Immigration: the wrong battle

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Immigration: the wrong battle // Stumbling and Mumbling
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2018/03/immigration-the-wrong-battle.html

Jeremy Corbyn is being criticized for claiming that immigration cuts wages. I suspect his critics are right, if not quite for the reasons some of them might think.

Corbyn said he wanted to

prevent] employers being able to import cheap agency labour to undercut existing pay and conditions in the name of free market orthodoxy.

One can read this not as a call for immigration controls but for restrictions on employment agencies.

Such a reading, however, doesn't exonerate Corbyn.

For one thing, social pressure and market forces have already reined in bad agencies. Transline – the supplier of labour to Amazon and Sports Direct memorably described by James Bloodworth in Hired – lost those contracts and went into administration last year.

And for another, he must have known that statement would be read as a claim about immigration.

And it's here that he's wrong.

It is the case that immigration does reduce the wages of some unskilled workers. But the effect is puny. As Jonathan Portes has said:

Immigration may have some, small, negative impact on wages for some low-paid workers.  But the idea that immigration is the main or even a moderately important driver of low pay is simply not supported by the available evidence.

And this small downwards pressure on the lower end of wages is offset by upward effects upon higher wages. Net, immigration is not bad for the economy.

Now, Corbyn's centrist critics will stop here. But they shouldn't. It's here that my complaint with him begins.

In one sense, politicians are like generals; one of their great skills is to choose the terrain on which to fight their battles. And in these words, Corbyn is shifting the battle to the wrong field. He is, in Gramsci's words, taking a wrong move in the war of position.

What he should be doing is to argue that wages are being depressed not by immigration but by fiscal austerity and by dysfunctional capitalism: stagnant productivity; financialization (pdf), power-biased technical change; deunionization and so on*.

Even the slightest talk of immigration shifts the agenda against this. It moves the political battle onto the terrain that capitalists and Tories want it to be on. They want to distract us from the failures and injustices of austerity and (neoliberal?) capitalism by scapegoating immigrants.

The more we talk about immigration, the less we talk about capitalism. Labour cannot win a battle on this terrain. Once you concede that immigration depresses wages, you are allowing the right to offer tougher and more credible policies to combat it than you can. And you are distracting people from the real reasons why wages are low - reasons that Labour has some policies to combat.

Labour's attitude to immigration should be much the same as its attitude to government borrowing: it should be silent about it because it doesn't matter. In fairness to Corbyn, one of his great achievements in last year's general election was to do just this.  

The right, of course, already has a massive advantage in choosing the terrain; the right-wing press sets the agenda and the BBC follows. Labour therefore needs to be very careful not to add to this advantage. In this sense, Corbyn has failed.

* I'm not saying Corbyn should use these exact words. Another of the great skills of a successful politician is to translate technical economic language into words that resonate more with people.


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Addressing the Dark Side of the Crypto World

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Addressing the Dark Side of the Crypto World // IMF Blog
https://blogs.imf.org/2018/03/13/addressing-the-dark-side-of-the-crypto-world/

By Christine Lagarde

March 13, 2018

Versions in  عربي (Arabic),  中文 (Chinese), Français (French), 日本語 (Japanese), Português (Portuguese), Русский (Russian)

The same reason crypto-assets like Bitcoin are so appealing is also what makes them dangerous (iStock by GettyImages).

Whether Bitcoin's value goes up or Bitcoin's value goes down, people around the world are asking the same question: What exactly is the potential of crypto-assets?

The technology behind these assets—including blockchain—is an exciting advancement that could help revolutionize fields beyond finance. It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries.

The possible benefits have even led some central banks to consider the idea of issuing central bank digital currencies.

Before we get there, however, we should take a step back and understand the peril that comes along with the promise.

The peril of crypto-assets

The same reason crypto-assets—or what some people call crypto-currencies—are so appealing is also what makes them dangerous. These digital offerings are typically built in a decentralized way and without the need for a central bank. This gives crypto-asset transactions an element of anonymity, much like cash transactions.

The result is a potentially major new vehicle for money laundering and the financing of terrorism.

One recent example reveals the scope of the problem.

