declining real wages

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pages: 399 words: 116,828

When Work Disappears: The World of the New Urban Poor by William Julius Wilson

affirmative action, business cycle, citizen journalism, collective bargaining, conceptual framework, declining real wages, deindustrialization, deliberate practice, desegregation, Donald Trump, edge city, ending welfare as we know it, fixed income, full employment, George Gilder, ghettoisation, glass ceiling, Gunnar Myrdal, income inequality, informal economy, jobless men, labor-force participation, longitudinal study, low skilled workers, low-wage service sector, manufacturing employment, mass immigration, new economy, New Urbanism, pink-collar, race to the bottom, RAND corporation, school choice, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, upwardly mobile, urban decay, urban renewal, War on Poverty, working poor, working-age population, Works Progress Administration

The foundation of this vision emphasizes issues and programs that concern the families of all racial and ethnic groups so that individuals in these groups will come to see their mutual interests and join in a multiracial coalition to move America forward; it promotes the idea that Americans have common interests and concerns that cross racial and class boundaries—such as unemployment and job security, declining real wages, escalating medical and housing costs, the scarcity of quality child care programs, the sharp decline in the quality of public education, and the toll of crime and drug trafficking in all neighborhoods. This vision encourages Americans to see that the application of programs to combat these problems would benefit everyone, not just the truly disadvantaged; to recognize that the division between the suburbs and the central city is partly a racial one and that it is vitally important to emphasize city-suburban cooperation, not separation; and, finally, to endorse the idea that all groups, including those in the throes of ghetto joblessness, should be able to achieve full membership in society because the problems of economic and social marginality spring from the inequities in society at large and not from group deficiencies.

Between 1989 and 1993, jobs held by women increased by 1.3 million, while those held by men barely rose at all (by roughly 100,000). Although the wages of low-skilled women (those with less than twelve years of education) rose slightly in the 1970s, they flattened out in the 1980s, and continued to remain below those of low-skilled men. The wage gap between low-skilled men and women shrank not because of gains made by female workers but mainly because of the decline in real wages for men. The unemployment rates among low-skilled women are slightly lower than those among their male counterparts. However, over the past decade their rates of participation in the labor force have stagnated and have fallen further behind the labor-force-participation rates among more highly educated women, which continue to rise. The unemployment rates among both low-skilled men and women are five times that among their college-educated counterparts.

Ghetto neighborhoods were as highly segregated as they are now, but people were working. The disappearance of work in many inner-city neighborhoods is in part related to the nationwide decline in the fortunes of low-skilled workers. Fundamental structural changes in the new global economy, including changes in the distribution of jobs and in the level of education required to obtain employment, resulted in the simultaneous occurrence of increasing joblessness and declining real wages for low-skilled workers. The decline of the mass production system, the decreasing availability of lower-skilled blue-collar jobs, and the growing importance of training and education in the higher-growth industries adversely affected the employment rates and earnings of low-skilled black workers, many of whom are concentrated in inner-city ghettos. The growing suburbanization of jobs has aggravated the employment woes of poor inner-city workers.


pages: 56 words: 17,340

Media Control: The Spectacular Achievements of Propaganda by Noam Chomsky

British Empire, declining real wages, feminist movement, Howard Zinn, Ralph Nader, RAND corporation, Ronald Reagan, strikebreaker

If you look at the domestic programs of the administrations of the past ten years-I include here the Democratic opposition-there's really no serious proposal about what to do about the severe problems of health, education, homelessness, joblessness, crime, soaring criminal populations, jails, deterioration in the inner citiesthe whole raft of problems. You all know about them, and they're all getting worse. Just in the two years that George Bush has been in office three million more children crossed the poverty line, the debt is zooming, educational standards are declining, real wages are now back to the level of about the late 1950s for much of the population, and nobody's doing anything about it. In such circumstances you've got to divert the bewildered herd, because if they start noticing this they may not like it, since they're the ones suffering from it. Just having them watch the Superbowl and the sitcoms may not be enough. You have to whip them up into fear of enemies.


Profit Over People: Neoliberalism and Global Order by Noam Chomsky

Bernie Sanders, Bretton Woods, declining real wages, deindustrialization, full employment, invisible hand, joint-stock company, land reform, liberal capitalism, manufacturing employment, means of production, Monroe Doctrine, Ronald Reagan, strikebreaker, structural adjustment programs, Telecommunications Act of 1996, The Wealth of Nations by Adam Smith, Thomas Malthus, union organizing, Washington Consensus

In an important recent study he points out that there is no doubt that the third world’s compulsory economic liberalism in the nineteenth century is a major element in explaining the delay in its industrialization” and in the very revealing case of India, the “process of de-industrialization” that converted the industrial workshop and trading center of the world to a deeply impoverished agricultural society suffering a sharp decline in real wages, food consumption, and availability of other simple commodities. “India was only the first major casualty in a very long list,” Bairoch observes, including “even politically independent third world countries [that] were forced to open their markets to Western products.” Meanwhile Western societies protected themselves from market discipline, and developed. VARIETIES OF NEOLIBERAL DOCTRINE That brings us to another important feature of modern history.

Nixon’s moves were among several factors that led to a huge increase in unregulated financial capital and a radical shift in its use, from long-term investment and trade to speculation. The effect has been to undermine national economic planning as governments are compelled to preserve market “credibility,” driving any economies “toward a low-growth, high-unemployment equilibrium,” Cambridge University economists John Eatwell comments, with stagnating or declining real wages, increasing poverty and inequality, and booming markets and profits for the few. The parallel process of internationalization of production provides new weapons to undermine working people in the West, who must accept an end to their “luxurious” lifestyle and agree to “flexibility of labor markets” (not knowing whether you have a job tomorrow), the business press orates happily. The return of most of Eastern Europe to its third world origins enhances these prospects considerably.


pages: 586 words: 159,901

Wall Street: How It Works And for Whom by Doug Henwood

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, affirmative action, Andrei Shleifer, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, business cycle, capital asset pricing model, capital controls, central bank independence, computerized trading, corporate governance, corporate raider, correlation coefficient, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, dematerialisation, diversification, diversified portfolio, Donald Trump, equity premium, Eugene Fama: efficient market hypothesis, experimental subject, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, George Gilder, hiring and firing, Hyman Minsky, implied volatility, index arbitrage, index fund, information asymmetry, interest rate swap, Internet Archive, invisible hand, Irwin Jacobs, Isaac Newton, joint-stock company, Joseph Schumpeter, kremlinology, labor-force participation, late capitalism, law of one price, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, London Interbank Offered Rate, Louis Bachelier, market bubble, Mexican peso crisis / tequila crisis, microcredit, minimum wage unemployment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, oil shock, Paul Samuelson, payday loans, pension reform, plutocrats, Plutocrats, price mechanism, price stability, prisoner's dilemma, profit maximization, publication bias, Ralph Nader, random walk, reserve currency, Richard Thaler, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, selection bias, shareholder value, short selling, Slavoj Žižek, South Sea Bubble, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, transcontinental railway, women in the workforce, yield curve, zero-coupon bond

The median assets of all families having assets was $13,100 — compared to a median of $17,600 in debts, for the three-quarters of all households carrying debts.^ Back in the 1980s, you used to read about the rising debt burden on households; for some reason, you don't read about it much in the 1990s anymore, even though the burden has continued to grow. You do still read about the concentration of wealth. The two phenomena are rarely seen as linked. But because of the decline in real hourly wages, and the stagnation in household incomes, the middle and lower classes have borrowed more to stay in place; they've borrowed from the very rich who PLAYERS have gotten richer. The rich need a place to earn interest on their surplus funds, and the rest of the population makes a juicy lending target. Just how this works out can be seen in data from the 1983 survey, unfortunately, the Fed didn't publish the 1995 survey data in sufficient detail.

(Connoisseurs sometimes view revisions as a clue to an underlying trend; upward revisions suggest a strong underlying trend, and one that official numbers may be underestimating; downward revisions suggest the reverse. Not that there's any serious evidence this is the case, though.) Bond prices instantly fell WALL STREET over a full point, a moderately dramatic move, ignoring news elsewhere in the statistical release showing that average hourly earnings grew only three cents, to $11.06 — an annual rate of just over 3%, in line with inflation. For U.S. workers, who've experienced 20 years of declining real hourly wages, even this strong employment growth has been unable to deliver any wage improvement. To Wall Street eyes, however, that's good news: "wage inflation" is under control for now. There's nothing the bond ghouls hate more than real wage increases for anyone but themselves. Despite that wage sluggishness, and the good behavior of the general price indexes, the consensus is that the Fed will tighten again before long.

Deeper into the story, the author Keith Bradsher notes that this shift "could be unpopular with liberal Democrats.. .[blut it is in keeping with Mr. Clinton's political goal of positioning himself as a Democrat who is not feared on Wall Street." Growth must be throttled back to no more than 2.5%, or maybe 3% tops — below levels that might make possible sharper reductions in unemployment, strengthen labor's bargaining position, and maybe even reverse, however temporarily, the 20-year decline in real wages. This story may be a plant, an attempt to calm the markets through leaking; Bradsher is a reporter who has had no trouble serving as a frictionless conduit for administration or Fed propaganda. But it does fit with events; challenging the Wall Street demand for slower growth would be political dynamite — just the kind of fight a not-feared-on-Wall-Street Democrat would shy away from. The bond-market vigilantes have won.


Year 501 by Noam Chomsky

"Robert Solow", anti-communist, Bartolomé de las Casas, Berlin Wall, Bolshevik threat, Bretton Woods, British Empire, business cycle, capital controls, colonial rule, corporate governance, cuban missile crisis, declining real wages, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, European colonialism, experimental subject, Fall of the Berlin Wall, Howard Zinn, invisible hand, land reform, land tenure, long peace, mass incarceration, means of production, Monroe Doctrine, non-tariff barriers, offshore financial centre, plutocrats, Plutocrats, price stability, Ralph Nader, Ralph Waldo Emerson, RAND corporation, Ronald Reagan, Simon Kuznets, strikebreaker, structural adjustment programs, the scientific method, The Wealth of Nations by Adam Smith, trade liberalization, trickle-down economics, union organizing, War on Poverty, working poor

On July 31, 1992, a top leftist union leader, Ivan Ramírez, was murdered by unidentified gunmen in the style of the death squads. We turn to Nicaragua directly.33 The effects of IMF Fundamentalism, now administered with renewed fervor, “have been catastrophic” in Central America, the Jesuit journal Envío reports. Inflation has increased. Fiscal deficits have not declined as anticipated, but GOP growth has stagnated since 1985 and declined since 1988. Real wages have substantially fallen almost everywhere in Latin America, and the distribution of income is becoming even more skewed than before. “The word ‘development’ has disappeared from Latin America’s economic vocabulary”—though “profit” is on everyone’s lips, for the foreigner and the domestic islands of privilege. The same can only be expected elsewhere. Discussing what lies ahead for India under IMF-designed restructuring, two economics professors at the Bombay Institute of Development Research review the consequences of such programs worldwide, drawing the “unambiguous” conclusion from “economic theory and the recent economic history of developing countries”: the effects are “tremendous hardship for the poor and working people” and “great hardship on the economies of developing nations”; no less unambiguous are the benefits for the privileged sectors and their foreign associates, who call the tune.34 8.

Since the onset of “Menem’s Miracle” in 1989, “Neo-liberal private pillage has set up a system where individual wealth depends on public decay and economic regression,” with some 40 percent of the economically active population unemployed or underemployed, proliferating shanty towns, factories closed and not replaced by new enterprises, exploitation of the state as “an instrument for personal enrichment and private pillage,” reduction of expenditures for health, education and welfare to all time lows, negative growth rates, decreasing yearly rate of investment, and declining real wages. By now, over 60 percent of the 12 million inhabitants of Buenos Aires are not connected to the sewer system, one reason for the return of diseases that had been eradicated decades ago. The “speculative economy, reinforced by a neo-liberal economic policy, which impoverishes most of the population while destroying Argentina’s internal market and productive capacity, and scarce resources has generated a Hobbesian world, a savage struggle to survive while the elite continue to reap windfall profits.”

