The UN published a report yesterday that says it will take five years for global employment to return to 2007 levels. The reasons offered are not very specific, but it is mentioned that the stimulus packages that have been used have–generally–not been focused on job growth.
An increase in social unrest is predicted, with Europe already experiencing strikes, and protests in some Asian countries.
About 23 million jobs need to be created, and this is their advice about how to do it–
To increase employment, governments need to focus on measures like training, raise the spending power of those with jobs in emerging economies through wage increases and enact far-reaching financial reform, according to the labor organization, a United Nations agency.
Economists generally endorsed the findings of the report, but they noted that if any of the recommendations were simple to achieve, they would have been put in place long ago.
The article is a bit critical of the policy suggestions, observing that training does not necessarily lead to job creation, and wage increases might leave firms with less money to hire new people.
I believe the world needs to accept a Scandinavian style of wealth redistribution. Economists have long dismissed the possibility that wealth suffers from diminishing returns, but I have no doubt that a dollar means more to a very poor man than to the rich. It could lead to more employment as the poor are more likely to spend their income. Even if it does not, it will allow more people to live with some level of dignity.
Is Another Economics Possible–This article attracted my attention because I have been thinking, for a couple of years now, that another economics is necessary.
Disappointment followed as I read through the article. The views described are those of the World Social Forum, “based on more cooperative, sustainable, egalitarian and democratic institutions than those favored at (the World Economic Forum in) Davos, Switzerland.”
Textbook economics treats individuals as selfish optimizers, unconcerned about the welfare of others. Only recently have economists begun to explore the importance of fairness, reciprocity and altruism, and to consider the possibility that incentives to behave selfishly can undermine both moral norms and altruistic preferences.
Textbook economics also largely ignores worker-owned businesses and consumer cooperatives, although these are geographically widespread in the United States. Recent research suggests that many workers would like to play a larger role in the management of their companies and that “shared capitalism” works remarkably well.
Of course these views are only valid for a superficial sort of economics. In real economics, being a “selfish optimizer” includes our desires to help our friends and communities.
While I like the idea of encouraging cooperative enterprise and egalitarianism, those are not new ideas and there is not a new economics being introduced. only old ideals reborn.
A new economics needs to explain how the world’s markets are working, and how government policy can help or hurt social welfare. My opinion? We need to get away from the Keynesian measures of growth and employment. They are not the best measures of welfare and happiness and satisfaction with our lives. Ultimately, those are much more important than how much money and stuff we have.
Some of this story about the Chinese bullet trains is really impressive.
The Chinese bullet train, which has the world’s fastest average speed, connects Guangzhou, the southern coastal manufacturing center, to Wuhan, deep in the interior. In a little more than three hours, it travels 664 miles, comparable to the distance from Boston to southern Virginia. That is less time than Amtrak’s fastest train, the Acela, takes to go from Boston just to New York.
Even more impressive, the Guangzhou to Wuhan train is just one of 42 high-speed lines recently opened or set to open by 2012 in China. By comparison, the United States hopes to build its first high-speed rail line by 2014, an 84-mile route linking Tampa and Orlando, Fla.
OK, bragging rights over the US are one thing, but the really impressive part is the economic stimulus this investment provides for both short term and long.
Of course jobs are being created now with the construction of the trains and tracks, but the new, fast transport will also improve the mobility of labor and other resources needed in an expanding economy.
(Don’t forget to visit alphainventions.com)