In July 2017, an international operation led by the United States shut down AlphaBay, the largest online criminal marketplace on the internet. For more than two years, illegal drugs, hacking tools, firearms, and toxic chemicals were sold all over the world through AlphaBay. Before the site was taken offline, more than $1 billion had been exchanged through crypto-assets.

Of course, money laundering and terrorist financing is only one dimension of the threat. Financial stability is another. The rapid growth of crypto-assets, the extreme volatility in their traded prices, and their ill-defined connections to the traditional financial world could easily create new vulnerabilities.    

So, we need to develop regulatory frameworks to meet an evolving challenge. Many organizations have already started.

One positive example is the Financial Stability Board (FSB), which is looking at what new rules might be needed to meet the advancements in fintech. Another is the Financial Action Task Force (FATF)—the body that sets standards for the fight against money laundering and terrorist financing. The task force has already provided useful guidance to countries on how to deal with cryptocurrencies and other electronic assets.

The IMF is also working on these issues. Stopping money laundering and combatting terrorist financing has been part of our work for the last 20 years. Based on the standards set by FATF, we have conducted 65 assessments of countries' regulatory frameworks and provided capacity development assistance to 120 countries. Our efforts have focused on helping our member countries grapple with the specter of illicit financial flows.

But we recognize more needs to be done to get a handle on the emerging threat posed by crypto-assets and to secure a stable financial system. Where can we start?

Fighting fire with fire

We can begin by focusing on policies that ensure financial integrity and protect consumers in the crypto world just as we have for the traditional financial sector.

Indeed, the same innovations that power crypto-assets can also help us regulate them. 

To put it another way, we can fight fire with fire.

Regulatory technology and supervisory technology can help shut criminals out of the crypto world.  More broadly, we are seeing crypto-asset exchanges in some countries that are subject to know-your-customer requirements.

These advances will take years to refine and implement. Two examples highlight the promise of this approach over the long term:

Distributed ledger technology (DLT) can be used to speed up information-sharing between market participants and regulators. Those who have a shared interest in maintaining safe online transactions need to be able to communicate seamlessly. The technology that enables instant global transactions could be used to create registries of standard, verified, customer information along with digital signatures. Better use of data by governments can also help free up resources for priority needs and reduce tax evasion, including evasion related to cross-border transactions.Biometrics, artificial intelligence, and cryptography can enhance digital security and identify suspicious transactions in close to real time. This would give law enforcement a leg up in acting fast to stop illegal transactions. This is one way to help us remove the "pollution" from the crypto-assets ecosystem.

We also need to ensure that the same rules apply to protect consumers in both digital and non-digital transactions. The U.S. Securities and Exchange Commission and other regulators around the world now apply the same laws to some initial coin offerings (ICOs) as they do to offerings of standard securities. This helps to increase transparency and alert buyers to potential risks.

But no country can handle this challenge alone.

Indispensable international cooperation

To be truly effective, all these efforts require close international cooperation. Since crypto-assets know no borders, the framework to regulate them must be global as well.

The successful closure of AlphaBay, for example, involved the cooperation of Europol and law enforcement agencies in the United States, Thailand, the Netherlands, Lithuania, Canada, the United Kingdom, and France.

Countries will have to decide collectively that this path is worth pursuing. Promisingly, the Group of Twenty (G-20) has agreed to put crypto-assets on the agenda of its November 2018 summit in Argentina.

The IMF will play its part in this effort. With our near-universal membership and expertise, including in battling money-laundering and terrorist financing, we are uniquely situated to be a forum for helping develop answers in the evolving crypto-asset space.

What comes next for crypto

The volatility of crypto-assets has prompted an intense debate about whether they are a bubble, just another fad, or a revolution equivalent to the advent of the internet that will disrupt the financial sector and eventually replace fiat currencies.

The truth is obviously somewhere in between these extremes.

As I have said before, it would not be wise to dismiss crypto-assets; we must welcome their potential but also recognize their risks.

By working together, and leveraging technology for the public good, we can harness the potential of crypto-assets while ensuring that they never become a haven for illegal activity or a source of financial vulnerability.