Just hang in there; all will be well. As usual, we do not learn that the famed “trickle down” policies have, in the past, produced a tiny trickle indeed, though read closely, the current reports indicate why the same can be expected this time around. The indicators look fine from Washington and Europe, Kamm reports, but they conceal rapid concentration of wealth, increased poverty including “critical poverty,” declining real wages, and the other usual concomitants of “miracles.” Former Brazilian President José Sarney writes that “in all countries” of Latin America, the foreign banks and other usual beneficiaries reap their rewards, “and what’s left is unemployment, slave wages, and terrible social indicators.” “The rich continue to get richer, the gap between them and the middle and lower classes widen,” and none of the policies that are so promising “have been able to wipe out poverty” (Nash), a curious and unexpected failure to achieve their goal, we are to understand.42 The most phenomenal success story of all is Chile, with its “prospering free-market economy generated by Gen.


pages: 151 words: 38,153

With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough by Peter Barnes

Alfred Russel Wallace, banks create money, basic income, Buckminster Fuller, collective bargaining, computerized trading, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, diversified portfolio, en.wikipedia.org, Fractional reserve banking, full employment, hydraulic fracturing, income inequality, Jaron Lanier, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land reform, Mark Zuckerberg, Network effects, oil shale / tar sands, Paul Samuelson, profit maximization, quantitative easing, rent-seeking, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, the map is not the territory, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, Upton Sinclair, Vilfredo Pareto, wealth creators, winner-take-all economy

For that we need a reliable nonlabor income flow that supplements labor income. The best way to provide that flow is with dividends from co-owned wealth. Every American would get the dividends wired to his or her bank account or debit card. The amount of the dividends would vary from year to year depending on the income earned during the year. Total dividends would never exceed that income. In an age of declining real wages, shared wealth dividends would be an essential prop for our middle class. But they’d be more than that. Like social insurance, co-owned wealth dividends would connect Americans to each other and across generations. They’d be an affirmation that Americans belong to a society in which joint inheritances and productivity gains benefit everyone. As Lou Dobbs put it, American citizenship would be worth real money.


pages: 147 words: 45,890

Aftershock: The Next Economy and America's Future by Robert B. Reich

Berlin Wall, business cycle, declining real wages, delayed gratification, Doha Development Round, endowment effect, full employment, George Akerlof, Home mortgage interest deduction, Hyman Minsky, illegal immigration, income inequality, invisible hand, job automation, labor-force participation, Long Term Capital Management, loss aversion, mortgage debt, new economy, offshore financial centre, Ralph Nader, Ronald Reagan, school vouchers, sovereign wealth fund, Thorstein Veblen, too big to fail, World Values Survey

His bank rescue and stimulus packages, combined with the Fed’s low interest rates, prevented the Great Recession from turning into another Great Depression. But the nation has not recommitted itself to the basic bargain. The 2010 health reform legislation was a step in the right direction but small in relation to the overall challenge. Consequently, most Americans will continue to experience relatively high unemployment and flat or declining real wages. Economic growth will be hampered. Growth, it should be noted, is not an end in itself. It is a means to better lives for all, generating not only higher incomes and possibilities for more personal consumption but also making room for the consumption of public improvements that benefit all—an atmosphere less polluted by carbon, good schools, better health care. Rapid growth also smoothes the way toward the basic bargain: When the economy is growing nicely, the wealthy more easily accept a smaller share of its gains because they can still come out ahead of where they were before.


pages: 850 words: 254,117

Basic Economics by Thomas Sowell

affirmative action, air freight, airline deregulation, American Legislative Exchange Council, bank run, barriers to entry, big-box store, British Empire, business cycle, clean water, collective bargaining, colonial rule, corporate governance, correlation does not imply causation, cross-subsidies, David Brooks, David Ricardo: comparative advantage, declining real wages, Dissolution of the Soviet Union, diversified portfolio, European colonialism, fixed income, Fractional reserve banking, full employment, global village, Gunnar Myrdal, Hernando de Soto, hiring and firing, housing crisis, income inequality, income per capita, index fund, informal economy, inventory management, invisible hand, John Maynard Keynes: technological unemployment, joint-stock company, Just-in-time delivery, Kenneth Arrow, knowledge economy, labor-force participation, land reform, late fees, low cost airline, low cost carrier, low skilled workers, means of production, Mikhail Gorbachev, minimum wage unemployment, moral hazard, offshore financial centre, oil shale / tar sands, payday loans, price discrimination, price stability, profit motive, quantitative easing, Ralph Nader, rent control, road to serfdom, Ronald Reagan, Silicon Valley, surplus humans, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transcontinental railway, Vanguard fund, War on Poverty

A difference of one percentage point per year, compounded over a period of 25 years, means that in the end the average American income per person is under-estimated by almost $9,000 a year.{546} In other words, at the end of a quarter-century, an American family of three has a real income of more than $25,000 a year higher than the official statistics on real wages would indicate. Alarms in the media and in politics about statistics showing declining real wages over time have often been describing a statistical artifact rather than an actual fact of life. It was during a period of “declining real wages” that the average American’s consumption increased dramatically and the average American’s net worth more than doubled. A further complication in measuring changes in the standard of living is that more of the increase in compensation for work takes the form of job-related benefits, rather than direct wages. Thus, in the United States, total compensation rose during a span of years when there were “declining real wages.” International Comparisons The same problems which apply when comparing a given country’s output over time can also apply when comparing the output of two very different countries at the same time.

A further inflationary bias in the consumer price index or other measures of the cost of living is that many goods which are increasing in price are also increasing in quality, so that the higher prices do not necessarily reflect inflation, as they would if the prices of the same identical goods were rising. The practical—and political—effects of these biases can be seen in such assertions as the claim that the real wages of Americans have been declining for years. Real wages are simply money wages adjusted for the cost of living, as measured by the consumer price index. But if that index is biased upward, then that means that real wage statistics are biased downward. Various economists’ estimates of the upward bias of the consumer price index average about one percentage point or more. That means that when the consumer price index shows 3 percent inflation per year, it is really more like 2 percent inflation per year.


pages: 162 words: 51,473

The Accidental Theorist: And Other Dispatches From the Dismal Science by Paul Krugman

"Robert Solow", Bonfire of the Vanities, Bretton Woods, business cycle, clean water, collective bargaining, computerized trading, corporate raider, declining real wages, floating exchange rates, full employment, George Akerlof, George Gilder, Home mortgage interest deduction, income inequality, indoor plumbing, informal economy, invisible hand, Kenneth Arrow, knowledge economy, life extension, new economy, Nick Leeson, paradox of thrift, Paul Samuelson, plutocrats, Plutocrats, price stability, rent control, Ronald Reagan, Silicon Valley, trade route, very high income, working poor, zero-sum game

The long inflation from 1500 to 1700 is mainly attributed to the flood of silver from Spain’s New World conquests; in the modern world governments can print money instead of mining it, and have done so repeatedly both to pay their bills and, more creditably, in an attempt to trade off higher prices for lower unemployment. Fischer regards such explanations as inadequate. He insists both that inflation is only one symptom of a deeper process—one that also produces growing population, rising inequality, declining real wages, and ultimately a crisis—and that this process is repetitive, that in a qualitative sense all price revolutions are alike. In particular, the travails of the West in recent decades are typical of the end game of a price revolution—and we can take comfort from the fact that such difficult periods are inevitably followed by a prolonged “equilibrium.” This thesis is both fun to contemplate and comforting in its implication that the worst may already be behind us.


pages: 165 words: 48,594

Democracy at Work: A Cure for Capitalism by Richard D. Wolff

asset-backed security, Bernie Madoff, business cycle, collective bargaining, Credit Default Swap, declining real wages, feminist movement, financial intermediation, Howard Zinn, income inequality, John Maynard Keynes: technological unemployment, laissez-faire capitalism, means of production, moral hazard, mortgage debt, Occupy movement, Ponzi scheme, profit maximization, quantitative easing, race to the bottom, Ronald Reagan, too big to fail, trickle-down economics, wage slave, women in the workforce, Works Progress Administration

However, the trickle-down economics program hasn’t worked—and for reasons that are not hard to discern. The government-enhanced wealth at the top does not “trickle down” in the real world. Instead, boards of directors continue to see their self-interest in not sharing the recovery funds poured into their hands. Thus we experience continuing high unemployment, massive numbers of home foreclosures, declining real wages and job benefits, and inaccessibility of credit for personal borrowing. Stagnant consumption and investment are the results. They undermine the recovery of business and the stock markets. The global capitalist crisis deepens. What is to be done? The political and economic establishment simply repeats its usual mainstream mantra: maintain the post-2007 trickle-down program with maximum hype about the government’s efforts to end the crisis and wait until the crisis depresses wages and the costs of doing business enough that profit opportunities prompt capitalists to resume investing.


pages: 234 words: 53,078

The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer by Dean Baker

accounting loophole / creative accounting, affirmative action, Asian financial crisis, Bretton Woods, business cycle, corporate governance, declining real wages, full employment, index fund, Jeff Bezos, medical malpractice, medical residency, money market fund, offshore financial centre, price discrimination, risk tolerance, spread of share-ownership

If the country has a health care system in which costs are contained, the public sector can provide the funds needed to insure those who cannot afford to pay for their own insurance. On the other hand, if costs continue to grow along the path currently projected, it is inevitable that the number of uninsured will rise through time, even if there is an expansion of public sector health care programs. There is one other point about the importance of reversing conservative nanny state policies that redistribute income upward. In a period of stagnant or declining real wages, the public will be very resistant to efforts to raise taxes to support more public services of any type. On the other hand, in a climate of rising wages and general prosperity, there is less objection to diverting a portion of this prosperity towards meeting public needs. This means that if the economy is producing real gains for the bulk of the population, it will be much easier to obtain the revenue needed to address deep-seated social problems.


pages: 196 words: 53,627

Let Them In: The Case for Open Borders by Jason L. Riley

affirmative action, business cycle, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, desegregation, guest worker program, hiring and firing, illegal immigration, immigration reform, income inequality, labor-force participation, longitudinal study, low skilled workers, mass immigration, open borders, RAND corporation, Ronald Reagan, school choice, Silicon Valley, trade liberalization, War on Poverty, working poor, working-age population, zero-sum game

And, more fundamentally, high jobless rates among black natives—and black males especially—has much more to do with their unemployability than the lack of available jobs. Two economists with the Urban Institute, Harry Holzer and the late Paul Offner, found that employment rates for black men between sixteen and twenty-four actually dropped in the 1990s, a decade of strong economic growth and job creation. Among the primary reasons cited for low labor participation rates in this subgroup were declining real wages, a significant skills gap between black and white workers, high black incarceration rates, and the disappearance of manufacturing and other blue-collar jobs in recent decades. Holzer and Offner also reported that “employers perceive a stronger work ethic among immigrants of all racial groups, and a greater willingness to accept and retain low-skill jobs.” A front-page Wall Street Journal story in 2006 provided a useful real-world illustration of the latter point.


pages: 504 words: 143,303

Why We Can't Afford the Rich by Andrew Sayer

accounting loophole / creative accounting, Albert Einstein, anti-globalists, asset-backed security, banking crisis, banks create money, basic income, Boris Johnson, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, collective bargaining, corporate raider, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, declining real wages, deglobalization, deindustrialization, delayed gratification, demand response, don't be evil, Double Irish / Dutch Sandwich, en.wikipedia.org, Etonian, financial innovation, financial intermediation, Fractional reserve banking, full employment, G4S, Goldman Sachs: Vampire Squid, high net worth, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, James Dyson, job automation, Julian Assange, Kickstarter, labour market flexibility, laissez-faire capitalism, land value tax, low skilled workers, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, means of production, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, New Urbanism, Northern Rock, Occupy movement, offshore financial centre, oil shale / tar sands, patent troll, payday loans, Philip Mirowski, plutocrats, Plutocrats, popular capitalism, predatory finance, price stability, pushing on a string, quantitative easing, race to the bottom, rent-seeking, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, Steve Jobs, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, trickle-down economics, universal basic income, unpaid internship, upwardly mobile, Washington Consensus, wealth creators, WikiLeaks, Winter of Discontent, working poor, Yom Kippur War, zero-sum game

One way or another, all but the very youngest members of society are taxpayers. So they are contributing as well as receiving; indeed, many are just getting deferred earned income. Maybe we should call it an entitlement rather than a ‘benefit’, which suggests an act of charity. • Typically, the unemployed are in and out of work as short-term jobs become available, rather than unemployed permanently. And thanks to declining real wages since 2008, the numbers of ‘the working poor’ have risen, substantially exceeding the out-of-work poor.11 • Many are unable to work because of debilitating illnesses or serious impairments. In the UK the current ConDem coalition has waged a shocking campaign against the sick and disabled, attempting to force people who are in no condition to work to find work or face benefit cuts. • Many do important unpaid work caring for others.

