Globalization and the Politics of Pay: Policy Choices in the American StatesGeorgetown University Press, 2006 M05 23 - 248 pages In the American federal system, states actively compete for jobs, business investment, and factory locations. Labor costs have played an important role in such interstate competition since the days of the pre-Civil War plantation economy. In recent years, however, global economic trends have put added pressures on businesses and government to reduce labor costs. At least, that is what most politicians, the media, and the business community believe. Globalization and the Politics of Pay examines the economic, political, and social causes and consequences of declining wages in the United States. It challenges the conventional wisdom that globalization is to blame for the decline in workers' earnings. Susan B. Hansen presents a comprehensive analysis of the many factors affecting labor costs and concludes that many of them result from choices made by the states themselves through the laws and policies they enact. In addition, free-market ideologies and low voter turnout have had greater effects in keeping wages down than globalization. In fact, foreign trade and investment can actually result in higher pay in the state labor market. In this rigorous yet surprising study, Hansen develops new measures of state and federal labor costs to test competing theories of the consequences of reducing wages and benefits. Most economists would argue that higher labor costs cause higher unemployment, and that reducing labor costs will lead to higher levels of job creation. But citizens and elected officials must weigh any employment gains in lower-wage jobs against slower state economic growth, declining personal income, and a less-competitive position in international trade. Cutting state labor costs is shown to have adverse social consequences, including family instability, high crime rates, poverty, and low voter turnouts. The book concludes with policy recommendations for state governments trying to balance their need for more jobs with policies to enhance productivity, living standards, social stability, and international competitiveness. |
Contents
Globalization Interstate Competition and Labor | 1 |
Labor Costs and State Competitiveness | 6 |
Theoretical Foundations | 9 |
Why So Low in the United States? | 11 |
21 | |
Plan of the Book | 23 |
The State Role in Labor Costs | 27 |
Stated and Labor Costs before the New Deal | |
What Matters | 79 |
The Social and Political Consequences of Declining Labor Costs | 81 |
Testing for the Consequences of Trends in State Labor Costs | 84 |
Economic Consequences of Declining Labor Costs | 86 |
Social Consequences of Declining Labor Costs | 88 |
Labor Costs and Population Trends | 90 |
Trends in Voter Turnout and State Labor Costs | 92 |
Policy Consequences and Declining State Labor Costs | 93 |
New Deal Efforts to Nationalize Labor Markets | 1 |
TaftHartley and State RighttoWork Laws | 4 |
Contemporary State Efforts to Restrain Labor Costs | 6 |
Measuring State and Federal Costs | 20 |
What Matters | 25 |
Explaining State Differences in Labor Cost Trends | 27 |
States in the International Economy | 31 |
Economic and Demographic Trends and State Labor Costs | 35 |
State Labor Costs Labor Unions and Partisan Trends | 39 |
Public Preferences and Ideology | 45 |
Voter Turnout and Trends in State Labor Costs | 48 |
Comparing Economic International and Political Factors | 50 |
Conclusion | 55 |
The Economic Effects of Cutting Labor Costs | 59 |
Previous Research on State Labor Costs and Economic Development | 60 |
StateLocal Taxes and State Economics | 65 |
State Economics and Federal Policies | 67 |
Hypotheses Data and Measures | 71 |
The Economic Effects of State Labor Costs | 72 |
Exports FDI and State Economic Trends | 76 |
Conclusion | 77 |
Testing for the Independent Effects of Declining Labor Costs | 95 |
Conclusion | 100 |
What Matters | 101 |
Conclusion Lessons Learned and Policy Options for the States | 103 |
The Economists Preferred Alternative Investment in Human Capital | 105 |
A New Role for Organized Labor? | 111 |
Changing Health Care | 113 |
Increasing Workers Wages | 115 |
Creating Better Jobs | 119 |
European Alternatives to the LowWage Strategy | 121 |
The Triumph of the LowWage Strategy? | 124 |
Policy Recommendations for the States | 131 |
Explaining State Differences in Labor Costs | 133 |
TimeSeries Analysis of State Economic Outcomes 19702000 | 139 |
Analysis of Social Consequences of Declining Labor Costs | 147 |
Data and Sources | 151 |
Notes | 153 |
References | 165 |
Index | 187 |
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Globalization and the Politics of Pay: Policy Choices in the American States Susan B. Hansen No preview available - 2006 |