A central feature of the American economy in the three decades after World War II was a mass upward mobility in which each generation lived better than the last and workers experienced earnings gains through much of their careers. The central drivers of mass upward mobility were real wages that grew roughly in line with labor productivity.
The rise and fall of workforce participation has certain bubble-like characteristics.
A standard "solution" for state and local fiscal problems is to build up a "rainy day" fund. California will have such a fund on the ballot. Will it shield the state from future storms?
Hardly a day goes by when American unions are not attacked from some quarter: Last week, the Supreme Court weakens unions representing home care workers, one of the lowest paid and fastest growing occupations. This follows another ruling struck earlier last month in which a California judge threw out teacher tenure, due process and seniority rules under the dubious theory they are the cause of persistent inequality in education outcomes. And in 2011, Wisconsin’s governor decimated public sector unions by taking away state and local government employee rights to collective bargaining, reversing a policy in place since 1959. <More>
Poll results on income inequality produce some surprising results. Those groups that want to harness discontent over income inequality or other issues may not obtain the results they want.
Maybe what we need is a Grand Project like the 1960s man-on-the-Moon undertaking.
The conventional explanation for growing wage inequality is often referred to as the skills-biased towards technical change theory. This holds that with globalization and increased capital mobility, the economy has changed from industrial production to a post-industrial service-based economy. A look at the data, however tells a more complicated story which suggests that as much as the skills-biased technical change explanation is true, its effect on wage inequality was only exacerbated by the deliberate policy choices that effectively resulted in the absence of labor market institutions that have traditionally bolstered the middle class. Had union density been higher and the minimum wage kept pace with inflation, wage inequality would have been lower. In other words, wage inequality could be reduced were labor market institutions to be strengthened.
California's top-2 non-partisan primary system produced interesting results in June 2014. Will it ultimately reduce political polarization? We'll need more rounds of such primaries to tell.
If we really want U.S. manufacturing to come back from abroad, we have to tackle exchange rates. Despite the rash of articles about the come-back, there is little evidence for it beyond a minor cyclical recovery from the Great Recession.
Taylorism is more common than you might think.
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