Sunday, October 23, 2011
Matthew Yglesias cannot remember what he's read:Popular blogger Yglesias has a post about labor's declining share of national income. He starts out with: Peter Orszag has a column about the declining labor share of national income that concludes by saying that “We are effectively missing $500 billion a year in wages, and no one has a credible set of ideas that would bring it back.” ... And then goes on to argue with another blogger about arcane issues about volatility of the statistics. But Yglesias really should pay attention to what Orszag wrote. This, for example: (emp add) The two primary drivers are globalization and technological change. From 1980 to 2005, as the world became more integrated, the effective labor supply available on a global basis expanded by 100 percent to 300 percent (depending on how the estimates are done). That increased competition has pushed labor compensation down in the industrialized economies. ...
In a 2007 paper for the International Monetary Fund, Florence Jaumotte and Irina Tytell tried to parse the various causes of the declining labor share. In the U.S., the U.K., Australia and Canada, the economists concluded, labor globalization and technological change played roughly equal roles, and crucial ones at that. In European countries and Japan, technological change was more significant than labor globalization. Other factors --including unions and privatization trends -- have been found to be influential, but labor globalization and technological change loom as the dominant forces. There is something you can do about globalization. De-globalize, by enacting protectionist legislation. It's simple, has worked before (U.S. in the nineteenth century). But the elites don't like it because they actually prefer to have labor compete against one another.
posted by Quiddity at 10/23/2011 01:15:00 PM
8 comments
Did Quiddity really say this and does he really mean it?
"There is something you can do about globalization. De-globalize, by enacting protectionist legislation."
If this was tongue in cheek, I hope it was in his own cheek. With the world's population soon to reach 7 billion and continuing problems with scarce and strategic materials that Americans do not control but require for our way of live, how is protectionism the solution? Might that require armed conflict, like Bush/Cheney's interests in invading Irag because of, yes, I'll say it, OIL (as well as WMD)? Or might resulting trade wars result in armed conflicts started by other nations?
Say it ain't so, Quiddity.
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Hi Admin,
Very enlightening and beneficial to someone whose been out of the circuit for a long time.
shag, california outsourced the building of a bridge over to china. we are now outsourcing infrastructure/repair work.
how bad do things have to get before you say "enough!" ?
argentina was able to pay off the bulk of their IMF debt by raising tariffs on their imports. they raised something like 9 billion dollars. what would our take be if we followed suit?
Protectionist legislation! What a great idea! I'm sure it will put us right gob-smack-dab on the road to prosperity!
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