The Trick to Creating Middle Class Jobs: Stop Destroying Them (Dean Baker)

[chill_wind]

The Trick to Creating Middle Class Jobs: Stop Destroying Them

Dean Baker
Room for Debate (The New York Times), September 6, 2011

For the last three decades the government has pursued a variety of policies that had the effect of undermining the living standard of the middle class and redistributing income upwards. As a result, the middle class has experienced stagnant income and growing insecurity. The key to rebuilding the middle class is reversing these polices.

At the top of this list is a trade policy that was designed to put manufacturing workers in direct competition with low-paid workers in the developing world. This had the predicted and actual effect of lowering the wages of U.S. manufacturing workers. Since manufacturing jobs are comparatively well-paying jobs for the 70 percent of the workforce without a college degree, this policy had the effect of lowering wages for this larger group of workers as well.

(snip)

The correction to this policy is to also subject highly educated workers to international competition. This will lower wages of doctors, lawyers and other high-end earners. It will also lead to more affordable health care, college and other services provided by highly paid workers. Restoring the dollar to competitive levels can rebalance trade and create more than 4 million new jobs in manufacturing.

The over-friendly patent policy in the United States also shifts enormous sums from the middle class to the wealthy. We spend almost $300 billion a year (roughly $4,000 for a family of four) on prescription drugs that would cost around $30 billion a year in a free market. Other countries pay roughly half as much for their drugs.

more:

http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-trick-to-creating-middle-class-jobs-stop-destroying-them


On a separate note, one thing Baker did applaud pretty strongly in Obama's jobs speech was the idea of job sharing:

Washington, D.C.- Following the President's address to Congress and the announcement of the American Jobs Act, CEPR Co-Director Dean Baker released the following statement:

"It is encouraging to hear that President Obama included work sharing as part of his jobs agenda. This is a job creation measure that both has been shown to be successful and has the potential to break through partisan gridlock.

"The basic logic of work sharing is simple. Currently the government effectively pays for workers to be unemployed with unemployment insurance. Rather than just paying workers who have lost their job, work sharing allows workers to be partially compensated for shorter work hours. Instead of one worker getting half pay after losing her job, under work sharing five workers may get 10 percent of their pay cut after their hours are cut by 20 percent.

"This situation is likely to be better for both employees and employers. It allows workers to maintain their jobs and continue to upgrade their skills. It avoids a situation where workers may end up as long-term unemployed and find it difficult to get re-employed.

(snip)

"This approach has been a proven success in many countries, most importantly Germany. The unemployment rate in Germany is half of a percentage point below its pre-recession level even though its growth has been no better than in the United States. If a work sharing program here in the United States can reduce dismissals and layoffs by just 10 percent, it would generate the equivalent of 2.4 million new jobs a year.

http://www.cepr.net/index.php/press-releases/press-releases/statement-american-jobs-act-worksharing

[xchrom]

1. As soon as 'we the people' stop letting our 'leaders'

Stop lying to us about what's good for 'we the people' -- it'll happen.

[Oceansaway]

2. K&R...n/t