‘Welfare’ is now coming to be used in the UK in the American pejorative sense, as something the inadequate are ‘on’, at the expense of the rest of us.150 This is a kind of class war waged by the Right at the level of the meaning of words. But the remarkable thing about the return of the rich is the lack of overt resistance, indeed the strange acceptance of austerity policies for the 90%, even after lower- and middle-income groups have seen years of declining real wages and benefits and erosion of public services. Many of those on low incomes have voted, against their own interests, for parties that protect and further plutocracy, the Tea Party in the US being the most striking example. Whipping up hostility to the poor, to immigrants, refugees and asylum seekers all helps to distract attention from the rich. Research in Britain and the US on attitudes to those at the bottom shows that some of those most hostile to them are themselves at the bottom.151 So support for such parties continues as they blame the welfare state and those supported by it for a crisis very much associated with the return of the rich and their pursuit of ways of extracting wealth.


pages: 205 words: 58,054

Private Government: How Employers Rule Our Lives (And Why We Don't Talk About It) by Elizabeth S. Anderson

Affordable Care Act / Obamacare, barriers to entry, call centre, collective bargaining, corporate governance, correlation does not imply causation, declining real wages, deskilling, feminist movement, Frederick Winslow Taylor, full employment, invisible hand, manufacturing employment, means of production, Panopticon Jeremy Bentham, principal–agent problem, profit motive, Ronald Coase, shareholder value, Socratic dialogue, spinning jenny, The Nature of the Firm, The Wealth of Nations by Adam Smith, trickle-down economics

These masterless men were rather vulnerable wage laborers or vagrants, dependent on individual charity or, increasingly, on public assistance. The most authoritative social historian of early modern England, Keith Wrightson, sees production for the market a risk small households were “constrained to make” rather than an opportunity.10 The changes of the sixteenth and early seventeenth centuries produced poverty on an unprecedented scale, and a rising number of households dependent on wage-labor, during an era of declining real wages. Probably half the population relied mainly on wage labor by the middle of the seventeenth century. The national income of England doubled at least in the century up to 1640, but, as in other periods, the benefits of this expansion were unevenly shared and the results were greater inequality and increased social polarization. It became less and less likely that an apprenticeship to an urban trade was a pathway to a comfortable life as an independent artisan or businessman; many hopeful young men faced a lifetime as journeymen or laborers.


pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

"Robert Solow", Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, Bob Noyce, borderless world, British Empire, business cycle, capital controls, complexity theory, computer age, computerized trading, creative destruction, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, disintermediation, double helix, Douglas Engelbart, Douglas Engelbart, edge city, experimental subject, financial deregulation, financial independence, floating exchange rates, future of work, global village, Gunnar Myrdal, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, Induced demand, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, James Watt: steam engine, job automation, job-hopping, John Markoff, knowledge economy, knowledge worker, labor-force participation, laissez-faire capitalism, Leonard Kleinrock, longitudinal study, low skilled workers, manufacturing employment, Marc Andreessen, Marshall McLuhan, means of production, megacity, Menlo Park, moral panic, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, Pearl River Delta, peer-to-peer, planetary scale, popular capitalism, popular electronics, post-industrial society, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Robert Gordon, Robert Metcalfe, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Ted Nelson, the built environment, the medium is the message, the new new thing, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl, zero-sum game

Increasing global trade and investment do not seem to be, by themselves, major causal factors in eliminating jobs and degrading work conditions in the North, while they contribute to creating millions of jobs in newly industrializing countries. And yet the process of historical transition toward an informational society and a global economy is characterized by the deterioration of living and working conditions for a significant proportion of labor.132 This deterioration takes different forms in different contexts: the rise of unemployment in Europe; declining real wages (at least until 1996), increasing inequality, and job instability in the United States; underemployment and stepped-up segmentation of the labor force in Japan; informalization and downgrading of newly incorporated urban labor in industrializing countries; and increasing marginalization of the agricultural labor force in stagnant, underdeveloped economies. As argued above, these trends do not stem from the structural logic of the informational paradigm, but are the result of the current restructuring of capital–labor relations, helped by the powerful tools provided by new information technologies, and facilitated by a new organizational form, the network enterprise.

Nor is the skill mix the source of increasing income inequality. In his study with Wolff, Howell shows that while the share of low-skilled workers in the US decreased across industries, the share of low-wage workers increased in these same industries. Several studies also suggest that higher skills are in demand, although not in shortage, but higher skills do not necessarily translate into higher wages.137 Thus, in the US, while decline in real wages was more pronounced for the lowest-educated, salaries for the college-educated also stagnated between 1987 and 1993.138 The direct consequence of economic restructuring in the United State s is that in the 1980s and the first half of the 1990s family income plummeted. Wages and living conditions continued to decline until 1996 in spite of a strong economic recovery in 1993.139 Furthermore, half a century after Gunnar Myrdal pointed to the “American Dilemma,” Martin Carnoy, in a powerful book, documented that racial discrimination continues to increase social inequality, contributing to marginalizing a large proportion of America’s ethnic minorities.140 However, in 1996–2000, the sustained boom led by information technology and the new economy changed the trend, and increased average real wages at about 1.2 percent per year.

Indeed, 18.5 percent of households had zero or negative net wealth. Much has been made of the shareholders democracy in the new forms of capitalism, but table 4.29 shows the extreme concentration of stock ownership in 1995, even when we include stock plans, mutual funds, individual retirement accounts, and other instruments of popular capitalism. While America is an extreme case of income inequality and declining real wages among the industrialized nations, its evolution is significant because it does represent the flexible labor market model at which most European nations, and certainly European firms, are aiming.141 And the social consequences of such a trend are similar in Europe. Thus, in Greater London between 1979 and 1991 real disposable income of households in the lowest decile of income distribution declined by 14 percent, and the ratio of real income of the richest decile over the poorest almost doubled in the decade, from 5.6 to 10.2.142 Poverty in the UK substantially increased during the 1980s and early 1990s.143 And for other European countries, taking the incidence of child poverty as an indicator of the evolution of poverty, on the basis of data collected by Esping-Andersen, between 1980 and the mid-1990s child poverty increased by 30 percent in the US, by 145 percent in the UK, by 31 percent in France, and by 120 percent in Germany.144 Inequality and poverty increased during the 1990s in the US, and in most of Europe.145 I take the liberty of referring the reader to volume III, chapter 2, for a summary presentation of data and sources on inequality and poverty, both for the United States and for the world at large.


pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, basic income, Bernie Sanders, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, Gini coefficient, Google bus, high net worth, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, Paul Graham, plutocrats, Plutocrats, RAND corporation, rent control, rent-seeking, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, sovereign wealth fund, superstar cities, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

The widespread perception instead was that New York had become a place where the rich were getting even richer, while the poor and the working and middle classes were falling further and further behind. By 2013, the top 5 percent of Manhattan households were earning eighty-eight times what the poorest 20 percent did. The city’s 400,000 or so millionaires outnumbered the entire populations of New Orleans, Pittsburgh, Cleveland, or Minneapolis. But many more New Yorkers were seeing their living standards eviscerated by a combination of declining real wages and escalating housing prices. In August 2013, a New York Times poll found that 55 percent of voters believed that Bloomberg’s policies favored the rich. Asked whether New York had become “too expensive for people like you to live in,” 85 percent answered yes.4 Propelled by the populist backlash to the city’s widening economic divide, de Blasio’s insurgent campaign put inequality front and center.


The Washington Connection and Third World Fascism by Noam Chomsky

anti-communist, business climate, colonial rule, declining real wages, deliberate practice, European colonialism, friendly fire, Gini coefficient, income inequality, income per capita, land reform, land tenure, new economy, RAND corporation, strikebreaker, union organizing

In Le Monde (7 September 1978), Jean-Pierre Clerc reports an interview with Wilson Ferreira Aldunate, the Uruguayan conservative who received the largest number of votes in the last presidential election and is now in exile, one of the half-million inhabitants of this country of 2.7 million people who have fled since the military coup of 1973 with little notice in the U.S., and who succeeded in fleeing his refuge in Argentina after the military coup there in 1976. He recounts the destruction of Uruguayan democracy, offering as the sole explanation “foreign intervention,” i.e., the application of the Kissinger doctrine of establishing “stable regimes” in Latin America; the systematic torture of 25,000 people, counting only the most severe cases; and the decline of real wages to a 1977 level that is at 60% of the 1962 level. A response to “terrorism” in Laqueur’s sense? Wilson Ferreira points out that the military coup that turned Uruguay into a chamber of horrors took place after the Tupamaros had been “completely destroyed”; “from June 1973 until today, there has not been a single subversive action. But the government kills, kidnaps, imprisons, tortures.” They began by torturing the Tupamaro urban guerrillas, then union activists, then political militants and intellectuals, and finally they have victimized “the entire population, without consideration of ideology, out of habit.”

Peasants turned to rebellion (stigmatized as “Communist terror”) when very moderate demands were met with mounting force and violence by the United States and its local allies drawn from the wealthy elites.111 As Jonathan Fast observed, “the Philippine counterinsurgency effort of the early 1950s served as a laboratory for later American involvement in Vietnam,” where General Lansdale “tried to repeat his Philippine success with Ngo Dinh Diem.”112 From 1946 to 1972 the economy of the Philippines expanded rapidly within its neo-colonial and dependency framework. The salient features of this “success” are described by van der Kroef: “declining real wage rates,113 persistent extreme disparities in income levels, the seemingly unchecked power of private U.S. capital (especially in the context of the operations of a few Filipino family corporations)”; and “graft and corruption prevalent everywhere, but particularly in government, whose machinery of justice was felt to benefit only the rich.”114 The democratic facade of the Philippines was extremely brittle in this society dominated by external interests and a tiny and very wealthy elite, including the U.S. favorite Ferdinand Marcos.


pages: 128 words: 35,958

Getting Back to Full Employment: A Better Bargain for Working People by Dean Baker, Jared Bernstein

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, Asian financial crisis, business cycle, collective bargaining, declining real wages, full employment, George Akerlof, income inequality, inflation targeting, mass immigration, minimum wage unemployment, new economy, price stability, publication bias, quantitative easing, Report Card for America’s Infrastructure, rising living standards, selection bias, War on Poverty

If the real wages of workers in these industries could not be reduced, then fewer workers would be employed. On the other hand, if real wages could be reduced in accordance with the drop in productivity, then workers could keep working. If employers cannot push through cuts in nominal wages, the result will be higher unemployment in a context in which there is little or no inflation. However, if there is a modest amount of inflation, then the necessary decline in real wages can be accomplished by pay increases that lag the rate of inflation. When inflation “greases the wheels” of wages, modest rates of inflation can be associated with higher rates of employment.[29] There could be an ongoing tradeoff in which 2.0 to 3.0 percent inflation rates are associated with a lower level of unemployment and higher level of output than are inflation rates of 2.0 percent or less.


pages: 397 words: 112,034

What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

affirmative action, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Berlin Wall, Black Swan, Bretton Woods, business cycle, capital controls, Cass Sunstein, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial innovation, floating exchange rates, full employment, Gini coefficient, global reserve currency, global village, high net worth, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, price stability, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Robert Shiller, Ronald Reagan, sovereign wealth fund, special drawing rights, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Washington Consensus, Westphalian system, WikiLeaks, women in the workforce, yield curve

But the irregulars get lower wages per hour—40 percent lower per hour for part-timers—and few of the benefits that apply to regular workers, including the twice-yearly bonuses that can amount to as much as a third of income, company-provided portions of health insurance, and pensions. The increase in irregular workers was not a display of flexibility—it was wage austerity that has resulted in declining real wages in every year but one since 2000. For much of the DPJ, the answer is to end flexibility and restore lifetime employment as much as possible. But there is no going back. The DPJ needs to learn from Sweden and Denmark, which have combined the best of market flexibility with security. Companies rise and fall. Jobs come and go. But people receive help transitioning from job to job via generous unemployment compensation and training.


Crisis and Dollarization in Ecuador: Stability, Growth, and Social Equity by Paul Ely Beckerman, Andrés Solimano

banking crisis, banks create money, barriers to entry, business cycle, capital controls, Carmen Reinhart, carried interest, central bank independence, centre right, clean water, currency peg, declining real wages, disintermediation, financial intermediation, fixed income, floating exchange rates, Gini coefficient, income inequality, income per capita, labor-force participation, land reform, London Interbank Offered Rate, Mexican peso crisis / tequila crisis, microcredit, money: store of value / unit of account / medium of exchange, offshore financial centre, old-boy network, open economy, pension reform, price stability, rent-seeking, school vouchers, seigniorage, trade liberalization, women in the workforce

Banks registered an increase in their deposits from the public. Dollarization did not stop inflation immediately, because adjustment to a new equilibrium level for the real exchange rate, undervalued when dollarization was launched, was reached through inflation. In addition, GDP started to recover following official dollarization, helped by a gradual recovery of confidence and favorable external shocks. In turn, unemployment has slowly declined and real wages have become more stable, although real wage levels are rather depressed in dollar terms. Historical and Structural Features of Ecuadoran Economy and Society The deep economic crisis of the late 1990s that preceded dollarization in Ecuador was, as argued in this book (see chapters 2 and 3), the culmination, in dramatic overtones, of an economic and governance crisis associated with several structural characteristics of Ecuadoran economy and society.