Other readables:
Central Banking and Fintech—A Brave New World?
Fintech and the IMF

Recent IMFBlogs:

Fintech—A Brave New World for the Financial Sector?

Virtual Currencies: The Public Impact of Private Money
Fintech: Capturing the Benefits, Avoiding the Risks
Democratizing the Money Market
Banking On the Go

Stepping up the Fight Against Money Laundering and Terrorist Financing

 


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Motherhood penalties in the U.S., 1986-2014

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Motherhood penalties in the U.S., 1986-2014 // Equitablog – Equitable Growth
http://equitablegrowth.org/working-papers/motherhood-penalties/



Download File

0313018-WP-motherhood-penalties

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Authors:

Eunjung Jee, PhD Candidate, University of Massachusetts, Amherst
Joya Misra, Professor of Sociology, University of Massachusetts, Amherst
Marta Murray-Close, Research Economist, U.S. Census Bureau

Abstract:

Previous research has found that mothers earn less than childless women; this parenthood effect helps explain gender inequality as well. Although U.S. women's educational levels and engagement in the labor market have changed over the last several decades, most studies do not analyze variation in the motherhood penalty over time. We know surprisingly little about how the labormarket status of mothers has evolved or whether the role of motherhood in shaping labor-market outcomes for women has changed over the last few decades. This paper uses data from the U.S. Panel Study of Income Dynamics (PSID), one of the only nationally representative datasets that contains a measure of actual labor-market experience, to examine the evolution of the motherhood penalty in recent years. We estimate the wage gap between mothers and childless women for three time periods: 1986-95, 1996-2004, and 2006-14. We find that the motherhood penalty remains quite stable over time, and may have worsened for mothers with one child. While the gross gap in pay between childless women and mothers of two or more children has narrowed, it has only done so because mothers' have increased their investments in human capital, such as education and workforce experience. Differential selection into motherhood does not explain these findings, as fixed effects models provide similar results. Our findings may thus confirm that changes mothers can make – in their human capital investment, as well as in their employment patterns – may not be enough to create real change. Policies aimed at supporting mothers' employment may be a necessary next step, if we hope to lower the motherhood wage penalty in the United States.

Source


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Links for 02-12-18

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Links for 02-12-18 // Economist's View
http://economistsview.typepad.com/economistsview/2018/02/links-for-02-12-18.html

How Big a Bang for Trump's Buck? (Wonkish) - Paul Krugman Kaldor and Piketty's facts: The rise of monopoly power - Equitable GrowthThe rise of market power explains macroeconomic puzzles - Equitable Growth Economics and politics of monetary policymaking: A new eBook - VoxEU Weber's proof of Gittins Index Theorem - The Leisure of the Theory Class Metrics Monday: Causal Inference with Observational Data - Marc Bellemare Does More "Skin in the Game" Mitigate Bank Risk-Taking? - Liberty Street The Impact of Tax Arbitrage on the U.S. Balance of Payments - Brad Setser A Multicointegration Model of Global Climate Change - Stochastic Trend Understanding Bank Capital: A Primer - Cecchetti & Schoenholtz Notes on European Recovery (Wonkish) - Paul Krugman Nobody Knows Anything - Economic Principals Global trade and the dollar - VoxEU Economic Goodness-of-Fit - Dave Giles
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Trump hates California

https://www.bloomberg.com/news/articles/2018-03-13/chips-tech-wounded-by-trump-reshuffle-blocked-broadcom-deal

Preemption laws prevent cities from acting on everything from labor and employment to gun safety

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Preemption laws prevent cities from acting on everything from labor and employment to gun safety // Blog | Economic Policy Institute
https://www.epi.org/blog/preemption-laws-prevent-cities-from-acting-on-everything-from-labor-and-employment-to-gun-safety/

On Valentine's Day, a 19 year-old with a legally purchased AR-15 assault rifle stormed into Marjory Stoneman Douglas High School in Parkland, Florida and murdered 14 students, and 3 educators. In Florida, an AR-15 military-style assault rifle is easier to buy than a handgun. Understandably, many of the students who survived the mass shooting and the families of the 17 victims have called for a change in the law, arguing that it shouldn't be so easy to legally purchase weapons that powerful. I write here not to weigh in on the merits of any given gun law, but to comment on the process of advocating for legislative change, and the challenges at the local level with the preemption laws on the books.

