After months of speculation, in early May the IMF formally approved a new lending agreement with Jamaica worth $932.3 million. With additional commitments from the World Bank and Inter-American Development Bank, the total loan package amounts to $2 billion. But, after another year of negative economic growth (the fourth in the last five years), will this time be any different?

Jamaica previously agreed to an IMF loan in early 2010, which was coupled with a debt exchange that sought to lower interest rates but did not provide any haircut (a lowering of the debt’s principal). The agreement mandated harsh austerity measures and despite the debt exchange, Jamaica’s interest burden remained the highest in the world, at 11 percent of GDP. The agreement eventually broke down after a Jamaican court ruled that the government had to distribute back pay to public sector workers, against the wishes of the IMF. Nevertheless, Jamaica has largely continued the austerity measures from the first agreement. After a return to growth –albeit slow- in fiscal year 2011/12, Jamaica slipped back into a recession this past year, after cutting non-interest expenditure by over 2 percentage points of GDP. Even some within the IMF warned that the fiscal consolidation efforts were going too far and could threaten “the fragile recovery and social cohesion.”

As a precondition for the new IMF agreement, the Jamaican government undertook a second debt exchange in February of this year, seeking to lower interest costs and “bring down the debt burden over time.” However, similar to the previous exchange, the principal of the debt was not touched and interest costs remain extremely high and damaging. Of the 131 countries for which IMF World Economic Outlook data is available, Jamaica will still have the highest average interest burden in the world over the next six years. The debt exchange succeeded in extending the maturity profile of domestic debt (the amount coming due within five years decreased from 53.2 percent to 23.4 percent), but Jamaica is still expected to spend some 8 percent of GDP on interest payments for the next three years, crowding out needed spending elsewhere. Overall debt servicing is projected to take up 45 percent of total government expenditures over the next three years, only a slight reduction from the 46 percent average over the previous three.

May 2013, Rebecca Ray, Milla Sanes, and John Schmitt

In addition to the legal and ethical concerns with unpaid internships, which I raised in a recent post, unpaid internships also pose a number of economic issues. First and foremost, unpaid internships require a substantial financial commitment from interns. Young adults participating in unpaid internships typically sacrifice time they could spend earning money at paying jobs. Even so, many interns work second jobs at night shifts to make ends meet. As many of the most desirable internships are located in cities, interns often have to endure long, costly commutes or somehow afford housing closer to the city. Some interns even paymore than $12,000 for a semester-long internship placement (includes housing costs) in cities like Washington, D.C.

Some students and recent graduates are fortunate enough to have families that can afford to subsidize these costs. For many students from modest backgrounds, however, their families cannot bankroll their living expenses as they perform unpaid work. It is not possible for these students to work unpaid internships when they need to take paying jobs in order to put themselves through school or cover their living expenses. Without internship experiences, lower-income students will be at a competitive disadvantage when applying for future jobs. In this regard, unpaid internships can reinforce socioeconomic inequalities.

Unpaid internships don't always provide the returns many interns expect. The 2011 National Association of Colleges and Employers (NACE) graduate survey (includes every organization type: for-profit, non-profit, government) found that graduates who had unpaid internships not only performed worse in job offers and starting salaries compared with those with paid internships but they also had worse prospects than those who had no internship experience at all (Eisenbrey, 2012).

Ten days ago Guatemalan courts convicted former dictator General Efraín Ríos Montt, to 80 years in prison for charges of genocide and crimes against humanity. Though the ruling has just been overturned on technical grounds, it was the first time that a country has been able to use its own criminal courts to try a former head of state for genocide, arguably making it one of the most important court decisions in decades. Despite the significance of the ruling, not just for what it represents for the more than 200,000 victims of the genocide and their families, but also for human rights worldwide, the mass media in the U.S.  has mostly ignored the U.S. role in contributing to and supporting the genocide.

The New York Times provided a couple of exceptions in the last week. Its “Room for Debate,” feature, which is regularly published online but not in the print edition, and allows perspectives from a broader political spectrum than is normally permitted in news articles or even the op-ed page,  published a range of opinions on the extent of U.S. support and complicity for the Ríos Montt regime. And last week the New York Times published an exceptional print article about the role of the U.S. government in Guatemala, Reagan’s financial and fervent military support for Ríos Montt’s bloody dictatorship, and how this aspect of the genocide had been conspicuously absent during the trial against Ríos Montt.  

Amazingly, the Washington Post chose not to report at all on the historic ruling in their print edition following the day of the ruling. Although stories on corruption scandals in India, a detained youth activist in Egypt, and voting in Pakistan did make the international section of the print edition of that day’s Washington Post,  the Post found no space to print this story. Two days after the conviction was announced (and after it made headlines around the world), and buried deep in the digest section of Sunday’s print international section were a total of 73 words dedicated to what it said human rights activists called “a historic moment” in Guatemala.

This dearth of words from the Washington Post shouldn’t be too surprising. After all, not reporting or investigating news about massacres and genocide in Guatemala when it had the opportunity to do so is consistent with the Post’s reporting on the country throughout the 1980s when the U.S. government supported death squads in the countryside killing anyone and everyone that they could. Yes, the Post reported on Guatemala, and on guerrillas, and occasionally it even paid some lip-service to the idea that some people claimed that the government and army, not the guerrillas, were behind the vast majority of deaths in the country. But, despite reliable indications and reports that government-led massacres and even a genocide was in fact underway in Guatemala, for example from this October, 1982 episode of PBS’s MacNeil/Lehrer Report  and this one from November of 1983, the Post neglected the opportunity to dig up the truth during this period. The New York Times, it should be pointed out, also mostly ignored the genocide when it was taking place. This was the pre-internet era, so if these newspapers did not report on massacres, for the United States public and policy-makers, they weren’t part of the news.  (However, investigative reporter Allan Nairn did get opinion pieces into the NYT and Washington Post some time after the worst massacres had occurred.)