Dollarization, as we document in this book, has not been costless in Ecuador. The exchange rate chosen for conversion of the money supply in sucres to dollars (25 sucres per dollar) was a very undervalued rate. As a consequence, there was a sharp reduction in real wages in dollars. As CRISIS AND DOLLARIZATION: AN OVERVIEW 13 inflation continued at a significant (although declining) pace after dollarization, real wages suffered from continuous inflation and slack in the labor market. However, as of early 2002, about two years after dollarization was adopted, the real exchange rate has started to appreciate and real wages to recover. In addition, following the pattern of other exchange-rate-based stabilization plans, a recovery of consumption and an increase in relative prices of nontradable goods and assets accompanied a recovery in economic activity, with declining unemployment and some improvement in deteriorated social conditions.


pages: 476 words: 125,219

Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy by Robert W. McChesney

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, Albert Einstein, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, Automated Insights, barriers to entry, Berlin Wall, business cycle, Cass Sunstein, citizen journalism, cloud computing, collaborative consumption, collective bargaining, creative destruction, crony capitalism, David Brooks, death of newspapers, declining real wages, Double Irish / Dutch Sandwich, Erik Brynjolfsson, failed state, Filter Bubble, full employment, future of journalism, George Gilder, Gini coefficient, Google Earth, income inequality, informal economy, intangible asset, invention of agriculture, invisible hand, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Julian Assange, Kickstarter, Mark Zuckerberg, Marshall McLuhan, means of production, Metcalfe’s law, mutually assured destruction, national security letter, Nelson Mandela, Network effects, new economy, New Journalism, Nicholas Carr, Occupy movement, offshore financial centre, patent troll, Peter Thiel, plutocrats, Plutocrats, post scarcity, price mechanism, profit maximization, profit motive, QWERTY keyboard, Ralph Nader, Richard Stallman, road to serfdom, Robert Metcalfe, Saturday Night Live, sentiment analysis, Silicon Valley, single-payer health, Skype, spectrum auction, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, Stewart Brand, Telecommunications Act of 1996, the medium is the message, The Spirit Level, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, Upton Sinclair, WikiLeaks, winner-take-all economy, yellow journalism

But that won’t happen, because if steel production increased sixfold, the handful of giant firms that dominate production would have to sell it at lower prices for less profit. Instead of a flowering economy that makes the quality of life today vastly superior to that of forty or fifty years ago, millions go without work, much of our productive potential lies fallow, and our public sector is in squalor. People are working longer hours, with less vacation and later retirement, for stagnant or declining real wages, with less security, in an environment increasingly unable to sustain human civilization. Poverty has reached levels not seen for generations and found more commonly in the global South.26 In 2012 U.S. businesses held $1.73 trillion in liquid assets—or cash, in shorthand—that they were not investing for apparent lack of profitable options. This was a 50 percent increase in the corporate cash reserves from 2007.27 Is there any stronger evidence that the economic system is absurd?


pages: 394 words: 124,743

Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry by Steven Rattner

activist fund / activist shareholder / activist investor, affirmative action, bank run, banking crisis, business cycle, centre right, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, creative destruction, credit crunch, David Brooks, David Ricardo: comparative advantage, declining real wages, friendly fire, hiring and firing, income inequality, Joseph Schumpeter, low skilled workers, McMansion, Mikhail Gorbachev, moral hazard, Ronald Reagan, Saturday Night Live, shareholder value, supply-chain management, too big to fail

We'd settled on what seemed like a neutral option: we rented a Ford Escape from Budget. (Haley had made sure it had a GPS, since none of us knew our way around Detroit.) Ron drove, with Brian, Diana, and me as passengers. Our first stop was Solidarity House. As I had told Ron when we first met, I believed in saving jobs. I had also written op-eds about America's growing income inequality and about the declining real wages of workers. I believed that organized labor could be a constructive part of the solution as long as it focused on those issues, rather than on featherbedding, trying to protect workers who were not pulling their weight, and blindly fighting technological change. During my eight and a half years at the New York Times I'd been a card-carrying member of the Newspaper Guild and had watched the company's eleven unions make all those mistakes.


pages: 142 words: 45,733

Utopia or Bust: A Guide to the Present Crisis by Benjamin Kunkel

anti-communist, Bretton Woods, business cycle, capital controls, Carmen Reinhart, creative destruction, David Graeber, declining real wages, full employment, Hyman Minsky, income inequality, late capitalism, liberal capitalism, liquidity trap, means of production, money: store of value / unit of account / medium of exchange, mortgage debt, Occupy movement, peak oil, price stability, profit motive, savings glut, Slavoj Žižek, The Wealth of Nations by Adam Smith, transatlantic slave trade, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, zero-sum game

Robert Brenner, in The Economics of Global Turbulence (2006), calls this the Full Employment Profit Squeeze thesis. The thesis has proved remarkably durable in the face of the stubborn persistence, since the ’70s, of weak economic performance among the rich countries—even with the return of mass unemployment, the worldwide enfeeblement of the labor movement, and the stagnation or outright decline of real wages. How can the effect of slower growth have so outlived its notorious cause? According to the thesis, post–Golden Age workers still enjoy too much power at the levels of shop floor, industry, and government. To risk full employment in these circumstances would only unleash another wage explosion, with labor costs again outrunning productivity. The restoration of the system’s dynamism can only come about through labor’s final defeat or surrender—one that, in spite of all of labor’s lost battles over the last thirty years, still has yet to occur.


pages: 165 words: 47,405

Imperial Ambitions: Conversations on the Post-9/11 World by Noam Chomsky, David Barsamian

British Empire, collective bargaining, cuban missile crisis, declining real wages, failed state, feminist movement, Howard Zinn, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Joseph Schumpeter, liberation theology, Monroe Doctrine, Nelson Mandela, offshore financial centre, Ronald Reagan, The Wealth of Nations by Adam Smith, Thomas L Friedman, Upton Sinclair, uranium enrichment, Westphalian system

That’s roughly 50 percent of what they’re calling foreign direct investment, and it certainly was not going to build steel plants. This was just money flowing into various tax havens. Most of the rest was going for mergers and acquisitions and so on. These are huge sums. The scale of sheer robbery by corporate power is enormous. In any event, corporations and rich people barely pay taxes, so they’re doing fine. But the general population has gone through thirty years of either stagnation or decline in real wages, with people working longer hours with fewer benefits. I don’t think there’s been a period like this in American history. The United States is still a very rich country. It’s got enormous advantages, of scale, resources, anything you can think of. But it’s being subjected to domestic policies that are frightening. Conservative economists are tearing their hair out watching the Bush administration purposely drive the country into incredible debt.


pages: 311 words: 130,761

Framing Class: Media Representations of Wealth and Poverty in America by Diana Elizabeth Kendall

Bernie Madoff, blue-collar work, Bonfire of the Vanities, call centre, David Brooks, declining real wages, Donald Trump, employer provided health coverage, ending welfare as we know it, fixed income, framing effect, Georg Cantor, Gordon Gekko, greed is good, haute couture, housing crisis, illegal immigration, income inequality, mortgage tax deduction, new economy, payday loans, Ponzi scheme, Ray Oldenburg, Richard Florida, Ronald Reagan, Saturday Night Live, telemarketer, The Great Good Place, Thorstein Veblen, trickle-down economics, union organizing, upwardly mobile, urban planning, working poor

Except for the fact that no one is threatening to damage their kneecaps, they’re in the same dismal position as the classic victim of loansharking.”75 Herbert’s article explains that buying on credit used to help the middle-class family stay afloat, at least temporarily, but in the long run, many of these families have actually gone “deeper and deeper into debt, in large part because of the overuse of credit cards.”76 Citing a report titled “Borrowing to Make Ends Meet” (compiled by a nonpartisan public-policy group), Herbert states that “more and more Americans are using credit cards to bridge the difficult gap between household earnings and the cost of essential goods and services.”77 Heightening this predicament are structural problems in the U.S. economy, such as widespread job displacement, declining real wages, and rising housing and health-care costs. As a result, many in the middle class rely on credit cards as “a way of warding off complete disaster,” until they exhaust this avenue, and unpaid credit card debt continues to pile up.78 The framing of a number of articles, including Herbert’s, about the middleclass squeeze reflects the content of published government reports or wellreceived books that highlight the “gloom and doom” of the middle class.


Turning the Tide by Noam Chomsky

anti-communist, Bolshevik threat, British Empire, collective bargaining, cuban missile crisis, declining real wages, failed state, feminist movement, Howard Zinn, land reform, means of production, Monroe Doctrine, Paul Samuelson, RAND corporation, Ronald Reagan, union organizing

During Reagan’s first term, the average annual growth rate fell by 25% from the rate during the Carter years while Reagan’s “conservatism” brought productive investment and the US position in international trade to record lows and the Federal deficit to record heights as the ratio of state spending to GNP rose more rapidly than at any time since World War II. Growth in nonagricultural employment fell from 3.3% under Carter to 1%. Employment in manufacturing fell by 0. 7 million in contrast to an increase of 1.3 million under Carter. The unemployment rate in 1984 was higher than the average for any year of the Carter Administration, and would have been higher still had the growth in the labor force not declined. Real wages continued their decline at a rate faster than in the Carter years while the share of government spending in the national product rose. Inflation dropped, with about one-third to one-half of the reduction a result of the leveling off of petroleum prices, much of the rest attributable to the assault on labor and the Reagan-induced recession, which had a serious impact elsewhere as well, particularly for the “developing countries.”


pages: 580 words: 168,476

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, income inequality, income per capita, indoor plumbing, inflation targeting, information asymmetry, invisible hand, jobless men, John Harrison: Longitude, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, London Interbank Offered Rate, lone genius, low skilled workers, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, negative equity, obamacare, offshore financial centre, paper trading, Pareto efficiency, patent troll, Paul Samuelson, payday loans, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, wealth creators, women in the workforce, zero-sum game

Today America’s manufacturing workers have been experiencing something similar.12 I recently visited a steel mill near where I was born, in Gary, Indiana, and although it produces the same amount of steel that it did several decades ago, it does so with one-sixth the labor. And once again there is neither the push nor the pull to move people to new sectors: higher costs of education make it difficult for people to obtain the skills they need for jobs that would pay a wage comparable to their old wage; and among the sectors where there might have been growth, low demand from the recession creates few vacancies. The result is stagnant, or even declining, real wages. As recently as 2007, the base wage of an autoworker was around $28 an hour. Now, under a two-tier wage system agreed upon with the United Automobile Workers union, new hires can expect to earn only about $15 an hour.13 Back to the role of government This broad narrative of what has happened to the market and the contribution of market forces to increasing inequality ignores the role that government plays in shaping the market.


Debtor Nation: The History of America in Red Ink (Politics and Society in Modern America) by Louis Hyman

asset-backed security, bank run, barriers to entry, Bretton Woods, business cycle, card file, central bank independence, computer age, corporate governance, credit crunch, declining real wages, deindustrialization, diversified portfolio, financial independence, financial innovation, fixed income, Gini coefficient, Home mortgage interest deduction, housing crisis, income inequality, invisible hand, late fees, London Interbank Offered Rate, market fundamentalism, means of production, mortgage debt, mortgage tax deduction, p-value, pattern recognition, profit maximization, profit motive, risk/return, Ronald Reagan, Silicon Valley, statistical model, technology bubble, the built environment, transaction costs, union organizing, white flight, women in the workforce, working poor, zero-sum game

Outstanding debt levels, growing gradually since the World War II, exploded as consumers borrowed as they had for generations, but, for the first time, found themselves unable to pay back what they borrowed. While the amount of outstanding debt tripled from 1970 to 1979, the gap between what was loaned and what was repaid increased seven times, to $35 billion a year.204 Everywhere, in the face of uncertainty and declining real wages, Americans indebted themselves to maintain the life they had once been able to afford. Chapter Seven Securing Debt in an Insecure World CREDIT CARDS AND CAPITAL MARKETS In 1978, Donald Auriemma, then the vice-president of Chemical Bank’s personal loan department, doubted the wisdom of Citibank’s aggressive expansion into the credit card business that had begun a few years earlier. Auriemma expected that the expansion would not pay off for Citibank since he believed that “the credit card business is marginal, [and] it’ll never make big money for banks.”1 Yet within a few years, these marginal profits on credit cards would become the center of lending.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low-wage service sector, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Employment recovered a year earlier than output, and unemployment never hit the 3-million mark reached during the recessions of the early 1980s and 1990s. But output per worker was lower during this period since less output was demanded in a recession than in normal times. Since the 2008 crisis, output per worker grew at just 0.2 per cent per year, which is a fraction of the 2.1 per cent average growth rate between 1972 and 2007. Wage flexibility helped to maintain jobs during the latest recession, a decline in real wages making it possible to keep people in work.9 Employers hoarding workers instead of laying them off doesn’t explain the entire productivity puzzle.10 Part of the answer may be that the British economy has a large services sector in which it is difficult to measure either investment or output accurately.11 But the US also has a large services sector and doesn’t suffer from the productivity problem to the same extent, so mismeasurement is unlikely to be the whole story either.


