deal, buyer best beware. "Despite President Barack Obama’s charm offensive in the region, Pacific nations are well-advised to remain wary of the U.S. government’s position on the Trans-Pacific Partnership agreement (TPP). If U.S. trade negotiators got their way, the Pacific Rim would reap surprisingly few gains -- but take on big risk. Until the United States starts to see Asia as a true trading partner, rather than a region to patronize, it is right to hold out on the TPP." Kevin Gallagher in Naked Capitalism.

Awww interlude: Watch what happens when this man finds out he's going to be a grandpa.

2. The still-troubling logistics of Obamacare

Behind the scenes, much of is still under construction. "The Obamacare website may work for people buying insurance, but beneath the surface, is still missing massive, critical pieces -- and the deadline for finishing them keeps slipping. As a result, the system’s 'back end' is a tangle of technical workarounds moving billions of taxpayer dollars and consumer-paid premiums between the government and insurers. The parts under construction are essential for key functions such as accurately paying insurers. The longer they lag, experts say, the likelier they’ll trigger accounting problems that could leave the public on the hook for higher premium subsidies or health care costs." Kyle Cheney in Politico.

It's official: Oregon to shift to federal exchange technology. "The Oregon board overseeing the state’s deeply flawed health insurance exchange unanimously approved the Obama administration’s plan Friday to take over the marketplace, making Oregon the first state to drop its enrollment Web site for Directors of the exchange, Cover Oregon, voted Friday to drop its enrollment Web site, which hadn’t fully recovered from a failed launch Oct. 1. Oregon, which was awarded $305 million in federal grants to build the exchange, remains the only state not allowing full online enrollment in Affordable Care Act health plans." Jason Millman in The Washington Post.

Oregon has some big challenges looming in the transition. "About 240,000 people did manage to enroll through Cover Oregon, although many of them had to do it via pen and paper rather than keyboard and mouse. But switching to the federal exchange may cause some headaches of its own. The 70,000 Oregonians who signed up for individual insurance may have to do so all over again, says Clyde Hamstreet, Cover Oregon's third chief in five months....Oregonians may have other problems with the federal exchange, too.For example, five of the 16 health insurance companies currently doing business in the state don't have the computer interface needed to work with the federal exchange." Kristian Foden-Vencil in NPR.

Md.'s exchange stumbles don't seem to be impacting the governor's race much. "Here's a measure of Maryland's Democratic tilt: Even an epic failure in launching the state's health care website isn't enough to derail the political fortunes of the official responsible for it. The Affordable Care Act is that popular." Frank James in NPR.

Explainer: 5 takeaways from the state-based exchanges. German Lopez in Vox.

Not many who had trouble signing up have taken the feds up on their exemption offer. "About 77,000 families and individuals have requested exemptions from the health-care law’s so-called individual mandate, according to internal government documents obtained by The Washington Post. As of April 20, officials had approved tens of thousands of exemption requests and rejected none. The rest are on hold or in the process of being vetted. " Sandhya Somashekhar in The Washington Post.

Another signup problem: Political stigma in red states. " Health professionals, state officials, social workers, insurance agents and others trying to make the law work for uninsured Americans say the partisan divisions and attack ads have depressed participation in some places. They say the law has been stigmatized for many who could benefit from it, especially in conservative states like West Virginia that have the poorest, most medically underserved populations but where President Obama and his signature initiative are hugely unpopular." Jackie Calmes in The New York Times.

Other health care reads:

Affordable Care Act plans pose actuarial and rate challenges for insurers. Jay Hancock in The Washington Post and Kaiser Health News.

Another top Republican admits Obamacare isn't getting repealed. Caitlin MacNeal in Talking Points Memo.

Health wonks are shifting their focus to 2016. David Nather in Politico.

Trio of Democrats caught in a Medicaid bind. Kyle Cheney and Jennifer Haberkorn in Politico.

E-cigarettes are taking hold in Okla. Matt Richtel in The New York Times.

Animals interlude: These cats and dogs are best friends for life.

