via Portside
AFL-CIO Backs Dakota Access Pipeline and the "Family Supporting Jobs" It Provides
Harpers Ferry, WV
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House's Social Security Administration Cuts Would Hurt Customer Service and Program Integrity
// Center on Budget: Comprehensive News Feed
After years of Social Security Administration (SSA) funding cuts, the House Appropriations Committee has proposed yet more damaging cuts to the agency for 2017. As our report explains, SSA's core operating budget shrank by 10 percent from 2010 to 2016, after inflation.
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No Victory Lap Yet: U.S. Wage Growth Elusive
// iMFdirect – The IMF Blog
The U.S. labor market seems to have finally healed. The unemployment rate has been below 5 percent for some time and job growth is steady. And more Americans are coming back to the labor market—in other words, labor participation is increasing. Yet, despite a bump-up in 2015, wage growth so far this year—compared to the 2000s—is still disappointingly low (see Chart 1). This is worrying because consumer spending, which makes up the majority of U.S. economic output, cannot continue at the current pace unless wages grow.
Still a legacy from the Great Recession
Low wages are a vestige of the crisis. Almost eight years after the height of the crisis, laid-off workers continue to re-enter the labor force, which affects average wage growth. This so-called decomposition effect occurs when new employees are hired for less than the average wage rate. When a worker finds a new job after a long unemployment spell, his or her wages tend to be well below that of peers who remained employed. As a result, these new hires bring down the average hourly wage rate—that is, the rate across all workers. In a recently published study, I find that this re-entry effect is substantially larger in the post-Great Recession period than before, as returnees to the labor market have to accept large wage cuts.

Low productivity an increasingly important factor
The next question is whether wages among steadily employed workers are growing at a healthy clip.
The results are not so surprising: wage growth for a broad segment of workers is also lower than a decade ago. For instance, wages of so-called job stayers—the vast majority of U.S. workers who remain at the same job—have risen 3.5 percent this year, a full percentage point lower than before the Great Recession. Similarly, earnings in the middle of the wage distribution—the 50th percentile—are also seeing less gains than in the past: they have risen by 3.2 this year compared to 4.1 percent during 2000–07. The same is true for workers in services and other sectors. And while it is often said that slow wage growth is due to a rising share of low-paying jobs, the data do not support it: the number of low-wage jobs has grown but not nearly fast enough to make a substantial dent in average wage growth. A likely reason for slow wage growth is declining productivity of workers. The more productive workers are, the more they earn.
Less wage growth from less worker mobility
New research shows that labor mobility—the grease that has oiled the U.S. productivity machinery—has slowed. For more than two decades, workers have transitioned less and less frequently between firms or across sectors. This decline in labor market fluidity, a term publicized by a 2014 study, has weakened a traditional source of wage growth: the climb up the wage ladder by changing jobs.
In my study, I show that the decline in job changing was substantial—from 20 percent of job changes per year on average in the early 2000s to 12 percent in the last few years. And the decline was widespread: job move rates fell among young as well as older workers, the skilled and low-skilled, and women and men (see Chart 2). These results hold after accounting for lower job security post-2008 and changes in the age and skill composition of the U.S. labor market. In other words, labor reallocates less than in the past.

But are less frequent job changes a bad thing? Maybe, but unlikely. There is little evidence that job searching has become easier and job matching better. Rather, reallocation rates of workers to more productive firms appear to have slowed. Possible reasons are a rise in regulations that have raised the cost of job changing and hiring, technological change that makes skills less transferable, or a rise in social distrust.
So, the case of a resounding wage recovery being just around the corner is not a strong one. For this reason, policies that help raise wages by increasing productivity are paramount. In the United States there is a strong policy case for increasing infrastructure investment to help businesses become more productive, but also a need to expand partnerships between industry and higher education institutions, more vocational training, and apprenticeship programs.
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Raising rates, even a little, will slow the economy and slow progress in reducing unemployment
// Economic Policy Institute Blog
This week the Federal Open Market Committee (FOMC) will meet to decide whether or not to raise interest rates. By now this is a familiar debate. Some (call them hawks) argue that rate hikes are needed to slow the pace of economic growth and slow progress in reducing unemployment in the name of combating potential inflation. Others (call them doves) argue that we should not tighten until we're absolutely sure that genuine full employment has been locked in. The past years' evidence argues strongly that the doves are right.
Let's start with the Fed's own projections, which some Fed officials recently pointed to during a meeting with the Fed Up coalition to claim that interest rate increases were not meant to slow the economy or raise unemployment.
The table below shows the Fed's current projections for the unemployment rate and other variables. They forecast that it will move from today's 4.9 percent to 4.7 percent in the last three months of this year, and then fall further, to 4.6 percent for 2017 and 2018. After this it rises (after some unspecified time) to its long-run equilibrium of 4.8 percent. This 4.8 percent long-run rate is essentially the Fed's estimate of the "natural rate of unemployment"—the lowest rate the economy can stay at without sparking an acceleration of inflation (this acceleration terminology is key: it's not just inflation rising from 1.5 percent to 2.5 percent, it's inflation that rises from 1.5 percent to 2.5 percent to 3.5 percent to 4.5 percent and so on). Importantly, in the Fed's forecast, the unemployment rate falls over the next three years even as the projected federal funds rate is moved steadily up. By 2018, the 4.6 percent unemployment coincides with a 2.4 percent federal funds rate (it is just 0.25 percent today).