pages: 374 words: 113,126

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Employment recovered a year earlier than output, and unemployment never hit the 3-million mark reached during the recessions of the early 1980s and 1990s. But output per worker was lower during this period since less output was demanded in a recession than in normal times. Since the 2008 crisis, output per worker grew at just 0.2 per cent per year, which is a fraction of the 2.1 per cent average growth rate between 1972 and 2007. Wage flexibility helped to maintain jobs during the latest recession, a decline in real wages making it possible to keep people in work.9 Employers hoarding workers instead of laying them off doesn’t explain the entire productivity puzzle.10 Part of the answer may be that the British economy has a large services sector in which it is difficult to measure either investment or output accurately.11 But the US also has a large services sector and doesn’t suffer from the productivity problem to the same extent, so mismeasurement is unlikely to be the whole story either.


pages: 227 words: 71,675

Rules for Revolutionaries: How Big Organizing Can Change Everything by Becky Bond, Zack Exley

battle of ideas, Bernie Sanders, call centre, centre right, cognitive dissonance, crowdsourcing, declining real wages, Donald Trump, family office, fixed income, full employment, hiring and firing, hydraulic fracturing, immigration reform, income inequality, Kickstarter, mass incarceration, Naomi Klein, Occupy movement, oil shale / tar sands, plutocrats, Plutocrats, randomized controlled trial, Skype, telemarketer, union organizing

Preface • zack • This book has gone to the printer before the 2016 presidential election, so we don’t know whether Clinton or Trump is the president as you’re reading this. America either just narrowly survived its first brush with actual fascism, or we just learned that, yes, it can happen here. Either way, we believe that the rules in this book provide some of the answers for the struggle ahead. No matter who wins in 2016, the revolution is here. In democracies, people do not accept decline forever. Real wages have been falling for forty years. Our maternal mortality rate has fallen behind every developed nation in the world and many developing nations. Forty percent of Americans will live below the poverty line at some point in their lives. Tens of millions of children who grew up in middle class homes are finding themselves firmly in the working class. Criminal justice systems at every level of government prey upon Americans of all backgrounds but disproportionately on African Americans and Latinos.


pages: 255 words: 75,172

Sleeping Giant: How the New Working Class Will Transform America by Tamara Draut

affirmative action, Affordable Care Act / Obamacare, always be closing, American ideology, battle of ideas, big-box store, blue-collar work, collective bargaining, creative destruction, David Brooks, declining real wages, deindustrialization, desegregation, Detroit bankruptcy, Donald Trump, Edward Glaeser, ending welfare as we know it, Ferguson, Missouri, financial deregulation, full employment, immigration reform, income inequality, invisible hand, job satisfaction, knowledge economy, knowledge worker, low skilled workers, mass incarceration, minimum wage unemployment, mortgage tax deduction, new economy, obamacare, occupational segregation, payday loans, pink-collar, plutocrats, Plutocrats, Powell Memorandum, profit motive, race to the bottom, Ralph Nader, rent-seeking, rising living standards, Ronald Reagan, shared worldview, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, trickle-down economics, union organizing, upwardly mobile, War on Poverty, white flight, women in the workforce, young professional

Today the median wage for people in the working class aged twenty-five to sixty-four is $1.30 less per hour than it was in 1980 ($15.61, down from $16.91).29 Still, looking at the working class as an undifferentiated whole hides very important distinctions by gender, race, and age. Like American society more generally, there’s a hierarchy of earnings. Working-class men still outearn all other demographic groups in the working class, despite a nearly $5-per-hour decline in real wages over the past three decades. Today the median hourly wage for working-class men is $17.56, down from $22.04 in 1980. The white working class makes significantly more than any other demographic group, thanks in large part to the higher wages of men. As Table 2 shows, hourly wages for most workers have been stagnant over the past three decades, with modest increases for women and only significant declines for men.


pages: 232

Planet of Slums by Mike Davis

barriers to entry, Branko Milanovic, Bretton Woods, British Empire, Brownian motion, centre right, clean water, conceptual framework, crony capitalism, declining real wages, deindustrialization, Deng Xiaoping, edge city, European colonialism, failed state, Gini coefficient, Hernando de Soto, housing crisis, illegal immigration, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, jitney, jobless men, Kibera, labor-force participation, land reform, land tenure, liberation theology, low-wage service sector, mandelbrot fractal, market bubble, megacity, microcredit, Nelson Mandela, New Urbanism, Pearl River Delta, Ponzi scheme, RAND corporation, rent control, structural adjustment programs, surplus humans, upwardly mobile, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor

As a result, infrastructure and public health everywhere lost the race with population increase. In Kinshasa, writes Theodore Trefon, "the population refers to basic public services as 'memories.'"12 The balance sheet of structural adjustment in Africa, reviewed by Carole Rakodi, includes capital flight, collapse of manufactures, marginal or negative increase in export incomes, drastic cutbacks in urban public services, soaring prices, and a steep decline in real wages.13 Across the continent people learned to say "I have the crisis" in the same way one says, "I have a cold."14 In Dar-es-Salaam, public-service expenditure per person fell 10 percent per annum during the 1980s, a virtual demolition of the local state.15 In Khartoum, liberalization and 11 Challenge, p. 48. 12 Theodore Trefon, "Introduction: Reinventing Order," in Trefon, Reinventing Order in the Congo, p. 1. 13 Rakodi, "Global Forces, Urban Change, and Urban Management i n Africa," in Rakodi, Urban Challenge, pp. 50, 60-61. 14 Achille Mbembe and Janet Roitman, "Figures of the Subject in Times of Crisis," in Enwezor et al., Under Siege, p. 112. 15 Michael Mattingly, "The Role of the Government of Urban Areas in the Creation of Urban Poverty," in Sue Jones and Nici Nelson (eds), Urban Poverty in Africa: From Understanding to Alleviation, London 1999, p. 21.


Cultural Backlash: Trump, Brexit, and Authoritarian Populism by Pippa Norris, Ronald Inglehart

affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Berlin Wall, Bernie Sanders, Boris Johnson, Cass Sunstein, centre right, cognitive dissonance, conceptual framework, declining real wages, desegregation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, feminist movement, first-past-the-post, illegal immigration, immigration reform, income inequality, job automation, knowledge economy, labor-force participation, land reform, liberal world order, longitudinal study, low skilled workers, mass immigration, meta analysis, meta-analysis, obamacare, open borders, open economy, post-industrial society, post-materialism, precariat, purchasing power parity, rising living standards, Ronald Reagan, sexual politics, Silicon Valley, statistical model, stem cell, War on Poverty, white flight, winner-take-all economy, women in the workforce, working-age population, World Values Survey, zero-sum game

Golden Dawn had been a fringe factor in Greek elections before the crash, but it entered parliament for the first time in 2012 with 21 seats and 7 percent of the popular vote, maintaining this level in subsequent contests. The party has been accused of carrying out acts of violence against immigrants, political opponents, homosexuals, and ethnic minorities.53 The 2007–2013 financial crisis had destabilizing effects on Greece: a large share of the professional middle class employed in the public sector experienced declining real wages and loss of job security. This country has also been at the forefront of a massive influx of sea-­borne immigrants and refugees seeking to escape conflict and extreme poverty in Syria, Afghanistan, and Ethiopia, through the route across the Mediterranean. Similarly, in Spain, the rise of Podemos, founded in March 2014 by Pablo Iglesias as a progressive populist party, has been widely interpreted as a response to economic conditions, including the Eurozone debt crisis and the subsequent recession, problems of corruption and inequality, and record levels of youth unemployment.54 In the December 20, 2015 parliamentary elections, Podemos surged to receive 21 percent of the vote, 152 Economic Grievances becoming Spain’s third largest party in parliament, with 69 out of 350 seats.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Basel III, Black Swan, blood diamonds, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Gordon Gekko, hiring and firing, income inequality, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, pension reform, performance metric, pirate software, plutocrats, Plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

Would employees instead be paid according to their productivity level? This issue has dogged economics since the early industrial revolution, when data first began to appear regarding wages and productivity and inspired a series of famous (among economists) debates during the 1880s: Alfred Marshall faced down enthusiasts of Henry George and John Stuart Mill, who believed that competition among workers always had the potential to cause stagnating or declining real wages regardless of rising productivity. Marshall demurred.10 Armed with decades of statistics from the era of labor shortages created by the industrial revolution then driving up real wages, Marshall argued that private property and competition were succeeding in raising wages where socialism could not. The outcome was that a wage-productivity link became standard theory among economists. This presumed linkage between wages and productivity was also credentialed by the iconic American automaker Henry Ford, whose legacy remains embodied in the Australian wage mechanism of the rich democracies today.


pages: 318 words: 85,824

A Brief History of Neoliberalism by David Harvey

affirmative action, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, business cycle, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, George Gilder, Gini coefficient, global reserve currency, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, Mexican peso crisis / tequila crisis, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the built environment, The Chicago School, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, Winter of Discontent

But PATCO was more than an ordinary union: it was a white-collar union which had the character of a skilled professional association. It was, therefore, an icon of middle-class rather than working-class unionism. The effect on the condition of labour across the board was dramatic—perhaps best captured by the fact that the Federal minimum wage, which stood on a par with the poverty level in 1980, had fallen to 30 per cent below that level by 1990. The long decline in real wage levels then began in earnest. Reagan’s appointments to positions of power on issues such as environmental regulation, occupational safety, and health, took the campaign against big government to ever higher levels. The deregulation of everything from airlines and telecommunications to finance opened up new zones of untrammelled market freedoms for powerful corporate interests. Tax breaks on investment effectively subsidized the movement of capital away from the unionized north-east and midwest and into the non-union and weakly regulated south and west.


Not Working by Blanchflower, David G.

active measures, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, bank run, banking crisis, basic income, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, Boris Johnson, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clapham omnibus, collective bargaining, correlation does not imply causation, credit crunch, declining real wages, deindustrialization, Donald Trump, estate planning, Fall of the Berlin Wall, full employment, George Akerlof, gig economy, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, indoor plumbing, inflation targeting, job satisfaction, John Bercow, Kenneth Rogoff, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, longitudinal study, low skilled workers, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, mass incarceration, meta analysis, meta-analysis, moral hazard, Nate Silver, negative equity, new economy, Northern Rock, obamacare, oil shock, open borders, Own Your Own Home, p-value, Panamax, pension reform, plutocrats, Plutocrats, post-materialism, price stability, prisoner's dilemma, quantitative easing, rent control, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, selection bias, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Thorstein Veblen, trade liberalization, universal basic income, University of East Anglia, urban planning, working poor, working-age population, yield curve

The Front National won large parts of the deindustrialized north and east, as well as the south, while Macron took the west. He was strong in cosmopolitan cities, while Le Pen was strong in small towns and rural areas that felt abandoned. Le Pen took nine of the ten départements with France’s highest unemployment rates. What happened in France looks much like what happened in the UK and the United States. Lesseducated whites living outside the big cities, who had been hurt by economic decline, falling real wages, unemployment, under-employment, and a lack of good jobs, voted for populism. Once again, they were against immigration, from outside the big cities, which have prospered, and the rule of the elites. This time right-wing populism lost. There isn’t going to be a Frexit, but election winner Sebastian Kurz is president of Austria, and his party is in coalition with the far-right Freedom Party (FPO), suggesting that the French election may not be a turning point.


pages: 319 words: 90,965

The End of College: Creating the Future of Learning and the University of Everywhere by Kevin Carey

Albert Einstein, barriers to entry, Bayesian statistics, Berlin Wall, business cycle, business intelligence, carbon-based life, Claude Shannon: information theory, complexity theory, David Heinemeier Hansson, declining real wages, deliberate practice, discrete time, disruptive innovation, double helix, Douglas Engelbart, Douglas Engelbart, Downton Abbey, Drosophila, Firefox, Frank Gehry, Google X / Alphabet X, informal economy, invention of the printing press, inventory management, John Markoff, Khan Academy, Kickstarter, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, meta analysis, meta-analysis, natural language processing, Network effects, open borders, pattern recognition, Peter Thiel, pez dispenser, ride hailing / ride sharing, Ronald Reagan, Ruby on Rails, Sand Hill Road, self-driving car, Silicon Valley, Silicon Valley startup, social web, South of Market, San Francisco, speech recognition, Steve Jobs, technoutopianism, transcontinental railway, uber lyft, Vannevar Bush

