Monday, March 05, 2007
Tweet[IWS] Brookings: THE CASE for WAGE INSURANCE [28 February 2007]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Brookings Institution
The Case for Wage Insurance
Joint Economic Committee Hearing, February 28, 2007
Lael Brainard, Vice President and Director, Global Economy and Development
http://www.brook.edu/views/testimony/brainard20070228.htm
[excerpt]
Mr. Chairman, Members of the Committee, thank you for the opportunity to testify before your committee. Your focus on income fluctuations is all too real for many American middle class families today and is likely to be a reality for many more in coming years. It is worth spending a minute on some of the likely economic drivers before turning to one of the promising policy responses.
A New Wave of Globalization
A new wave of globalization has reached our shores. Although the individual elements feel familiar, the combined contours are unprecedented in scope, speed and scale.
Because China is successfully pursuing at a scale never seen before a growth strategy that is export-led and foreign direct investment fed, its rise is sending waves to the farthest reaches of the global economy. China is already deeply embedded in global manufacturing supply chains, confronting higher wage producers with the difficult choice of moving up the value chain or lowering costs.
India's concurrent economic emergence has complicated the challenge. While India is pursuing a growth strategy more reliant on domestic consumption and investment than China, nonetheless its success in exporting higher skilled "knowledge" services such as software programming has expanded the scope of globalization. Many Americans in white collar occupations are confronting the reality of low wage foreign competition for the first time.
The current episode of global integration dwarfs previous expansions: the entry of India and China into the global labor force amounts to an expansion of roughly 70 percent concentrated at the lower end of the wage scale. Textbook economics would predict a squeeze on wage earners until capital and technology investments adjust. Indeed, the data suggests inequality is once again on the rise in many of the world's richer economies.
In the United States, profits are capturing a larger share of income and wages a lower share than at any time in the last 50 years. Moreover, economists David Autor, Larry Katz, and Melissa Kearney have pointed out that the gap between the middle and top of the U.S. wage distribution (between the 90th and 50th percentile) appears to be widening today, in contrast to earlier decades, where the focus was on the gap between the bottom and middle (between the 50th and 10th percentiles).
A Weak Safety Net
In the face of accelerated job losses in manufacturing and white-collar offshoring in services, an ever-broader pool of American workers is finding that the nation's safety net has more holes than netting.
AND MUCH MORE....
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Brookings Institution
The Case for Wage Insurance
Joint Economic Committee Hearing, February 28, 2007
Lael Brainard, Vice President and Director, Global Economy and Development
http://www.brook.edu/views/testimony/brainard20070228.htm
[excerpt]
Mr. Chairman, Members of the Committee, thank you for the opportunity to testify before your committee. Your focus on income fluctuations is all too real for many American middle class families today and is likely to be a reality for many more in coming years. It is worth spending a minute on some of the likely economic drivers before turning to one of the promising policy responses.
A New Wave of Globalization
A new wave of globalization has reached our shores. Although the individual elements feel familiar, the combined contours are unprecedented in scope, speed and scale.
Because China is successfully pursuing at a scale never seen before a growth strategy that is export-led and foreign direct investment fed, its rise is sending waves to the farthest reaches of the global economy. China is already deeply embedded in global manufacturing supply chains, confronting higher wage producers with the difficult choice of moving up the value chain or lowering costs.
India's concurrent economic emergence has complicated the challenge. While India is pursuing a growth strategy more reliant on domestic consumption and investment than China, nonetheless its success in exporting higher skilled "knowledge" services such as software programming has expanded the scope of globalization. Many Americans in white collar occupations are confronting the reality of low wage foreign competition for the first time.
The current episode of global integration dwarfs previous expansions: the entry of India and China into the global labor force amounts to an expansion of roughly 70 percent concentrated at the lower end of the wage scale. Textbook economics would predict a squeeze on wage earners until capital and technology investments adjust. Indeed, the data suggests inequality is once again on the rise in many of the world's richer economies.
In the United States, profits are capturing a larger share of income and wages a lower share than at any time in the last 50 years. Moreover, economists David Autor, Larry Katz, and Melissa Kearney have pointed out that the gap between the middle and top of the U.S. wage distribution (between the 90th and 50th percentile) appears to be widening today, in contrast to earlier decades, where the focus was on the gap between the bottom and middle (between the 50th and 10th percentiles).
A Weak Safety Net
In the face of accelerated job losses in manufacturing and white-collar offshoring in services, an ever-broader pool of American workers is finding that the nation's safety net has more holes than netting.
AND MUCH MORE....
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 11:03 AM
