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Article Artículo

United States

Workers

Private Sector Employment Has Flourished More Under Democrats than Under Republicans

Paul Krugman recently wrote an interesting blog post titled “The Curious Confidence of Charlatans and Cranks” Krugman starts off with an interesting graph showing the total number of private sector payroll jobs gained or lost under each U.S. president from Jimmy Carter to Barack Obama.

While this metric is informative, it is imperfect in at least two ways. First,a president’s track record on jobs will depend to a significant degree on his total time spent in office. Fortunately, it is easy to correct for this problem all we need to do is look at the average change in jobs per year. Second, the total number of jobs gained is an imprecise metric, given that at least part of the differences between time periods can be attributed to different rates of population growth. An easy way of correcting for this is to measure the percent change in the total number of jobs. Therefore the best metric for comparing different presidents’ track records would be the average annual percent change in jobs.

CEPR and Nicolas Buffie / September 26, 2016

Article Artículo

Honduras

Latin America and the Caribbean

World

Show Me the Data: On the Ground with USAID in Honduras

I traveled to Honduras recently to better understand how funding for the Central American Regional Security Initiative (CARSI) and for the Alliance for Prosperity Plan (APP) is being spent and accounted for by its implementers. Nearly half of the $750 million that the US government is channeling to the APP in fiscal year 2016 is specifically allocated to CARSI. These are historic levels of funding to the region, unparalleled since the early 1990s when the US was involved in Central America’s internal armed conflicts. Numerous reports indicate that military and police-perpetrated human rights abuses have increased since the creation of CARSI and there is no real evidence that CARSI has yielded minimal, if any, results.

In fact, very little is known about the efficacy or impact of these programs at all, despite the hundreds of millions of dollars being spent. On September 7, I co-authored a report published by the Center for Economic and Policy Research (CEPR) that shows that the only publicly available impact assessment study of a CARSI program, published in 2014 by Vanderbilt University’s Latin America Public Opinion Project (LAPOP), doesn’t conclusively demonstrate, as the study claims, that the CARSI program has had positive results  (LAPOP has published a critique of this report, and CEPR staff are now preparing a response to this critique).

The specific CARSI program that the LAPOP study assesses is a community-based violence and crime prevention program that is implemented by the US Agency for International Aid (USAID) and its partners in El Salvador, Guatemala, Honduras and Panama. In late 2014 a USAID official told Congress that “We have evidence that these kinds of programs are working, and evidence is crucial so we can build on what really works.” Since there is no hard evidence that the CARSI/USAID program is working — in the LAPOP study or elsewhere — I decided to have a closer look at the program on the ground in Honduras, a country I have worked in for over a decade, and see for myself.

CEPR and Laura Jung / September 26, 2016

Article Artículo

Economic Growth

United States

The Culture of Overwork: A Uniquely American Phenomenon

Earlier this year, Heather Boushey and Bridget Ansel of the Washington Center for Equitable Growth released a report titled “Overworked America: The Economic Causes and Consequences of Long Work Hours.” For those who work excessively long hours at their jobs and don’t have time to read the full report, this blog post by the authors succinctly summarizes many of the paper’s key findings.

Boushey and Ansel show that, between 2011 and 2014, a large number of Americans worked beyond the typical 40-hour workweek. (In 2015, exactly 25 percent of the labor force worked 41 or more hours per week.) Moreover, long hours show up predominantly in occupations with significant wage disparities — most notably in legal, management, and finance occupations.

One point that isn’t discussed in the piece is the degree to which other developed countries — many of which, incidentally, have much lower income inequality than the U.S. — have been able to rid themselves of this problem. As productivity rises, countries have the option of improving workers’ well-being not through higher incomes, but rather through greater leisure time. And in general, most countries have opted for a bit of both. Annual incomes have continued rising, but working hours have declined as well.

CEPR and Nicolas Buffie / September 23, 2016

Article Artículo

NYT Calls Protectionist Pact "Free Trade," Joins Obama's Push for the TPP

The Trans-Pacific Partnership (TPP) has little to do with free trade. The trade barriers between the United States and the other countries are already very low, with few exceptions. In fact, the United States already has trade deals with six of the 11 countries in the TPP. The TPP is primarily about installing a corporate-friendly structure of regulation, as well as increasing protectionist barriers in the form of stronger and longer patent and copyright and related protections. (It doesn't matter if you and your friends like patent and copyright protection, they are still protectionism.)

President Obama is pulling out all the stops in pushing the TPP and it seems the NYT has decided to abandon journalistic principles to join this effort. It featured a confused article reporting that people in the United States favored trade, which randomly flipped back and forth between the terms "trade," "trade agreements," and "free trade." As everyone, except apparently the people who work for the NYT, knows these are not the same thing.

It is hard to believe that many people in the United States would be opposed to trade. Imports and exports combined are more than a quarter of GDP. Many of the products we now import, like coffee, would either not be available at all, or extremely expensive without trade. It's difficult to believe that many people in the United States would support autarky as an alternative to the current system.

If people are asked about "trade agreements," it is not clear what they think they are referring to. The United States has been involved in hundreds of trade agreements over the last seven decades. These agreements hugely reduced trade barriers between the U.S. and the rest of the world, leading to large increases in trade and large drops in price. Of course most of these benefits accrued before 1980, but it seems unlikely that many of the people polled on the topic would have a clear idea of the costs and benefits of the trade deals negotiated since World War II.

When it comes to the TPP, there is very little by way of free trade promotion in this deal. As noted, most barriers between the member countries are already low. This is why the non-partisan International Trade Commission (ITC) projected that the gains to GDP when the effect of the deal is mostly felt in 2032 will be just over 0.2 percent of GDP. This is just over a month of normal economic growth.

CEPR / September 22, 2016