In addition, college degrees signal that people have successfully navigated a defined and lengthy organizational process by signing up for the right courses, attending (presumably) many of the classes, figuring out what it takes to pass the classes’ final exams, and showing up for the finals—“faithfulness, docility, and memory,” in Hutchins’s phrase. The value of this information in the labor market has increased markedly. The difference between the average wage for people with a bachelor’s degree and people with only a high school diploma doubled between 1977 and 2005, even as the supply of diploma bearers increased substantially. This occurred in part because of skill-biased technology change and the decline in real wages for low-skill workers. College credentials have also been locked in place as a required part of many large professions. Teachers, for example: There are 3.7 million elementary, middle, and high school teachers in America. Almost every one of them has a bachelor’s degree, and nearly half have a master’s degree. This did not happen because tens of thousands of school principals individually decided that it was impossible for someone to succeed in the classroom without first spending four years in a hybrid university.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"Robert Solow", 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

This allowed the firms to increase their earnings at the expense of workers. Cheaper goods and services and increased consumer choice came at the cost of displaced workers in developed countries. While it helped improve living standards in emerging nations, the influx of around 1.5 billion additional workers into the global economy reduced the bargaining power of employees in developed markets, ushering in declines in real wages. Ironically, China's new socialism did not unite the workers of the world, but divided them, triggering “the profoundest global reshuffle of people's economic positions since the Industrial Revolution.”4 Automation increased both corporate profits and income inequality. Apple's ubiquitous i-gadgets consist of components made in multiple countries and assembled in China, with the supply chain being managed in the US by Apple, which earns around 30–50 percent of the final price.


pages: 318 words: 93,502

The Two-Income Trap: Why Middle-Class Parents Are Going Broke by Elizabeth Warren, Amelia Warren Tyagi

activist fund / activist shareholder / activist investor, business climate, Columbine, declining real wages, equal pay for equal work, feminist movement, financial independence, labor-force participation, late fees, McMansion, mortgage debt, new economy, New Journalism, payday loans, school choice, school vouchers, telemarketer, urban sprawl, women in the workforce

Calculated from The State of Working America 2002-2003, Table 1.32, Annual Hours, Wives in Prime-Age, Married-Couple Families with Children, and Contributions to Change, 1979-2000, Sorted by Husband’s Income. 58 Coontz, The Way We Never Were, p. 168. 59 Chris McComb, “Few Say It’s Ideal for Both Parents to Work Full Time Outside of Home,” Gallup News Service, April 20-22, 2001. 60 Both women and men who did not finish high school saw declines in real wages over the past twenty years. By contrast, among college graduates, women’s earnings have increased 30 percent since 1979, while men’s earnings have increased by 17 percent. U.S. Department of Labor, “Highlights of Women’s Earnings in 2000,” Report 952, August 2001, Table 15, Median Usual Weekly Earnings of Full-Time Wage and Salary Workers 25 and Over in Constant (2000) Dollars, by Sex and Educational Attainment, 1979-2000 Annual Averages. 61 Median earnings, which are the best measure of middle-class wages, have risen less than 1 percent for men since the early 1970s, while women’s earnings have increased by more than one-third.


pages: 351 words: 96,780

Hegemony or Survival: America's Quest for Global Dominance by Noam Chomsky

anti-communist, Berlin Wall, Bretton Woods, British Empire, capital controls, cuban missile crisis, declining real wages, Doomsday Clock, facts on the ground, failed state, Fall of the Berlin Wall, invisible hand, liberation theology, long peace, market fundamentalism, Monroe Doctrine, Nelson Mandela, RAND corporation, Ronald Reagan, Search for Extraterrestrial Intelligence, uranium enrichment

The business press was exultant about the “green shoots in Communism’s ruins,” where “rising unemployment and pauperization of large sections of the industrial working class” meant that people were willing “to work longer hours than their pampered colleagues” in the West, at 40 percent of the wages and with few benefits. Further “green shoots” include enough repression to keep working people in line and attractive state subsidies for Western investors. These market reforms would enable Europe to “hammer away at high wages and corporate taxes, short working hours, labor immobility, and luxurious social programs.” Europe would be able to follow the American pattern, where the decline of real wages in the Reagan years to the lowest level among the advanced industrial societies (apart from Britain) was “a welcome development of transcendent importance.” With Communism’s ruins playing something like the role of Mexico, the advantages can now be brought to Western Europe as well, driving it toward the US-British model.2 Communism’s ruins have many advantages over the regions that have been under unbroken Western domination for centuries.


pages: 290 words: 98,699

Wealth Without a Job: The Entrepreneur's Guide to Freedom and Security Beyond the 9 to 5 Lifestyle by Phil Laut, Andy Fuehl

British Empire, business process, buy and hold, declining real wages, fear of failure, hiring and firing, index card, job satisfaction, Menlo Park, Silicon Valley, women in the workforce

If the American dream is to do better than your parents, then the prospects of fulfilling this dream with a job are far slimmer than they once were. This chapter offers a brief historical perspective of today’s economic conditions to inspire you with a sense of urgency. F igure 2.1 presents a startling graph showing the purchasing power of the average weekly wage income of the American worker, adjusted for inflation, since 1959. Here you can see the gradual decline in real wages since 1973. (Real wages are adjusted for inflation and thus reflect purchasing power.) Despite the fact that current dollar wages have been increasing, these gains have been outstripped by inflation since 1973, resulting in a gradual decline of purchasing power of about 1 percent per year. People are earning a little more each year, but each year it buys a little less. The growth in the economy in the last few years has been accomplished not by higher wages for workers but rather by a significant increase in the number of workers (mostly young mothers), so that each worker gets a little smaller piece of a much larger pie.


Rogue States by Noam Chomsky

anti-communist, Asian financial crisis, Berlin Wall, Branko Milanovic, Bretton Woods, business cycle, capital controls, collective bargaining, colonial rule, creative destruction, cuban missile crisis, declining real wages, deskilling, Edward Snowden, experimental subject, Fall of the Berlin Wall, floating exchange rates, land reform, liberation theology, Mikhail Gorbachev, Monroe Doctrine, new economy, oil shock, RAND corporation, Silicon Valley, strikebreaker, structural adjustment programs, Tobin tax, union organizing, Washington Consensus

It contributes to undermining health and safety standards in the workplace, which the government chooses not to enforce, leading to a sharp rise in industrial accidents in the Reagan years.54 It also helps to undermine functioning democracy, as people with limited resources lose some of the few methods by which they can enter the political arena. And it accelerates the privatization of aspirations, dissolving the sense of solidarity and sympathy, and other human values that were at the heart of classical liberal thought but are inconsistent with the reigning ideology of privilege and power. More narrowly, the US Labor Department estimates that weakening of unions accounts for a large part of the stagnation or decline in real wages under the Reaganites, “a welcome development of transcendent importance,” as the Wall Street Journal described the fall in labor costs from the 1985 high to the lowest in the industrial world (UK aside).55 Testifying before the Senate Banking Committee in February 1997, Federal Reserve Board Chair Alan Greenspan was highly optimistic about “sustainable economic expansion” thanks to “atypical restraint on compensation increases [which] appears to be mainly the consequence of greater worker insecurity,” plainly a desideratum for a good society and yet another reason for Western relativists to reject Article 25 of the UD, with its “right to security.”


Powers and Prospects by Noam Chomsky

anti-communist, Berlin Wall, Bretton Woods, colonial rule, declining real wages, deindustrialization, deskilling, Fall of the Berlin Wall, invisible hand, Jacques de Vaucanson, John von Neumann, liberation theology, Monroe Doctrine, old-boy network, RAND corporation, Ronald Reagan, South China Sea, theory of mind, Tobin tax, Turing test

Morgan as compared with the ‘stunning’ profit increase of 54 per cent for the 500 with a mere 2.6 per cent increase of employment and 8.2 per cent sales gain in ‘one of the most profitable years ever for American business’, as Fortune reported exultantly. The business press hailed another ‘banner year for U.S. corporate profits’, while ‘U.S. household wealth seems to have actually fallen’ in this fourth straight year of double-digit profit growth and fourteenth straight year of decline in real wages. The Fortune 500 have attained new heights of ‘economic might’, with revenues close to two-thirds of gross domestic product, a good bit more than Germany or Britain, not to speak of their power over the global economy—an impressive concentration of power in unaccountable private tyrannies, and another welcome blow against democracy and markets.19 We live in ‘lean and mean times’, and everyone has to tighten their belts; so the mantra goes.


pages: 364 words: 104,697

Were You Born on the Wrong Continent? by Thomas Geoghegan

Albert Einstein, American Society of Civil Engineers: Report Card, banking crisis, Berlin Wall, Bob Geldof, collective bargaining, corporate governance, cross-subsidies, dark matter, David Brooks, declining real wages, deindustrialization, ending welfare as we know it, facts on the ground, Gini coefficient, haute cuisine, income inequality, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, laissez-faire capitalism, low skilled workers, Martin Wolf, McJob, minimum wage unemployment, mittelstand, offshore financial centre, Paul Samuelson, payday loans, pensions crisis, plutocrats, Plutocrats, purchasing power parity, Ralph Waldo Emerson, Robert Gordon, Ronald Reagan: Tear down this wall, Saturday Night Live, Silicon Valley, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, Wolfgang Streeck, women in the workforce

At least there still is an IG Metall: with its 2.3 million members, it’s still about as big as it was in 1973. Even if that now counts East Germans, it’s still astonishing, when in the U.S. we’ve seen our own United Auto Workers and Steelworkers practically disappear. At least there is still a membership that can march. While the Germans may have held back on wage increases at various times, look at the steady decline of real wages in the U.S. From 1973 to 2005, productivity in America went up approximately 55 percent. Put another way, output per hour went up 55 percent. Meanwhile, the average hourly wage dropped 8 percent! Harvard’s Richard Freeman, perhaps our leading labor economist, once wrote: “If in 1973 any economist had predicted such a pattern, the American Economic Association would have carted him or her off as mad.”


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The Dangerous Case of Donald Trump: 27 Psychiatrists and Mental Health Experts Assess a President by Bandy X. Lee

Affordable Care Act / Obamacare, cuban missile crisis, David Brooks, declining real wages, delayed gratification, demand response, Donald Trump, Doomsday Clock, facts on the ground, fear of failure, illegal immigration, impulse control, meta analysis, meta-analysis, national security letter, Ronald Reagan, Skype, Steve Jobs, The Chicago School

In response, he offered to edit excerpts of some of his past interviews in service of this epilogue. Bandy Lee It is pretty clear what is responsible for the rise of the support for Trump, and there is general agreement about it. If you take a simple look at economic statistics, much of the support for Trump is coming from mostly white, working-class people who have been cast by the wayside during the neoliberal period. They have lived through a generation of stagnation or decline—real male wages are about where they were in the 1960s. There has also been a decline in a functioning democracy, overwhelming evidence that their own elected officials barely reflect their interests and concerns. Contempt for institutions, especially Congress, has just skyrocketed. Meanwhile, there has of course been wealth created. It has gone into very few hands: mostly into a fraction of the top one percent, so there is enormous opulence.


pages: 421 words: 110,272

Deaths of Despair and the Future of Capitalism by Anne Case, Angus Deaton

Affordable Care Act / Obamacare, basic income, Bertrand Russell: In Praise of Idleness, business cycle, call centre, collapse of Lehman Brothers, collective bargaining, Corn Laws, corporate governance, correlation coefficient, crack epidemic, creative destruction, crony capitalism, declining real wages, deindustrialization, demographic transition, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Elon Musk, falling living standards, Fellow of the Royal Society, germ theory of disease, income inequality, Jeff Bezos, Joseph Schumpeter, Kenneth Arrow, labor-force participation, low skilled workers, Martin Wolf, Mikhail Gorbachev, obamacare, pensions crisis, randomized controlled trial, refrigerator car, rent-seeking, risk tolerance, shareholder value, Silicon Valley, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, universal basic income, working-age population, zero-sum game

Employers often complain that they are short of labor and, without immigrants, they might have to pay more or increase benefits. Exactly so, say the critics of immigration.5 Having more workers to compete with at home, like having more cheap workers abroad, or more robots, can certainly reduce wages, at least in principle. Whether they have done so is the crucial question. To explain the collapse of the working-class labor market, we are looking for factors that might be responsible for a half-century decline in real wages for less educated Americans. Given this, when we think about immigration and jobs, we need to distinguish immediate and longer-term effects. Suppose that the number of jobs is inflexible over a short time period of months or even years; this is the worst possible case for the wages of those already here. Immigrants displace locals or reduce their wages; they also raise profits and the rate of return to capital.


