Thursday, June 28, 2007

Check out VPIRG's new Rap on Global Warming

The minds behind the popular '802' rap video have struck again, and this time they're targeting Governor Douglas, the global warming legislation he vetoed and the state legislature. Click here to see the serious and seriously funny YouTube video 'CO2'.

Wednesday, June 27, 2007

Wal-Mart's reliance on Chinese imports costs U.S. jobs



Economic Snapshot for June 27 by Robert E. Scott

China's entry into the World Trade Organization was supposed to improve the U.S. trade deficit with China and create good jobs in the United States. But those promises have gone unfulfilled: the total U.S. trade deficit with China reached $235 billion in 2006. Between 2001 and 2006, this growing deficit eliminated 1.8 million U.S. jobs (Scott 2007). The world's biggest retailer, U.S.-based Wal-Mart was responsible for $27 billion in U.S. imports from China in 2006 and 11% of the growth of the total U.S. trade deficit with China between 2001 and 2006. Wal-Mart's trade deficit with China alone eliminated nearly 200,000 U.S. jobs in this period (See Chart).

The manufacturing sector and its workers were hardest hit by the growth of Wal-Mart's imports. Wal-Mart's increased trade deficit with China eliminated 133,000 manufacturing jobs, 68% of all jobs lost. Overall, the Wal-Mart trade deficit displaced and 308,100 jobs in 2006. On average, 77 U.S. jobs were eliminated for each one of Wal-Mart's 4,022 U.S. stores in 2006. (See The Wal-Mart Effect for more details.)

Wal-Mart's huge reliance on Chinese imports illustrates that many powerful economic actors in the United States benefit from China's policy of maintaining an undervalued yuan, its abuse of labor rights, and other fair-trade norms. Wal-Mart's benefit, however, is not the country's gain, as these policies have contributed directly to the ever-growing trade deficit that imperils future economic growth.

Scott, Robert E. 2007. Costly Trade with China: Millions of U.S. Jobs Displaced with Net Job Loss in Every State. Briefing Paper. Washington, D.C.: Economic Policy Institute.

Friday, June 8, 2007

Correcting Douglas Administration Misinformation on VT Job Losses

Response to Kevin Dorn, Vermont’s Secretary of Commerce and Community Development's defensive outburst in Seven Days regarding job losses and the Douglas administration signing onto failed trade policies:

Thank you for the recent article on trade and jobs ("Labor Department Links Free Trade to Vermont Job Losses", Seven Days, 5/30/07).

It reminded us of the human costs of globalization as thousands of Vermont families are suffering from trade-related job losses. It exposed the hype about the purported benefits of international trade by providing facts instead of anecdotes. And it called the Governor to account for committing Vermont to "free" trade agreements without any input from the Legislature.

Commerce Sec. Dorn's letter in response criticized Sen. Ginny Lyons, Dan Brush, and myself for being "partisan" and for "selectively us[ing] statistics". But there's nothing partisan about Vermonters losing their jobs. And while we referred to data from the Vermont Dept. of Labor, Sec. Dorn referred to a biased report by the U.S. Business Roundtable that used outrageous methodology. It counted jobs related to receiving goods shipped into the U.S. as "trade" jobs. And by the way, the Dept. of Labor only reported jobs lost to trade since 2003 (1,700). This trend began long before then.

And Secretary Dorn is wrong to suggest that the Governor has no authority in matters of federal trade agreements. The law allows a governor to opt out of trade provisions regarding state procurement laws. Indeed, only 19 governors signed their states onto CAFTA's procurement provisions. The Governor effectively gave away an important piece of our sovereignty without bothering to consult with the Legislature.

Trade can be beneficial but it is certainly not without risk. Many economists are fond of saying that lower prices at Wal-Mart are worth the cost in lost jobs and lower wages. Easy for them to say, we haven't outsourced their jobs yet.

