Tuesday, December 19, 2017

Tuesday Morning Links

This and that for your Tuesday reading.

- Ryan Avent discusses how wage stagnation is harming U.S. productivity - and how a shift toward empowering workers could be the solution to both:
If low wages are indeed inhibiting productivity, what can we do about it? A large corporate tax cut is unlikely to help. In an economy in which large firms enjoy market power while workers have none, such cuts will raise stock prices and dividends rather than wages and investment. Big increases in the minimum wage would certainly give companies an incentive to automate, but at the cost of jobs for the most vulnerable workers.

A better strategy would be to shift power from companies to workers, to allow workers to bargain for a bigger share of the gains from growth. Keeping companies from getting too big and too dominant would make a difference by increasing the number of companies competing for workers and the competitive pressure they face to maximize worker output.

Making it easier for workers to unionize would improve productivity, too. A strong labor movement, were one magically to appear, could bargain for higher pay, potentially pushing firms to invest in workers and new technology.

Perhaps most important, we should not allow a low unemployment rate to fool us into thinking that labor is scarce. The Fed should wait for much faster wage growth before taking steps to slow the economy. Governments at all levels should make sure that schools and agencies are fully staffed with qualified workers. And Congress should turn its attention to public investments, rather than counting on tax cuts to motivate private ones. Large-scale infrastructure spending would increase the economy’s growth potential while creating good jobs. So would concerted efforts to make postsecondary education as accessible and affordable as possible.
- Katie McDonough reports on the confirmation from U.S. executives that they plan to hoard the proceeds of any Republican tax giveaway. And the New York Times' editorial board discusses how a bill which can't be explained as anything but a service to greedy donors reflects unacceptable inequality in both wealth and political power, while Jared Bernstein focuses on the distortionary effect of big money in politics in arguing for public financing.

- Andrew Jackson writes about Canada's own persistent wealth inequality. Zoe Williams comments on the juxtaposition of massive corporate bonuses handed to executives who have enriched themselves and their shareholders by keeping housing unaffordable for people. And James Bloodworth offers a look at some of the regions of the UK which are being left behind.

- Finally, Zaid Jilani and Evan Malmgren each discuss how the end of Net neutrality in the U.S. may represent the beginning of a push for publicly-operated internet service providers.

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