In terms of advocating for a change in federal law, Congress's ban on AR-15s and other semiautomatic assault weapons expired in 2004, and federal lawmakers have not been able to pass a similar ban since.

In terms of advocating for change in state law, dozens of Florida high school students recently loaded onto buses and drove to the Florida state capital to lobby for a bill banning assault rifles, which was voted down by the state's House of Representatives.

In terms of advocating for a change in gun laws at the city and county level, the students, families of the victims, or anyone else won't even have a chance because of Florida's preemption law. "Preemption" in this context refers to a situation in which a state law is enacted to block a local ordinance from taking effect—or dismantle an existing ordinance.

Florida's 2011 amendment to its gun preemption law is unique: Not only does it prohibit local governments from regulating guns, it allows punitive measures against local elected officials for even trying. In Florida, local elected officials on city councils or other municipal bodies are subject to personal civil penalties of up to $5,000, can be sued and held personally liable for damages of up to $100,000, and even removed from office at the discretion of the governor. And, the preemption law requires elected officials to pay their own attorney's fees if they are sued.

In 2017, for example, Tallahassee Mayor Andrew Gillum was sued personally by gun advocates while he was still a city commissioner after he cast a symbolic vote against repealing a local ordinance that banned shooting firearms in the city's public parks (his vote was only symbolic because Florida's preemption law had already nullified the ordinance years before). His legal defense costs for simply casting a vote totaled $200,000, but he was able to find attorneys to do the work pro bono.

Arizona's punitive gun preemption law requires the county, city or town to "post a bond equal to the amount of state shared revenue" whenever the state attorney general files suit against the local government for an alleged violation of Arizona's gun preemption law. In 2017, the city of Tucson nearly ground to a fiscal halt when the state attorney general sued the city for its practice of destroying unclaimed or forfeited firearms. As required by the preemption law, the city's bond amount would have totaled $55,639,999.37, and the city stated in court that it "could not post a bond at or near that amount as it would exceed the sum total of the city's available reserves by nearly $5 million." The state declined to enforce the bond requirement in this case, but required the city to resell the unclaimed firearms instead of destroying them.

Of course, it's not just gun laws. State governments have begun blocking local government efforts to give workers the opportunity to earn paid sick days or raise wages through the use of preemption laws.

Pay for the vast majority of America's workers has been stagnant for decades. One of the simplest ways to accelerate wage growth for low- and moderate-wage workers is to raise minimum wages. In 2015, for example, the citizens of St. Louis tried to address what, in the city government's own words were, the city's problems of "rising income inequality" and "the obstacles preventing people from rising into the middle class" by raising the minimum wage.

In terms of advocating for a federal change, Congress last raised the minimum wage in 2009 to $7.25, and hasn't raised it since.

In terms of advocating for state law to change, Missouri's minimum wage was last changed in 2006 and has barely budged to just $7.85 (and it's rising slowly only because of an automatic index to rise with inflation).

In terms of advocating for change at the local level, the residents of St. Louis were able to make a change—for a little while. By passing its local ordinance in 2015, St. Louis sought to raise the minimum wage to $8.25 for many employees working within the city limits, with scheduled increases to $9 in 2016, $10 on January 1, 2017, and $11 on January 1, 2018.

But the City of St. Louis's victory was short-lived, because in 2017 the Missouri state legislature passed a minimum wage preemption law that nullified the local ordinance, lowering the St. Louis minimum wage from $10 back down to the state's minimum of less than $8 per hour, undercutting wages for at least 38,000 workers.

With inaction on raising working standards at the federal and state levels, many advocates turn to their local governments to address the needs of workers within the city limits. But these preemption laws are lowering labor standards at the local level, and certainly do not help improve the standard of living for the people living in our towns, cities, and counties who are trying to change their circumstances for the better.


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The Washington Post: This Trump fan would like to ‘buy American.’ So why doesn’t he?

This Trump fan would like to 'buy American.' So why doesn't he?
http://wapo.st/2Ilh8eR