Eileen AppelbaumEconomic Intelligence (U.S. News & World Report), May 21, 2013

As we have noted previously, statistical analysis shows that Venezuelan opposition challenger Henrique Capriles has an almost impossible chance of seeing the April 14 election result change through a full audit of voting machines, as he had demanded.

We have issued two press releases about this, as well as our full paper detailing our calculations step-by-step, and CEPR Co-Director Mark Weisbrot had an op-ed on this in Aljazeera English. Mark also presented these findings at a recent high-profile conference at the Celso Furtado Center in Rio. Despite being reported in a variety of Latin American and Spanish media, including Spanish newspaper El País, Argentine media outlet Télam, and Venezuela’s Panorama, the U.S. media has ignored this important part of the story. We have corresponded with several reporters who initially expressed interest in the one-in-25-thousand-trillion figure. None of them has since cited the statistical improbability of Capriles’ seeing the election results change through the full audit, nor have other major U.S. media outlets. One reporter writing for a major U.S. newspaper has told us that his editors refuse to publish anything related to our statistical analysis or regarding the audit and its significance more generally.

Henrique Capriles’ recent comments demonstrate why the ongoing vote audit, and more importantly, the first audit (conducted on April 14) is still relevant. In an El Pais article from May 9, Capriles says that 400,000 more people voted for him than Maduro, and that therefore the CNE’s vote count must have been wrong:

“If they rescind the electoral records we have questioned in the electoral dispute we have filed with the Supreme Court - which make up 55.4 percent of the votes cast – we would win the elections by 400,000 votes, two percent in our favor. And that’s without going into details,” he says with righteous conviction.

It appears that Capriles is still alleging the vote count was stolen in a way that would have been detectable in the first audit, and hence the statistical analysis still applies.  If tens of thousands of voters voted multiple times, it would be very difficult to stuff the receipt boxes to match the multiple voting, without having some discrepancies between the machine and the paper count. The receipt boxes are in plain sight of all observers and it would be impossible for a voter to stuff multiple pieces of paper through the thin slot without anyone seeing. It would also be impossible to vote more than once without not only the collaboration of observers to fix the machines to allow this, but a conspiracy involving tens of thousands of people, with no subsequent leaks.

Dan Beeton and Alexander MainAl Jazeera English, May 20, 2013

Internships can be great opportunities for undergraduates or recent college graduates to gain career-related experiences or skills. Additionally, these learning experiences can improve trainees’ chances of future employment as they develop networks and connections. But, the widespread use of unpaid internships also raises legal and ethical questions, especially in the for-profit sector. Unpaid internships at non-profit organizations and government bodies also deserve attention, but these programs are not subject to the same rules as at for-profit, private businesses because interns can be considered “volunteering” their time.

The Obama administration had considered cracking down on illegal unpaid internships, which perhaps prompted the Department of Labor’s Wage and Hour Division (WHD) to release a memo that clarifies what constitutes a legal unpaid internship with a six-part test.

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training, which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Recently, over 3,000 former unpaid interns of the Hearst Corporation filed a class action lawsuit against the magazine business. The former interns argued they had been doing the work of paid employees and the “unpaid” classification was misused and illegal.  The lines between a mutually beneficial learning experience and free labor have thus become increasingly blurred as more businesses have adopted unpaid internships in recent years. It appears likely that many other for-profit organizations either openly ignore the six-part test or bend the rules in order to avoid paying for work or any other benefits.

The following are the most recent labor market policy research reports:

Center for American Progress

No Justice for the Injured
Billy Corriher

The Importance of Preschool and Child Care for Working Mothers
Sarah Jane Glynn and Jane Farrell

Demos

Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fueling Inequality
Amy Traub and Robert Hiltonsmith         

Economic Policy Institute

Ongoing Joblessness in Texas: African American and Hispanic Unemployment Rates Far Exceed the White Unemployment Rate in the State
Mary Gable and Douglas Hall

Ongoing Joblessness in Michigan: Unemployment Rate for African Americans Tops in Nation, More Than Double the State’s White Rate
Mary Gable and Douglas Hall

Ongoing Joblessness in Mississippi: Unemployment Rate for African Americans Ninth in Nation, More Than Double the state’s White Rate
Mary Gable

Ongoing Joblessness in New Mexico: Unemployment Rate for Hispanics Far Exceeds the State’s White Rate
Mary Gable

Ongoing Joblessness in North Carolina: Unemployment Rate for African Americans Fourth in Nation, More Than Double the State’s White Rate
Mary Gable and Douglas Hall

The International Crisis Group (ICG) sells itself as “working to prevent conflict worldwide” but there is one country where their mission looks more like promoting rather than preventing conflict.  Exhibit A is their report on Venezuela, released today. 

Abril 2013, Alexander Main y Annie Bird

The initial trial of Guatemala’s ex-president Efraín Ríos Montt concluded on Friday with a conviction on charges of genocide and crimes against humanity and an 80-year prison sentence.  Hailed as “the first time any nation [has] been able to use its domes

Mai 2013, Jake Johnston et Alexander Main

Dean Baker
Project Syndicate, May 13, 2013