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Lecture 10 Tuesday, October 5 High Road Capitalism

Lecture 10 Tuesday, October 5 High Road Capitalism. A Economic Balance sheet for the United States at the beginning of the 21 st Century. AVERAGE WEEKLY EARNINGS (IN 2007 dollars, adjusted for inflation). Annual rate of growth of family income by income group

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Lecture 10 Tuesday, October 5 High Road Capitalism

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  1. Lecture 10 Tuesday, October 5 High Road Capitalism

  2. A Economic Balance sheet for the United States at the beginning of the 21st Century

  3. AVERAGE WEEKLY EARNINGS (IN 2007 dollars, adjusted for inflation)

  4. Annual rate of growth of family income by income group 1947-79 compared to 1979-2005

  5. Productivity Average compensation Median compensation 2007 1973

  6. Patterns of Job Growth in the US, 1960s versus 1990s

  7. Imports, Exports, and trade balance as a percent of GDP, 1947-2007 Era of trade deficits

  8. % of total profits in the economy that come from the financial sector Financialization of the American Economy

  9. What should be done? Close off the low road, pave the high road, and help firms and workers move from the first to the second.

  10. High Road versus Low Road Capitalism

  11. High Road versus Low Road Capitalism

  12. High Road versus Low Road Capitalism

  13. High Road versus Low Road Capitalism

  14. High Road versus Low Road Capitalism

  15. High Road versus Low Road Capitalism

  16. High Road versus Low Road Capitalism

  17. High Road versus Low Road Capitalism

  18. Problems moving from the low road to the high road

  19. The Relation of skill levels of workers to profits of firms Profits Low High Skill Level of Workers in a firm

  20. Two ways to increase profits Skill enhancement deskilling Profits Low High Skill Level of Workers in a firm

  21. High road Ability to compete in international competition Transition trough from low road to high road Low Road Time THE TRANSITION TROUGH TRAP

  22. The Training Deficit Trap: a free riding problem (from lecture 4 & 5) Training costs = $10,000 Extra Gross Profits with trained workers = $30,000 Net extra profits if you provide training and keep workers = $20,000 Net extra profits if you provide training and workers leave = -$10,000

  23. The anti-union trap: The relationship of union strength to competitiveness of firms Competitiveness Low High Strength of worker organization and participation

  24. The anti-union trap: The relationship of union strength to competitiveness of firms Competitiveness The USA today Low High Strength of worker organization and participation

  25. The anti-union trap: The relationship of union strength to competitiveness of firms continuing the low road Competitiveness Moving toward the high road The USA today Low High Strength of worker organization and participation

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