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How ‘structural reforms’ of labour markets harm innovation

Paul Mason pointed out recently that the dire state of wages growth in the UK meant that it was cheaper to have people in low wage dead end jobs like washing cars than having a machine do it. Poverty level wages with no way out.

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This research report from Alfred Kleinknecht examines that fact in the light of “structural reform”pursued in many countries since the 1980s.  Structural reforms of labour markets frustrate the diffusion of labour-saving technologies. Moreover, they damage the functioning of the ‘creative accumulation’ innovation model that depends on the long-run accumulation of firm-specific knowledge. It is not by accident that the champions of ‘structural reforms’ of the 1980s (i.e. the US, the UK, Australia or New Zealand) show persistently lower rates of labour productivity growth when compared to countries in ‘Old Europe’ and have problems competing in classical industries.

Strikes Aren’t for the Privileged

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The claim that strikes are reflections of privilege is totally disconnected from the history of women’s labor organizing in the US. by Kate Aronoff

In discussing the historical precedents for Wednesday’s strike, several writers have pointed to recent actions abroad — like those in Iceland and Poland — and a 1970 women’s strike for equality in the workplace, organized by America’s National Organization for Women. American history, however, is rife with examples of women striking as workers, at considerable risk to their lives and livelihoods. Following mining and the building trades, for instance, the textile industry — staffed almost entirely by women — was the third most strike-prone industry in the country in the early 20th century. Here are just a few examples of women who walked off the job.

The Rise of the Intern Economy

Internships and the Informalization of Labour in Italy by Marco Marrone

There is an increasing tendency around the world to hire interns, often
without pay and with very little possibility of achieving a real education
or a stable job. In the last few years, the rise of the intern economy has
attracted the attention of journalists and activists.
On one hand, in fact, it allows companies to make use of internships to avoid employer

responsibilities, including that of paying a salary. On the other hand, the obscuring of interns’ productivity (in terms of work) by educational aims operates as a narrative that increases their motivation and flexibility. In other words, the perspective of the informal economy not only seems to help us to understand the lack of recognition of interns’
working activities, but also to understand why the internship is crucial for contemporary capitalism.
Specifically, it is the possibility of obtaining a cheap, docile and motivated labour force that makes the internship one of the assets that capitalism is looking at with a growing interest. Moreover, such a mechanism does not seem limited only to internships. Thus, understanding the rise of internships as part of the growth of informal labour makes the internship a useful lens through which to examine the transformation of the labour market and the most predatory tendencies of contemporary capitalism.

German Economy Ministry Backs Up OECD Call For Public Investment Stimulus

The German Ministry for Economic Affairs and Energy  has actually published an article that insists that there is a wide consensus in the economic literature that public investments do not just trigger a short-term demand effect but can also improve growth performance over the longer term. This then leads the authors to recognise that, because of the positive feedback effects on tax revenues, even (yes, even!) a deficit-financed public investment stimulus can result in improved public finances, certainly against the background of historically low interest rates.

Can We Fix Capitalism in the Age of Trump and Brexit?

Mariana Mazzucato, Professor of the Economics of Innovation at the Science Policy Research Unit of the University of Sussex and author of The Entrepreneurial State: debunking public vs. private sector myths, has made a passionate case for the government’s active role in the economy  —sending the old laissez faire notion that markets can run themselves into the dustbin where it belongs. In a new book co-edited with Michael Jacobs, Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth, she offers a bold new vision for contemporary capitalism that works for the people and the planet. What chance does this vision have in the age of Trump and Brexit? Mazzucato shares her view in this interview with Lynn Parramore

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“If we want growth today to be more innovation-driven, more inclusive and more sustainable, then we need a more active state — not a less active one. Yet we still hear the dogma that we should just fix market failure by focusing on science and infrastructure, and to ‘level the playing field.’”

Transitioning to Clean Energy Would Create More Jobs than Fossil Fuels

An interview from The Real News Network with Heidi Garrett-Peltier on why more and better jobs will come from transitioning NOW to clean energy

“when we look at the economy as a whole, the transition to clean energy creates many more jobs in renewable energy industries and energy efficiency industries and all of the supply chain that goes into those industries. So many more jobs are created than the number of jobs that are lost in fossil fuels but that doesn’t mean that there aren’t potential hardships for the people in the communities that are dependent on fossil fuel employment. So, one of the things that we’re actually working on here at the research institute, at PERI, is that the concept of a just transition. So what does it mean for people and communities who are dependent on fossil fuels for their living, for their livelihoods. For some it means retraining and having enough funding from the federal government to provide retaining especially for people who are earlier in their careers. For people who are later in their careers and closer to retirement age, it might mean an earlier retirement. But there are implications for specific individuals and communities. But the other thing to keep in mind is that clean energy jobs can be created in many different communities. So there are specific renewable energies that need to be in places where there is more sunlight or more wind. But if we think about something like weatherizing homes or making commercial buildings more energy efficient, those kinds of instillation, construction jobs and the manufacturing jobs creating those energy efficient technologies and renewable energy technologies, those can be situated anywhere. So if we are thinking of this really holistically in terms of where the clean energy industry as a whole is going and we think specifically about the impacts on communities that stand to lose jobs, we can stand to lose some of these manufacturing plants in those communities and also the weatherization and energy efficiency sort of where it will happen economy wide in all communities since there are building everywhere that are inefficient. So that offsets some of the job loss. ”

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Heidi Garrett-Peltier holds a Ph.D. in Economics from the University of Massachusetts, Amherst and works as an assistant research professor for Political Economy Research Institute (PERI). Her research focuses on the employment impacts of public and private investments, particularly in the realm of clean-energy programs. Heidi has written and contributed to a number of reports on the clean energy economy (see Recent publications, below). She has also written about the employment effects of defense spending with co-author Robert Pollin, consulted with the U.S. Department of Energy on federal energy programs and is an active member of the Center for Popular Economics.

More here on US policy (Trump and Clinton)

Paying for public services, in a monetary sovereign state

If our national Government was to spend more than the currently budgeted amount on your health care system next year, it would be good to know how they would finance that spending. It is a question…

Source: Paying for public services, in a monetary sovereign state