At 22:18 24/10/2012, you wrote:
Agree. Except the mainstream media, here the NY
Times, has trouble even raising the
idea. Why? I guess it goes against the
religion of continuing progress, the nostrum of continuing economic growth.
Arthur
And, if so, this is where Keynes would not be
helpful. He never thought -- even in the
Depressed '30s -- that we would have anything
other than an increasing amount of consumer goods
and services at our disposal in the years to
come. But there's no reason why GDP shouldn't
move over from a predominantly consumer-led economy to a producer one.
If my own hypothesis about status is correct,
however (that it is the main driving force behind
the precise choice of most [pricey]consumer
goods) then status will have to revert to its
original context -- the social/working group in
which reputation and rank ordering is arrived at voluntarily.
Keith
From: [email protected]
[mailto:[email protected]] On Behalf Of Keith Hudson
Sent: Wednesday, October 24, 2012 2:02 PM
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION
Subject: Re: [Futurework] future of work and income
Excellent though Leonhardt's essay is in many
respects, it doesn't mention the possibility
that the thundering herd of the industrial
revolution might have finally halted. Other
periods of exuberant economic growth have
occurred throughout history -- two or three
times each in India and China alone -- only to
be followed by long periods of quiescence. Is
there any reason in principle why that shouldn't be happening now?
Keith
At 14:55 24/10/2012, you wrote:
Standard of Living Is in the Shadows as Election Issue
* by DAVID LEONHARDT NY Times
* Oct. 23, 2012
* <http://tinyurl.com/9qaw2y5>http://tinyurl.com/9qaw2y5
*
* WASHINGTON Taxes and government
spending. Health care. Immigration. Financial regulation.
They are the issues that have dominated the
political debate in recent years and have played
a prominent role in this presidential campaign.
But in many ways they have obscured what is
arguably the nations biggest challenge:
breaking out of
<http://economix.blogs.nytimes.com/2012/07/23/a-closer-look-at-middle-class-decline/>a
decade of income stagnation that has afflicted
the middle class and the poor and exacerbated inequality.
Many of the bedrock assumptions of American
culture about work, progress, fairness and
optimism are being shaken as successive
generations worry about the prospect of
declining living standards. No question,
perhaps, is more central to the countrys global
standing than whether the economy will perform
better on that score in the future than it has in the recent past.
The question has helped create a volatile period
in American politics, with Democrats gaining
large victories in 2006 and 2008, only to have
Republicans return the favor in 2010. This year,
economic anxiety, especially in industrial
battlegrounds like Ohio, is driving the campaign
strategies of both President Obama and Mitt Romney.
The
<http://economix.blogs.nytimes.com/2012/08/20/the-14-potential-causes-of-the-income-slump/>causes
of income stagnation are varied and lack the
political simplicity of calls to bring down the
deficit or avert another Wall Street meltdown.
They cannot be quickly remedied through
legislation from Washington. The biggest causes,
according to interviews with economists over the
last several months, are not the issues that dominate the political debate.
At
<http://economix.blogs.nytimes.com/2012/08/21/globalization-and-the-income-slowdown/>the
top of the list are the digital revolution,
which has allowed machines to replace many forms
of human labor, and the modern wave of
globalization, which has allowed millions of
low-wage workers around the world to begin competing with Americans.
Not much further down the list
<http://www.nytimes.com/2011/06/26/sunday-review/26leonhardt.html>is
education, probably the countrys most diffuse,
localized area of government policy. As skill
levels have become even more important for
prosperity, the United States
<http://www.google.com/hostednews/afp/article/ALeqM5juGFSx9LiPaur6eO1KJAypB2ImVQ>has
lost its once-large global lead in educational attainment.
Some of the disconnect between the economys
problems and the solutions offered by Washington
stem from the nature of the current political
debate. The presidential campaign has been more
focused on Bain Capital and an apology tour
than on the challenges created by globalization and automation.
But economists and other analysts also point to
the scale of the problem. No other rich country
not Japan, not any nation in Europe has
figured out exactly how to respond to the
challenges. The whole notion of the American
dream, said
<http://web.mit.edu/flevy/www/>Frank Levy, an
M.I.T. economist, described a mass upward
mobility that is just a lot harder to achieve right now.
For the first time since the Great Depression,
median family income has fallen substantially
over an entire decade. Income grew slowly
through most of the last decade, except at the
top of the distribution, before falling sharply
when the financial crisis began.
By last year, family income was 8 percent lower
than it had been 11 years earlier, at its peak
in 2000, according to inflation-adjusted numbers
from the Census Bureau. On average in 11-year
periods in the decades just after World War II,
inflation-adjusted median income rose by almost 30 percent.
Matching the growth rates of the postwar period
when the country was poorer, when harsh
discrimination against women and minorities was
receding and when the rest of the world was
weaker is probably impossible. Yet there is
still a vast difference, both economically and
politically, between incomes that are rising modestly and not at all.