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The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton

"Robert Solow", Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, clean water, colonial exploitation, Columbian Exchange, creative destruction, declining real wages, Downton Abbey, end world poverty, financial innovation, germ theory of disease, Gini coefficient, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, very high income, War on Poverty

This effect will not be important for groups or occupations in which people are relatively well paid, so that there are few people below the minimum, but it will be important in low-wage areas, in low-wage occupations, or among groups, such as women or African-Americans, whose wages are relatively low.22 If the erosion of the minimum wage since the 1970s has been partly responsible for the overall decline in real wages among low-wage workers, why didn’t politics stop it from happening? One reason is the decline of labor unions, especially in the private sector. The fraction of private-sector workers who were union members declined from 24 percent in 1973 to only 6.6 percent in 2012. Although the unionization of public-sector workers increased in the 1970s, it has been stagnant since 1979; the majority of union members are now in the public sector.


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Revolution at Point Zero: Housework, Reproduction, and Feminist Struggle by Silvia Federici

Community Supported Agriculture, declining real wages, equal pay for equal work, feminist movement, financial independence, fixed income, global village, illegal immigration, informal economy, invisible hand, labor-force participation, land tenure, mass incarceration, means of production, microcredit, neoliberal agenda, new economy, Occupy movement, planetary scale, Scramble for Africa, statistical model, structural adjustment programs, the market place, trade liberalization, UNCLOS, wages for housework, Washington Consensus, women in the workforce, World Values Survey

The attack waged by the World Bank through Structural Adjustment falsifies Meillassoux’s claim that the domestic economy is functional to capitalism, but verifies his prediction that a “final” crisis of capitalism looms because of its inability to preserve and control the domestic economy (Meillassoux, Maidens, Meal, and Money, 141). 20. Federici. “The Debt Crisis”; Caffentzis, “The Fundamental Implications”; Terisa E. Turner and Leigh S. Brownhill, “African Jubilee: Mau Mau Resurgence and the Fight for Fertility in Kenya, 1986-2001,” in Commons, special issue, Canadian Canadian Journal of Development Studies 22, eds. Terisa E. Turner and Leigh S. Brownhill. 21. Witness the dramatic decline in the “real wage” and the increase in the rate of poverty in Nigeria. Once considered a “middle income” country, Nigeria now has 70 percent of its population living on less than one U.S. dollar a day, and 90 percent on less than two U.S. dollars a day (UN Development Program statistics from its website). 22. Rosemary Galli and Ursula Frank, “Structural Adjustment and Gender in Guinea Bissau,” in Women Pay the Price: Structural Adjustment in Africa and the Caribbean, ed.


pages: 598 words: 140,612

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier by Edward L. Glaeser

affirmative action, Andrei Shleifer, Berlin Wall, British Empire, Broken windows theory, carbon footprint, Celebration, Florida, clean water, congestion charging, declining real wages, desegregation, different worldview, diversified portfolio, Edward Glaeser, endowment effect, European colonialism, financial innovation, Frank Gehry, global village, Guggenheim Bilbao, haute cuisine, Home mortgage interest deduction, James Watt: steam engine, Jane Jacobs, job-hopping, John Snow's cholera map, Mahatma Gandhi, McMansion, megacity, mortgage debt, mortgage tax deduction, New Urbanism, place-making, Ponzi scheme, Potemkin village, Ralph Waldo Emerson, rent control, RFID, Richard Florida, Rosa Parks, school vouchers, Seaside, Florida, Silicon Valley, Skype, smart cities, Steven Pinker, strikebreaker, Thales and the olive presses, the built environment, The Death and Life of Great American Cities, the new new thing, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, upwardly mobile, urban planning, urban renewal, urban sprawl, William Shockley: the traitorous eight, Works Progress Administration, young professional

Other places in that bottom-ten list, like Detroit or Trenton, have other problems, like crime and unemployment. Real wages—incomes corrected for local prices—are an effective tool for assessing urban amenities. If places have unusually low real wages, then quality of life must be high. If places have unusually high real wages, then something is wrong with those places. Somewhat paradoxically, the decline in real wages in places like New York provides us with the best evidence that, all in all, big-city amenities have become more valuable. In 1970, there was a strong positive relationship between city size and real wages. Real wages increased by 3 percent as area population doubled. The same relationship also held in 1980. In the 1970s, when New York was a battleground, workers had to be given combat pay to put up with the city’s problems.


pages: 278 words: 82,069

Meltdown: How Greed and Corruption Shattered Our Financial System and How We Can Recover by Katrina Vanden Heuvel, William Greider

Asian financial crisis, banking crisis, Bretton Woods, business cycle, buy and hold, capital controls, carried interest, central bank independence, centre right, collateralized debt obligation, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, declining real wages, deindustrialization, Exxon Valdez, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, full employment, housing crisis, Howard Zinn, Hyman Minsky, income inequality, information asymmetry, John Meriwether, kremlinology, Long Term Capital Management, margin call, market bubble, market fundamentalism, McMansion, money market fund, mortgage debt, Naomi Klein, new economy, offshore financial centre, payday loans, pets.com, plutocrats, Plutocrats, Ponzi scheme, price stability, pushing on a string, race to the bottom, Ralph Nader, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, sovereign wealth fund, structural adjustment programs, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, wage slave, Washington Consensus, women in the workforce, working poor, Y2K

Though current inflation rates are about as low as any we’ve seen in the past thirty years, there’s profound worry among bankers and Fedsters that this relative price stability is about to end. Such price hawks are convinced that the U.S. economy cannot grow at a rate faster than 2.5 to 3.0 percent a year—quite slow by historical standards—without lapsing into a sickly inflation. If unemployment gets too low, meaning much below current levels, then workers might develop an attitude problem, and the twenty-year decline in real hourly wages might be reversed, however briefly. Wall Street wants the slow-growth, high-unemployment days of the early 1990s back again, and the Fed seems intent on fulfilling those wishes. But wish fulfillment may not come so easily. History shows that once an economic expansion is under way, it often takes far more sustained and sharp increases in interest rates to slow it down than anyone guesses at first.


pages: 301 words: 89,076

The Globotics Upheaval: Globalisation, Robotics and the Future of Work by Richard Baldwin

agricultural Revolution, Airbnb, AltaVista, Amazon Web Services, augmented reality, autonomous vehicles, basic income, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, commoditize, computer vision, Corn Laws, correlation does not imply causation, Credit Default Swap, David Ricardo: comparative advantage, declining real wages, deindustrialization, deskilling, Donald Trump, Douglas Hofstadter, Downton Abbey, Elon Musk, Erik Brynjolfsson, facts on the ground, future of journalism, future of work, George Gilder, Google Glasses, Google Hangouts, hiring and firing, impulse control, income inequality, industrial robot, intangible asset, Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, knowledge worker, laissez-faire capitalism, low skilled workers, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, Metcalfe’s law, new economy, optical character recognition, pattern recognition, Ponzi scheme, post-industrial society, post-work, profit motive, remote working, reshoring, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Reagan, Second Machine Age, self-driving car, side project, Silicon Valley, Skype, Snapchat, social intelligence, sovereign wealth fund, standardized shipping container, statistical model, Stephen Hawking, Steve Jobs, supply-chain management, TaskRabbit, telepresence, telepresence robot, telerobotics, Thomas Malthus, trade liberalization, universal basic income

Japan’s Missing Backlash The Services Transformation hit Japan as hard as any nation on earth. Maybe even harder since its economy was so reliant on manufacturing. Japan’s thirty glorious years, which were more glorious than Europe’s and America’s, were followed by the “Lost Decades.” Indeed, Japan has suffered one of the longest economic crises in history. Its economy actually shrank by a fifth between 1995 and 2007. Part of this came from falling prices and a declining workforce, but real wages did fall by 5 percent. Despite the economic hard times, the Japanese people are pro-globalization. A recent Pew Research poll found that 58 percent of Japanese agreed that involvement in the global economy “is a good thing because it provides Japan with new markets and opportunities for growth.” Only 32 percent said that “it is a bad thing because it lowers wages and costs jobs.”19 The key difference between the United States and Japan, in my view, is the cohesiveness of the society.


The-General-Theory-of-Employment-Interest-and-Money by John Maynard Keynes

bank run, business cycle, collective bargaining, declining real wages, delayed gratification, full employment, invisible hand, laissez-faire capitalism, marginal employment, means of production, moral hazard, Paul Samuelson, price stability, profit motive, quantitative easing, secular stagnation, The Wealth of Nations by Adam Smith, working-age population

V There remains the question whether the mistake lies in the approximate identification of marginal cost with price, or rather in the assumption that for output as a whole they bear a more or less proportionate relation- Appendix   3 367 ship to one another irrespective of the intensity of output. For it may be the case that the practical workings of the laws of imperfect competition in the modern quasi-competitive system are such that, when output increases and money wages rise, prices rise less than in proportion to the increase in marginal money cost. It is scarcely likely, perhaps, that the narrowing gap could be sufficient to prevent a decline in real wages in a phase in which marginal real cost was increasing rapidly. But it might be sufficient to offset the effect on real wages of a modest rise in marginal real cost, and even to dominate the situation in the event of the marginal real cost curve proving to be almost horizontal over a substantial portion of its relevant length. It is evidently possible that some such factor should exist. It might be, in a sense, merely an extension of the stickiness of prices of which we have already taken account in II above.


pages: 360 words: 101,038

The Revenge of Analog: Real Things and Why They Matter by David Sax

Airbnb, barriers to entry, big-box store, call centre, cloud computing, creative destruction, death of newspapers, declining real wages, delayed gratification, dematerialisation, deskilling, Detroit bankruptcy, Elon Musk, Erik Brynjolfsson, game design, hypertext link, informal economy, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kickstarter, knowledge economy, low cost airline, low skilled workers, mandatory minimum, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Minecraft, new economy, Nicholas Carr, Peter Thiel, Ponzi scheme, quantitative hedge fund, race to the bottom, Rosa Parks, Second Machine Age, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Steve Jobs, technoutopianism, Travis Kalanick, upwardly mobile, Whole Earth Catalog

Her brother, on the other hand, was a diesel mechanic who could fix anything, and had to shoot coyotes and scavenge roadkill just to feed his family. “That’s fucked-up,” she said, downing a shot of Jameson. “We put our value in technology jobs and forget those who built things. We treat them as inferior. If we continue that, our country is fucked.” The facts are on Haimerl’s side. In America and other industrialized nations, job creation has been steadily declining, along with real wages (on an inflation-adjusted basis). The GDP per person is down, inequality is up, and labor’s share of capital (the percentage of GDP that goes to workers) has steadily eroded. For all its wealth creation and gains, the digital economy, as it stands, has not delivered any substantive gains in employment and wages. Technology is surely not to blame for all of this, but it does play a significant role.


pages: 385 words: 101,761

Economic Origins of Dictatorship and Democracy by Daron Acemoğlu, James A. Robinson

Andrei Shleifer, British Empire, business cycle, colonial rule, conceptual framework, constrained optimization, Corn Laws, declining real wages, Edward Glaeser, European colonialism, Gunnar Myrdal, income inequality, income per capita, invisible hand, Jean Tirole, John Markoff, Kenneth Rogoff, land reform, minimum wage unemployment, Nash equilibrium, Nelson Mandela, oil shock, open economy, Pareto efficiency, rent-seeking, strikebreaker, total factor productivity, transaction costs, Washington Consensus, William of Occam, women in the workforce

Although the serfs had been freed in 1865, there were still many restrictions on their abilities to buy land or move, and conditions in the factories of the newly industrializing cities were very harsh. Attempts by workers to form trade unions were resisted by the factory owners. In 1903, a priest named Father Georgi Gapon succeeded in forming the Assembly of Russian Workers. Within a year, it had more than nine thousand members. Gapon’s movement gathered momentum in 1904 when rapid inflation caused by the war against Japan (which had started in February) led to a 20 percent decline in real wages. When four members of the Assembly of Russian Workers Commitment Problems 141 were dismissed at the Putilov Iron Works, Gapon called for industrial action. Over the next few days, more than 110,000 workers in St. Petersburg went on strike. In an attempt to settle the dispute, Gapon made a personal appeal to Nicholas II and in January 1905 he drew up a petition outlining the workers’ sufferings and demands.