3. It's a very big week for economic data

Potentially promising jobs numbers ahead this week. "Employers in the U.S. probably expanded payrolls in April by the most in five months, adding to evidence the world’s largest economy is springing back from a weak start to the year. The Labor Department’s jobs report concludes a busy week on the U.S. economic calendar. The government’s initial tally of first-quarter gross domestic product on April 30 may show the slowest growth in a year. Federal Reserve policy makers, who on the same day conclude their third meeting of the year, will probably reduce the pace of assets purchases designed to stoke the economy." Vince Golle in Bloomberg.

The Fed's upcoming meeting is about more than just the taper. "Federal Reserve policymakers this week are set to continue paring their massive bond-buying stimulus, but below the smooth surface of a likely unanimous vote lies a deeply divided Fed struggling to lay the groundwork for more difficult decisions ahead. Fed Chair Janet Yellen...laid out three 'big' issues officials need to track: the level of slack in the labor market, whether inflation is rising back toward the Fed's 2 percent goal, and the factors that could derail the economic recovery. Unexpected 'twists and turns,' she said, could force the Fed to diverge from its highly telegraphed plan to end asset purchases later this year and raise interest rates in 2015." Ann Saphir and Jonathan Spicer in Reuters.

U.S. consumer sentiment up more than expected in April. "U.S. consumer sentiment rose in April to a nine-month high as views on current and near-term conditions surged, a survey released on Friday showed. The Thomson Reuters/University of Michigan's final April reading on the overall index of consumer sentiment came in at 84.1, beating an expectation of 83.0 in a Reuters survey and up from 80.0 the month before. The preliminary April reading was 82.6. The headline number was the highest reading since July 2013." Reuters.

Mortgage lending continues slowing down. "Fewer home sales and rising interest rates have led to the nation's lowest level of mortgage lending in 14 years. Just $235 billion in home loans were started in the first three months of the year, the lowest figure recorded in a quarter since 2000, according to data from trade publication Inside Mortgage Finance." Tim Logan in the Los Angeles Times.

Key as these numbers are, one finding is even more key: It's been a low-wage recovery. Annie Lowrey in The New York Times.

Long read: Speaking of wages, middle-class families feeling the squeeze as expenses soar, wages stall. Carol Morello and Scott Clement in The Washington Post.

Don't forget about that Pacific trade deal. "Obama’s visit as part of a four-country Asia tour also comes as he seeks a free-trade agreement with Malaysia as part of a broader 12-country Trans-Pacific Partnership that would link a region with $28 trillion in annual economic output, about 39 percent of the world total. Obama’s trip to Malaysia has been framed by administration officials as a way to encourage deeper economic and security ties with Najib, who will chair the Association of Southeast Asian Nations, or Asean, in 2015." Phil Mattingly and Margaret Talev in Bloomberg.

Could the trade deal make Malaysia's smoking epidemic worse? "Malaysia’s government is battling against a smoking epidemic that threatens its young people -- and it fears Barack Obama’s big Pacific trade deal will make the health crisis even worse....Malaysia is smarting that Obama’s negotiators won’t back the country’s efforts to take a strict anti-tobacco approach in the trade deal. Malaysia’s fear is that it will expensive, years-long international legal fight over its right to block cigarette companies from advertising." Eric Bradner in Politico.

Overall, not the best start to the trade talks, though. Juliet Eilperin and David Nakamura in The Washington Post.

Explainer: The facts and figures behind the TPP. Drew DeSilver in Pew Research Center.

Other economic/financial reads:

Explainer: Five takeaways from the new GDP by industry report. Jonathan House in The Wall Street Journal.

How gasoline prices are sending up retail prices. Marilyn Geewax in NPR.

The Manhattanization of America. Conor Dougherty in The Wall Street Journal.

Thrill-seeking interlude: A jump from the pinnacle of the world's tallest building.

4. The new round of Russia sanctions won't be crippling

Sanctions on the way, but they won't be super-sweeping like those that hit Iran. "U.S. and European governments planning to ramp up sanctions against Russia as early as Monday will target people in Russian President Vladimir Putin's inner circle and the industries they control, including defense, Obama administration officials said on Sunday....But neither the U.S. nor European officials have agreed to impose the broad economic sanctions Washington said could target entire sectors of Russia's economy, a step that would resemble the punitive measures painstakingly assembled over many years against Iran." Scott Patterson, Colleen McCain Nelson and Naftali Bendavid in The Wall Street Journal.

