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Paths to full employment

Bernstein, J., (2013), “Paths to full employment”, The New York Times, Economix Blog, 02 Δεκεμβρίου.

Economists like me, who stress the importance of full employment, have a bad habit. We go on and on about the problem of slack labor markets – their negative impact on the living standards of middle- and lower-income families, their persistence in recent decades – and then we stop without saying what might be done about it. At best, our closing paragraph might include a nod at fiscal or monetary policy, but that’s it.

In my recent public speaking I’ve been striving to correct that, by starting with the brief assertion (and, I’ll admit, a couple of slides) that the absence of full employment is a serious, long-term (“structural,” as Lawrence Summers recently put it) problem and then jumping right to five robust solutions to the problem.

In this post, I’ll briefly elaborate those solutions. Of course, assuming these solutions are good ones, this leaves us only with a deeper problem: the absence of a political environment with even a sliver of hope of taking up any of these ideas. That will be the subject of a later post. For now, let it be known that as a longtime resident of Dysfunction Junction (i.e., Washington), I’m acutely aware of that problem.

Here are five ideas, developed with Dean Baker in our recent book on the path back to full employment (wherein you can find more detailed discussions) and soon to be further elaborated, as you’ll read at the end.

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