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David Held and Pietro Maffettone introduce the themes in their new edited volume 'Global Political Theory'.
It is literally impossible to shy away from global political theory. Pick-up your cell phone: where do the minerals that make-up its circuits come from? Are the revenues generated by the sale of such minerals used to benefit the people of the country in which the minerals were extracted? Take a look at any piece of clothing in your wardrobe. Where was it made? What were the working conditions of the people making it? Were these conditions the reason for jobs being outsourced to that country, and income and employment lost in yours? Or vice versa? Switch on the news. There is a new scandal about corporations evading or avoiding taxes just about every month. Lists of rich individuals hiding their wealth in fiscal 'heavens' are leaked almost as frequently. Are these the inevitable implications of the free mobility of capital? If capital cannot be effectively taxed, because of tax competition between different countries or commitments to particular types of fiscal policy, does not labour pay the price? We could go on. The point is simple: globalization has made our lives more interconnected than ever. Our daily lives stand for uninterrupted chains of physical, economic, political and ultimately moral relationships with strangers on all parts of the globe. It is imperative to stand back and reflect more analytically about these issues, if we are to be able to understand and act upon them in an informed and reflective manner.
The links between globalization and global political theory are clearly mediated by cultural, political and intellectual trends that defy a mechanical or formulaic reconstruction. To name just a few: the end of the Cold War, the emergence of the human rights regime and of the responsibility to protect doctrine, and the spread of democratic ideas, etc. While globalization has profoundly affected our political lives, it has had a significant impact on how we think about moral issues. There are at least four ways in which globalization has altered normative debates.
First, globalization has intensified global and regional patterns of exchange (political, economic, cultural) and thus has made us aware that our actions have implications that do not stop at our own borders, but have wider and more far-reaching effects.
Second, globalization has accelerated the emergence of global collective action problems. Yet, it has also contributed to a new sense of urgency about establishing global cooperation to address them. It is appreciated that to do nothing about financial market risks, terrorism in the Middle East or climate change, among many other global challenges, is to encourage enormous instabilities and to invite lasting damage to the fabric of our institutions. There has been the realization that our overlapping collective fortunes require collective solutions – locally, nationally, regionally and globally. And there has also been a widespread acceptance that some of these challenges, if unaddressed, could be apocalyptic in the decades to come.
Taken together, the first and second elements relate to the traditional Rawlsian idea that cooperative activities generate benefits, and burdens and that these burdens and benefits have to be distributed in a nonarbitrary fashion if we want to avoid injustice and unfairness. In a similar way, drawing from a broadly democratic perspective, the first and second elements highlight the great array of issue areas in which power is exercised without clear accountability mechanisms, and the associated potential for political and economic domination that unaccountable power inevitably generates.
Third, globalization has increased our awareness of distant suffering. This may seem like a trivial point, but it should not be underestimated. From a purely causal perspective, awareness of a given situation is a necessary condition of our ability to do something about it. But there is more to it than the latter idea suggests. Awareness of suffering, especially through the kind of visual awareness that modern telecommunication technologies allow, can play an important part in the development of empathy and, paraphrasing Peter Singer, in expanding the 'moral circle'. Empathy, as many authors in the history of philosophy have argued, is not to be disparaged – it can motivate people to act and, in so doing, become the starting point for real political change.
Fourth, globalization has also made us aware of the fact that we can do something about the plight of those who live very far from us. How much we can do for 'distant strangers' is of course a matter of great controversy. Witness the endless debates on the effectiveness of humanitarian and development aid. However, most would accept that our role should not be limited to that of spectators, and that passivity in the face of the suffering of distant others is unacceptable.
Put differently, our ability to affect the life prospects of distant individuals (limited as it might realistically be), shapes our reflections about the nature of our ethical universe, as it implies that our relationship with distant strangers can be a source of genuinely normative obligations, that is, obligations that specify a set of actions and policies that we may realistically try to implement.
Of course, much more can be said about the general links between globalization and normative political theory. However, one thing is overwhelmingly clear: given the sheer complexity of the issues we face and the increased moral urgency that so many of them engender, we simply cannot afford not to think about them. And that is precisely the task that we have set ourselves in Global Political Theory (Cambridge: Polity Press, just published). This book discusses the many ways in which global politics permeates our moral lives, sets out the core concepts we need to make sense of this world, and analyses many of the key political and moral challenges we face in order to both understand and address them . It is a very useful starting point to come to terms with a different political world and the moral challenges that it creates.
David Held is a General Editor of Global Policy and Master of University College, Durham. Pietro Maffettone is a Lecturer in Global Politics and Ethics in the School of Government and International Affairs, Durham University.