European firms have lobbied hard to dilute sanctions. "With the showdown over Ukraine escalating and President Obama warning Moscow of a tough new round of sanctions, Russia and its allies in the European private sector are conducting a separate campaign to ensure that they can maintain their deep and longstanding economic ties even if the Kremlin orders further military action. European banks and businesses are far more exposed to the Russian economy than are their American counterparts....As a result, they have lobbied energetically to head off or at least dilute any sanctions, making it hard for American and European political leaders to come up with a package of measures with enough bite." Alison Smale and Danny Hakim in The New York Times.

The crisis still seems to be hurting Russia's economy to some extent. "Russia's central bank raised its key interest rate Friday, hours after Standard & Poor's Ratings Services cut Russia's debt ratings to one notch above junk. The moves highlight the rising economic toll of Moscow's conflict with the West over Ukraine. The Russian economy has suffered since the crisis exploded in late February even though the U.S. and EU haven't so far imposed the sweeping sanctions they have threatened Russia could face if it continues to undermine the pro-Western government in Kiev." Alexander Kolyandr in The Wall Street Journal.

Can the U.S. find Putin's hidden fortune? "For years, the suspicion that Mr. Putin has a secret fortune has intrigued scholars, industry analysts, opposition figures, journalists and intelligence agencies but defied their efforts to uncover it. Numbers are thrown around suggesting that Mr. Putin may control $40 billion or even $70 billion, in theory making him the richest head of state in world history. For all the rumors and speculation, though, there has been little if any hard evidence, and Gunvor has adamantly denied any financial ties to Mr. Putin and repeated that denial on Friday." Peter Baker in The New York Times.

Oh no, not another 'Frozen' viral video interlude: "Frozen" does thriller.

5. The 'Big Data' you generate could be used to discriminate against you

White House review flags discrimination potential in 'Big Data' use. "A White House review of how the government and private sector use large sets of data has found that such information could be used to discriminate against Americans on issues such as housing and employment even as it makes their lives easier in many ways. 'Big data' is everywhere. It allows mapping apps to ping cellphones anonymously and determine, in real time, what roads are the most congested. But it also can be used to target economically vulnerable people....Federal laws have not kept up with the rapid development of technology in a way that would shield people from discrimination." Eileen Sullivan in the Associated Press.

At least one lawmaker is taking notice already. "Results of the White House’s pending report on the potential perils of 'big data' are already leading to extra scrutiny on the issue, and it hasn’t even been released yet." Julian Hattem in The Hill.

Other tech reads:

Surveillance court rejected Verizon challenge to NSA calls program. Ellen Nakashima in The Washington Post.

For Web users, FCC raises specter of unequal Internet. Edmund Lee in Bloomberg.

Parkour interlude: Demonstrated with a car.

Wonkblog roundup

Obama the Unforgiving, in one chart. Christopher Ingraham.

Cover Oregon officially admits enrollment site is broken beyond repair. Jason Millman.

Stunningly rapid urban development, seen through Google Street View. Emily Badger.

Tweets from the Hill: Cory Booker tweeted 80 dog and cat pictures this week. Christopher Ingraham.

Et Cetera

How a Gulf settlement BP once hailed became its biggest target. Campbell Robertson and John Schwartz in The New York Times.

Report: Gun inspections are brisk; ATF inspections aren't. John Diedrich in the Milwaukee Journal-Sentinel.

U.S. electricity prices may be going up for good. Ralph Vartabedian in the Los Angeles Times.

A battle is looming over renewable energy and fossil-fuel interests are losing. Steven Mufson and Tom Hamburger in The Washington Post.

Obama administration wants better-trained teachers. Lyndsey Layton in The Washington Post.

U.S. and China lift climate hopes with new round of talks. Pilita Clark in The Financial Times.

Got tips, additions, or comments? E-mail us.

Wonkbook is produced with help from Michelle Williams, Amrita Jayakumar and Ryan McCarthy.



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