Doug Hoffer

Monday, June 4, 2007

Productivity-Pay Gap - Reality check for VT CFED


excerpt from:Testimony before the Labor-HHS Education Subcommittee, Appropriations Committee, U.S. House of Representatives
By Lawrence Mishel

The Productivity-Pay Gap
...our policy discussion must be situated in the reality that our nation is not generating broadly shared prosperity even though we have seen relatively fast productivity growth that provides the basis for rapidly rising incomes. It is easy to see that the group that has benefited most from economic growth has been the top 1%, who obtained about 10% of all market-based incomes in 1980 but who by 2004 (the latest data) had doubled their income share to about 20%.1 Income inequality has certainly risen substantially since 2004, so we probably have the most income inequality since before the great depression, seventy-seven years ago. In contrast, the typical working family has less income now than it did in 2000, as their incomes have fallen $3000, or 5.4%.

This disparity of results reflects the fundamental economic challenge of our time: to repair the disconnect between growing productivity and the pay of the vast majority of the workforce. Since 1995 we have enjoyed a historically fast growth in the goods and service produced per hour worked­or productivity. As Figure 1 shows, the hourly wages for the median worker (who earns more than that of half the workforce but less than the other half) grew in the 1995-2000 period as did the hourly wages of high school and college –educated workers (those with a bachelors degree but no further education). The momentum of the late 1990s wage growth carried over until about 2002 but stalled thereafter. In particular, the inflation-adjusted hourly wages of the typical median worker as well as those of both high school and college-educated workers have been stagnant over the last four years while productivity grew by 11.5%.

Middle-class economic anxieties are also being fueled by an erosion of employer-provided health and pension benefits. In 2005, only 44.1% of the workforce had an employer-provided pension plan, a drop from the 48.3% who did so in 2000. The share of the workforce that had employer-provided health insurance in 2005 was 54.9 % in 2005, lower than the 58.9% share in 2000 and far below the 69.0% who received such coverage in 1979. The extent of the erosion of benefits can most readily be seen in the fact that only about a third of the jobs obtained by recent high school graduates provide health insurance; in contrast, in 1979 about two-thirds of recent high school graduates received health insurance in their early jobs. This erosion of benefit coverage can also be seen among recent college graduates: only 63.5% of recent college graduates received health benefits in their entry level jobs, down from over seventy percent (70.6%) in 2000. This erosion of benefit coverage is at the core of the eroding quality of jobs for the vast majority and signals that we can no longer develop health and retirement policies as if we are building on the employment based systems for the simple reason that these systems are unraveling.

‘Wage Deficits’ not ‘Skill Deficits’
It is important to note that these wage and income problems faced by the vast majority do not come because they have skill deficits or because of skill shortages that have hampered our competitiveness. After all, we have had rapid productivity growth for the last ten years with the very same workers who now do not participate in economic growth. Moreover, it is hard to claim that the stagnant wages of college graduates and the failure of new college graduates to locate jobs with benefits is the result of their deficient skills...false claim that a growing wage gap between college-educated and other workers is somehow responsible for the recent growth of income inequality.

No, America’s workers do not face a “skills deficit”: rather, they face a deficit in the wages and benefits that employers provide. This gap between pay and productivity growth is the result of economic and employment policies that shift bargaining power away from the vast majority of us and toward employers and the most well-off. A multitude of factors have contributed to stagnant wages and growing inequality: the steep drop in unionization rates (from 25% in the late 1970s to under 13% today); the failure to raise the real value of the minimum wage, let alone raise it in accordance with productivity (its value has declined by over 25% since the late 1960s); macroeconomic policy that has kept the unemployment rate too high for most of the last 30 years; unfettered globalization and offshoring that increasingly puts U.S. workers in competition with workers around the world; economic deregulation and the privatization of government services; and escalating pay for CEOs. An agenda of accelerated globalization and greater national saving, as some urge, or simply improving skills and education will neither bring the growth needed nor reconnect pay and productivity.