Historically, periods of economic stagnation
have tended to bring pessimism, political
turmoil and a lack of social progress, said
Benjamin Friedman, an economic historian and the
author of
<http://www.nytimes.com/2005/11/27/books/review/27easterbrook.html?pagewanted=print>The
Moral Consequences of Economic Growth. The
political volatility and
<http://www.people-press.org/2012/06/04/partisan-polarization-surges-in-bush-obama-years/>partisan
rancor of the last several years seem to fit the pattern.
The recent stagnation has also led, economists
say, to confusion and even scapegoating about
the real sources of the problem. The causes that
can seem obvious, and that often shape the
political debate, are not necessarily the correct ones.
Take immigration, especially illegal
immigration. Whatever other problems it may
cause, evidence suggests that
<http://economix.blogs.nytimes.com/2012/10/19/immigration-and-american-jobs/>it
has not played a significant role in the income slump.
It may have caused a slight decline in the wages
of native-born workers without a high school
diploma (and maybe not even that). But most
illegal immigrants lack the skills to compete
with the bulk of native workers, according to
research by Giovanni Peri, Chad Sparber and
others. Notably, incomes in some states with
large immigrant populations, like California,
have risen faster
<http://www.nytimes.com/2006/04/16/business/yourmoney/16view.html>than
in states with relatively few immigrants, like Ohio.
The minimum wage, similarly, appears to play
only a minor role in the income slump. It
<http://economix.blogs.nytimes.com/2012/09/05/why-the-minimum-wage-doesnt-explain-stagnant-wages/>has
risen faster than inflation since 2000, even as
overall pay at the bottom of the income
distribution has not. And the size of the
federal government also looks like a dog that is
not barking: Washington collected taxes equal to
<http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200>15.4
percent of gross domestic product last year, down from 20.6 percent in 2000.
A second group of much-cited forces have indeed
played a role in middle-class stagnation and
inequality, many economists argue, just not as
big a role as automation, globalization or education.
Health care costs have grown sharply over the
last decade, leaving employers with less cash to
use on salaries. Labor unions have shrunk; all
else equal, unionized workers earn more, often
at the expense of corporate profits.
<http://www.cbo.gov/publication/43373>Tax rates
have fallen more for the affluent than for
anyone else, directly increasing the take-home
pay of top earners and indirectly giving them
more incentive to earn large amounts.
But many of these factors are particular to the
United States, while globalization and
automation are obviously universal forces.
One of the more striking recent developments in
economics has been economists growing
acceptance of the idea that globalization has
held down pay for a large swath of workers. The
public has long accepted the idea, but
economists resisted it, pointing to the
long-term benefits of trade. That is starting
to change only in the face of
<http://economix.blogs.nytimes.com/2012/08/29/changing-views-of-globalizations-impact/>very
strong evidence over the past decade, said
Edward Alden of the Council on Foreign Relations.
In particular, job growth and wage growth have
been weaker in sectors exposed to global
competition especially from China than in sectors that are more insulated.
Automation creates similar patterns. Workers
whose labor can be replaced by computers, be
they in factories or stores, have paid a
particularly steep price. The American
manufacturing sector produces much more than it
did in 1979, despite employing almost 40 percent fewer workers.
Workers with less advanced skills have also
suffered disproportionately. The pay gap between
college graduates and everyone else is near a
record. Despite the long economic slump and
the well-chronicled struggles of some college
graduates their unemployment rate
<http://www.bls.gov/news.release/empsit.t04.htm>is just 4.1 percent.
What is the solution to this thicket of economic forces?
That question is the one that Mr. Obama and Mr.
Romney are trying to convince voters that they
can best answer. They both accept that the
government and the market have a role, but they
put a different emphasis on those roles.
It is hard to see how either globalization or
automation can be stopped. The proposed
solutions instead tend to involve managing them.
If the economy can be made to grow fast enough,
incomes can still rise across the board, as they
did when the unemployment rate fell below 5
percent in the 1990s and briefly below 4 percent
in 2000. If educational attainment rises, more
people will be able to get jobs that benefit
from technology and global trade, rather than
suffer from it. And if inequality continues to
soar, the government could choose to use the tax
code to ameliorate it a solution that
Democrats favor and Republicans say will hurt economic growth.
Maybe the biggest reason for optimism is that
there is still a strong argument that both
globalization and automation help the economy in
the long run. This argument remains popular with
economists: Trade allows countries to specialize
in what they do best, while technology creates
opportunities to extend and improve life that never before existed.
Previous periods of rapid economic change also
created problems that seemed to be permanent but
were not. Neither the cotton gin nor the steam
engine nor the automobile created mass unemployment.
When technology reduces the need for certain
kinds of labor, we know that some inventive
people will one day come along and find a way to
use that freed-up labor making things that other
people want to buy, said Mr. Friedman, the
economic historian. Thats what in the long run made the Luddites wrong.
He added, How long does it take the Luddites to
be wrong a few years, a decade, a couple of decades?
Perhaps just as important, what happens to the
workers who happen to be living during a time
when the Luddite argument has some truth to it?
_______________________________________________
Futurework mailing list
<mailto:[email protected]>[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
