Tags: Reich | jobs | pay | wages

Robert Reich: We Can Create More Better-Paying Jobs

Thursday, 13 Jun 2013 09:36 AM

By Michael Kling

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While other nations are creating good-paying jobs and increasing incomes for their workers, the United States has failed to create a strategy to create widespread prosperity and descent-paying jobs, laments former Labor Secretary Robert Reich.

Many believe globalization and technological changes mean stagnant wages for a large portion of American workers. The solution, they say, is to withdraw from the global economy.

"That's dead wrong. Economic isolationism and neo-Ludditism would reduce everyone's living standards," Reich writes on his blog.

Editor's Note:
Economist Warns: 50% Unemployment, 100% Inflation Possible

There are many ways to create good-paying jobs, argues Reich, a professor at the University of California, Berkeley.

Nations such as Singapore, South Korea and China are creating more jobs with higher wages.

But not the United States.

Why not?

"Both because we don’t have the political will to implement them, and we’re trapped in an ideological straightjacket that refuses to acknowledge the importance of such a strategy," he explains

Reich suggests a job-creation strategy that would include early-childhood education and near-free higher education in order to increase jobs and wages. In addition, public education financing would need to be changed.

Local public schools are largely financed by local property taxes even though people are geographically segregated by income, and higher education is funded through huge amounts of student debt that may not be repaid. Those policies don't make sense, he contends.

Creating better jobs calls for schools and universities to provide better education, not just better test scores, Reich argues.

"The only sure thing standardized tests measure is the ability to take standardized tests. Yet the new economy demands problem solving and original thinking, not standardized answers."

Reich also suggests unionizing low-wage service workers and providing them better wages, raising the minimum wage and expanding the Earned Income Tax Credit.

"There's no magic bullet for regaining good jobs and no precise contours to what such a national economic strategy might be," Reich states, "but at the very least we should be having a robust discussion about it. Instead, economic determinists seem to have joined up with the free-market ideologues in preventing such a conversation from even beginning."

Erik Brynjolfsson, a professor at the MIT Sloan School of Management, argues that advances in computer technology, such as improved industrial robotics and automated translation services, are causing the slow employment growth, stagnating incomes and growing inequality.

"It’s the great paradox of our era," he says, according to MIT Technology Review.

"Productivity is at record levels, innovation has never been faster and yet at the same time, we have a falling median income and we have fewer jobs. People are falling behind because technology is advancing so fast and our skills and organizations aren’t keeping up."

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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