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A Pelican Introduction: Basic Income by Guy Standing

bank run, basic income, Bernie Sanders, Bertrand Russell: In Praise of Idleness, Black Swan, Boris Johnson, British Empire, centre right, collective bargaining, cryptocurrency, David Graeber, declining real wages, deindustrialization, Donald Trump, Elon Musk, Fellow of the Royal Society, financial intermediation, full employment, future of work, gig economy, Gunnar Myrdal, housing crisis, hydraulic fracturing, income inequality, intangible asset, job automation, job satisfaction, Joi Ito, labour market flexibility, land value tax, libertarian paternalism, low skilled workers, lump of labour, Mark Zuckerberg, Martin Wolf, mass immigration, mass incarceration, moral hazard, Nelson Mandela, offshore financial centre, open economy, Panopticon Jeremy Bentham, Paul Samuelson, plutocrats, Plutocrats, precariat, quantitative easing, randomized controlled trial, rent control, rent-seeking, Sam Altman, self-driving car, shareholder value, sharing economy, Silicon Valley, sovereign wealth fund, Stephen Hawking, The Future of Employment, universal basic income, Wolfgang Streeck, women in the workforce, working poor, Y Combinator, Zipcar

The twentieth-century income distribution system has broken down, as globalization has swept forward, as ‘neo-liberal’ economics has done its work, and as the technological revolution has facilitated transformative changes in labour markets. One outcome has been a growing ‘precariat’, consisting of millions of people facing unstable, insecure labour, a lack of occupational identity, declining and increasingly volatile real wages, loss of benefits and chronic indebtedness. The shares of national income going to ‘capital’ and ‘labour’ used to be roughly stable; that old consensus has gone. We are in a Second Gilded Age, in which more and more income is going to a minority of ‘rentiers’ who are thriving from the proceeds of property – physical, financial and ‘intellectual’. This has no moral or economic justification.


pages: 394 words: 85,734

The Global Minotaur by Yanis Varoufakis, Paul Mason

active measures, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, business climate, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, correlation coefficient, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, debt deflation, declining real wages, deindustrialization, endogenous growth, eurozone crisis, financial innovation, first-past-the-post, full employment, Hyman Minsky, industrial robot, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, light touch regulation, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, market fundamentalism, Mexican peso crisis / tequila crisis, money market fund, mortgage debt, Myron Scholes, negative equity, new economy, Northern Rock, paper trading, Paul Samuelson, planetary scale, post-oil, price stability, quantitative easing, reserve currency, rising living standards, Ronald Reagan, special economic zone, Steve Jobs, structural adjustment programs, systematic trading, too big to fail, trickle-down economics, urban renewal, War on Poverty, WikiLeaks, Yom Kippur War

The idea was not to discount all other explanations but, rather, to provide a platform for combining many different explanations, each valid in its own way, into an overarching analysis of the global ‘arrangement’ that crashed and burned in 2008, leaving our world in a state of stunned disenchantment. The Global Minotaur metaphor crept up on me in 2002, after endless conversations with friend, colleague and co-author Joseph Halevi. Our discussions on what made the world tick after the 1970s’ economic crises produced a coherent, albeit complex, view of the global economic system in which America’s deficits, Wall Street and the ever-declining real value of American wages, played a defining and, paradoxically, a hegemonic role. The gist of our argument was that the defining characteristic of the post-1971 era was a reversal of the flow of trade and capital surpluses between the United States and the rest of the world. The hegemon, for the first time in world history, strengthened its hegemony by wilfully enlarging its deficits. The trick was to understand how America accomplished this and the tragic manner in which its success gave rise to the financialization which both reinforced US dominance and, simultaneously, implanted the seeds of its potential downfall.


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The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

In particular, the precariat is living on the edge of unsustainable debt, knowing that one accident, illness or financial mistake could unleash a spiral leading to homelessness, dependence on charity, alcoholism, drug addiction and other social illnesses. Maurizio Lazzarato, an Italian sociologist, has depicted ‘an indebted subjectivity’ – a sense of facing infinite debt that feeds into a psyche of nervousness and social passivity.6 Among the causes of mass indebtedness is a historically unique situation: people are trying to maintain a past living standard in the context of declining and more volatile real wages. Since the establishment of capitalism, society has been conditioned to expect that each generation will have a higher average standard of living than its predecessors. This is no longer the case. Our perceived needs are formed by our life experience, by the living standard attained by our parents and our peers, who set the income and consumption aspirations of each generation.


The Great Turning: From Empire to Earth Community by David C. Korten

Albert Einstein, banks create money, big-box store, Bretton Woods, British Empire, business cycle, clean water, colonial rule, Community Supported Agriculture, death of newspapers, declining real wages, different worldview, European colonialism, Francisco Pizarro, full employment, George Gilder, global supply chain, global village, God and Mammon, Hernando de Soto, Howard Zinn, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, joint-stock company, land reform, market bubble, market fundamentalism, Monroe Doctrine, Naomi Klein, neoliberal agenda, new economy, peak oil, planetary scale, plutocrats, Plutocrats, Project for a New American Century, Ronald Reagan, Rosa Parks, sexual politics, shared worldview, social intelligence, source of truth, South Sea Bubble, stem cell, structural adjustment programs, The Chicago School, trade route, Washington Consensus, wealth creators, World Values Survey

Hardisty and Clarkson each underscore the essential distinction between the followers of the New Right, who are struggling with legitimate concerns, and the leaders of the New Right, who manipulate those concerns for political advantage.19 226 PART III: AMERIC A, THE UNFINISHED PROJECT Exploiting Family Breakdown The New Right has been brilliantly successful in restoring the imperial status quo in relations between the owning and the working classes. Since 1983, nearly all the gains from economic growth have gone to the very richest Americans as union membership has declined and the real wages of working people have fallen. As the wages of a typical male worker fell below the level required to support a family, women who earlier had begun to experience a new sense of freedom found that workplace participation was no longer a choice but a necessity. Many were forced into jobs paying less than a living wage. They no longer had the time or energy to prepare homecooked meals and care for their own children.


Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe van Parijs, Yannick Vanderborght

"Robert Solow", Airbnb, Albert Einstein, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, centre right, collective bargaining, cryptocurrency, David Graeber, declining real wages, diversified portfolio, Edward Snowden, eurozone crisis, Fall of the Berlin Wall, feminist movement, full employment, future of work, George Akerlof, illegal immigration, income per capita, informal economy, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Marshall McLuhan, means of production, minimum wage unemployment, open borders, Paul Samuelson, pension reform, precariat, price mechanism, profit motive, purchasing power parity, quantitative easing, race to the bottom, road to serfdom, Second Machine Age, secular stagnation, selection bias, sharing economy, sovereign wealth fund, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, universal basic income, urban planning, urban renewal, War on Poverty, working poor

Fund i ng, E xper i men ts, and Trans itions Â� Those favoring VAT to fund a basic income sometimes argue that compared to taxing income, taxing consumption Â�will reduce the cost of Â�labor and preserve work incentives. But this is largely due to a short-Â�term illusion. Raising a consumption tax Â�will tend to boost prices and thereby reduce real wages. Why would the relative scarcities and bargaining powers that boost the cost of Â�labor if workers’ incomes are taxed more not also operate as a result of a higher taxation of their consumption? Why would the supply of Â�labor be affected by a decline in marginal real wages if caused by lower postÂ�tax wages and not if caused by higher prices? If Â�there is a systematic difference in impact on the cost of Â�labor and work incentives between funding through VAT and funding through income tax, therefore, it can only be to the extent that VAT manages de facto to capture a broader spectrum of incomes at the point of spending than income tax does at the point of earning.61 Â�There is no fundamental reason for rejecting a VAT or another form of sales tax as a way of funding a basic income, but no fundamental reason for adopting it, Â�either.


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Big Debt Crises by Ray Dalio

Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, break the buck, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, declining real wages, European colonialism, fiat currency, financial innovation, German hyperinflation, housing crisis, implied volatility, intangible asset, Kickstarter, large denomination, manufacturing employment, margin call, market bubble, market fundamentalism, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Northern Rock, Ponzi scheme, price stability, private sector deleveraging, purchasing power parity, pushing on a string, quantitative easing, refrigerator car, reserve currency, short selling, sovereign wealth fund, too big to fail, transaction costs, universal basic income, value at risk, yield curve

Devaluations also cause assets to rise in value when measured in local currency, and they attract capital from abroad as a country’s financial assets become cheaper in global currency terms. From July 1919 through March 1920, the decline in the mark and negative real rates provided a boost to the German economy and its equity and commodity markets. The export industry also thrived, unemployment declined, and as real wages remained low, business profitability improved. You can see the decline in unemployment and the pickup in exports in the charts below. (Note that all unemployment statistics from the time only show unemployment among trade union members, so they likely understate the true amount of unemployment and hardship in German society. However, they do show that employment conditions were improving.)


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The Long Twentieth Century: Money, Power, and the Origins of Our Times by Giovanni Arrighi

anti-communist, Asian financial crisis, barriers to entry, Bretton Woods, British Empire, business climate, business process, colonial rule, commoditize, Corn Laws, creative destruction, cuban missile crisis, David Ricardo: comparative advantage, declining real wages, deindustrialization, double entry bookkeeping, European colonialism, financial independence, financial intermediation, floating exchange rates, income inequality, informal economy, invisible hand, joint-stock company, Joseph Schumpeter, late capitalism, London Interbank Offered Rate, means of production, money: store of value / unit of account / medium of exchange, new economy, offshore financial centre, oil shock, Peace of Westphalia, profit maximization, Project for a New American Century, RAND corporation, reserve currency, spice trade, the market place, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, trade route, transaction costs, transatlantic slave trade, transcontinental railway, upwardly mobile, Yom Kippur War

On the other hand, as surplus capital moved ever more massively out of trade and production, the enterprises that either could not or chose not to move out of trade and production found themselves relieved of the competitive pressures that had been curtailing their profit margins. This relief materialized from the 1880s onward in a steady improvement in Britain’s terms of trade. But its most important manifestation was the overall decline of British real wages after the mid-1890s, which reversed the rapidly rising trend of the previous half-century (Saul 1969: 28-34; Barrat Brown 1974: table 14): Arguing . . . in terms of the power of organized labor, it might be suggested that during the highly competitive environment of falling prices, unions were able to squeeze profits between stable wages and market-controlled prices. . . . But when the trend of prices was reversed in the less competitive environment after 1900 even strong unions could only push up the whole cost and price 178 THE LONG TWENTIETH CENTURY structure, and prices and profits kept pace with wages.


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Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined by Lasse Heje Pedersen

activist fund / activist shareholder / activist investor, algorithmic trading, Andrei Shleifer, asset allocation, backtesting, bank run, banking crisis, barriers to entry, Black-Scholes formula, Brownian motion, business cycle, buy and hold, buy low sell high, capital asset pricing model, commodity trading advisor, conceptual framework, corporate governance, credit crunch, Credit Default Swap, currency peg, David Ricardo: comparative advantage, declining real wages, discounted cash flows, diversification, diversified portfolio, Emanuel Derman, equity premium, Eugene Fama: efficient market hypothesis, fixed income, Flash crash, floating exchange rates, frictionless, frictionless market, Gordon Gekko, implied volatility, index arbitrage, index fund, interest rate swap, late capitalism, law of one price, Long Term Capital Management, margin call, market clearing, market design, market friction, merger arbitrage, money market fund, mortgage debt, Myron Scholes, New Journalism, paper trading, passive investing, price discovery process, price stability, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, Renaissance Technologies, Richard Thaler, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, selection bias, shareholder value, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stocks for the long run, stocks for the long term, survivorship bias, systematic trading, technology bubble, time value of money, total factor productivity, transaction costs, value at risk, Vanguard fund, yield curve, zero-coupon bond


Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs, Arthur A. Ekirch, Jr.

Alistair Cooke, American ideology, business cycle, clean water, collective bargaining, creative destruction, credit crunch, declining real wages, endowment effect, fiat currency, fixed income, full employment, hiring and firing, income per capita, Jones Act, Joseph Schumpeter, laissez-faire capitalism, manufacturing employment, means of production, minimum wage unemployment, plutocrats, Plutocrats, post-industrial society, price discrimination, profit motive, rent control, rent-seeking, Richard Thaler, road to serfdom, Ronald Reagan, Sam Peltzman, Simon Kuznets, strikebreaker, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, transcontinental railway, union organizing, Upton Sinclair, War on Poverty, Works Progress Administration

(Apparently accomplishing nothing of substance, they inspired J. K. Galbraith to invent the amusing and insightful concept of the "no-business meeting.")lO But it is possible-one cannot know for sure-that the meetings did have an important effect, ironically a harmful effect. From the employers attending his conferences the President extracted a promise not to cut wages any faster than the cost of living declined. He believed that real wage cuts, besides being unfair and productive of strife, would reduce consumer purchasing power and thereby exacerbate the recession. Whether because of fidelity to the President or for other reasons, many employers did not reduce money wages much until well into 1931. Meanwhile deflation proceeded apace. Workers who continued to receive the same money wage were getting an increasingly 164 History higher real wage.


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