https://www.bbc.com/news/world
US
UNEMPLOYMENT RATE MATCHES LOWEST POINT IN HALF A
CENTURY
HOW LOW CAN WE GO?
The jobless rate ticked down to 3.8% in May, another sign of the strong economy and tight labor market.
That tied the lowest unemployment rate since 1969. Since then, the only other time unemployment was this low was in April 2000.
"It fell for all the right reasons. We had more people coming into the labor market. We saw employers digging deeper into the pool of unemployed," said Josh Wright, chief economist at the software firm iCIMS.
The jobs report painted a picture of an economy with opportunities for almost everyone. Black unemployment fell to a record low, and the gap between black and white unemployment shrank to the narrowest ever measured.
Job openings are at a record high, and businesses are hungry for workers. That has helped underrepresented Americans find jobs.
The unemployment rate among African-Americans and Asian-Americans has been steadily declining. It has also dropped among low-education workers and even teenagers. Over the past year, the unemployment rate among 16- to 19-year-olds has fallen from 14.1% to 12.8%.
Economists believe that the unemployment rate can dip even further because there's still slack in the job market.
The employed percentage of America's population stands at 60.4%, still well below pre-recession levels.
Despite questions about employers' ability to find qualified workers, the economy added 223,000 jobs in May, better than economists predicted.
Job gains were broad. The retail, health care and construction sectors added the most positions. The economy has added 207,000 jobs a month this year on average, a faster pace than last year.
"The US economy has this incredible head of steam," Wright said.
The economy has been expanding for almost nine years, the second-longest streak on record. And employers have added jobs every month for seven and a half years, a record.
Modest wage growth remains the great puzzle in the economy. Wages are 2.7% higher than a year earlier.
Although wage growth has picked up in recent months, economists have been puzzled for a long time about why pay isn't climbing faster. In a job market this tight, employers are typically forced to pay much more to attract workers. In 2000, the last time unemployment was this low, wages grew at a pace of about 4%.
Productivity and inflation are lower than in previous periods of growth, and economists believe that has kept a lid on wages. The erosion of workers' bargaining power has also played a role.
Another explanation: Employers are turning to new workers — such as younger people and those just re-entering the job market — to fill positions vacated by better-paid veteran workers who are either retiring or taking new positions elsewhere.
Economists are confident that wages will keep climbing as competition for workers grows.
Dozens of companies have already announced pay hikes and more attractive benefits to lure workers. On Thursday, Costco said it would raise starting wages for US employees by $1, to a minimum of $14 an hour.
A little more than an hour before the jobs report was released, President Trump broke with precedent by saying on Twitter, "Looking forward to seeing the employment numbers at 8:30 this morning."
Trump's tweet seemed to move the markets. Bond yields jumped almost immediately, and the dollar moved higher.
The jobs report is kept under wraps until the Labor Department publishes it at 8:30 a.m. ET, in part so investors can't get a jump on the data before it becomes public.
A federal rule says executive branch employees are not supposed to comment on major economic reports until an hour after they are released.
"Trump's tweet clearly violated prior norms of practice. For markets to do their best work, they need clear rules of the road to ensure fair competition and invite broad participation," Wright said.
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font redaction http://money.cnn.com/2018/06/01/news/economy/may-jobs-report/index.html
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font redaction http://money.cnn.com/2018/06/01/news/economy/may-jobs-report/index.html
Trump’s protectionism continues long
history of US rejection of free trade
history of US rejection of free trade
Free traders have vilified President Donald Trump as a pernicious protectionist because of policies such as hiking tariffs, abandoning the Trans-Pacific Partnership and saying he’s prepared to walk away from the North American Free Trade Agreement.
They fear his policies will hurt the U.S. economy by restricting access to foreign goods. But are these policies really so radically different from past administrations?
Absolutely not. The fact is the U.S. has never been a truly free trade country – one with virtually no barriers to trade with other nations – as some people seem to think. The idea that the U.S. ever was is a myth.
This is among the topics I’ve been exploring for an upcoming book, titled “The Rise of the Guardian State.” My research shows the reason both Republicans and Democrats have pursued protectionist policies – despite their rhetoric – is part of the fabric of the American democratic political process.
THE ‘GUARDIAN STATE’
Long before the U.S. became the so-called defender of the liberal economic world order after World War II, it had become a guardian of another kind.
U.S. policymakers’ free trade rhetoric has always been tempered by what I call a “guardian” mentality intended to shelter domestic industries and workers from the full impact of globalization and open trade. In other words, the U.S. government tends to talk a lot about free trade but then maintains a protective layer of trade barriers across the economic landscape.
" The neoliberal era in the United States ended with a neofascist bang. The political triumph of Donald Trump shattered the establishments in the Democratic and Republican parties – both wedded to the rule of Big Money and to the reign of meretricious politicians. "
Goodbye, American neoliberalism. A new era is here
A paper I published in 2000 showed how this is a natural outgrowth of democracy and the granting of suffrage to more people. As the masses gained greater political power at the turn of the 19th century, politicians faced greater pressure to protect their constituents from the vicissitudes of trade.
For example, at the ballot box, the issues of economic growth and unemployment have often been critical to outcomes. In fact, in every presidential election since World War II, economic issues have figured prominently if not centrally.
And on a broader level, special interests such as unions and business groups brought their political weight to bear at the doors of lawmakers to protect their members.
And on a broader level, special interests such as unions and business groups brought their political weight to bear at the doors of lawmakers to protect their members.
AN AXIS OF GUARDED TRADE
Hence what we have perceived as a partisan schizophrenia in trade policyin American history between the so-called Republican free traders and Democratic economic nationalists has usually been nothing more than moderate shifts back and forth along an axis of guarded trade.
Even the pro-free trade Republican administrations of Presidents Ronald Reagan and George W. Bush promoted significant barriers to trade. For example, Reagan pushed Japan to unilaterally limit the number of automobiles it exported to the U.S., while Bush erected tariffs against foreign steel.
And in the 2016 presidential election, there was scant fundamental difference between the two main candidates’ trade policies. Both Hillary Clinton and Trump, notwithstanding some minor differences on trade, questioned American support of multilateral trade agreements and engaged in worker-centric and populist rhetoric on globalization.
TRADE’S COSTS AND BENEFITS
But if America could get very close to a free trade policy, would that be a good thing?
No major country has ever been a purely free trader in modern history. My research for an article published in 1985 demonstrates that Great Britain came closest from 1860 to World War I, when the country eliminated virtually all tariffs.
Among major nations in the post-World War II period, the U.S. has been closest to the free trade pole. But as noted above, with a plethora of tariffs and quotas on foreign goods, the U.S. is still some distance away from late 19th-century Britain’s free trading ways.
We know trade carries great benefits, as is clear from the fact that the most prosperous nations today embrace trade as a vehicle to greater wealth. But trade concomitantly generates costs.
While the benefits of freer trade are spread over society as a whole in the form of rising real incomes and access to superior products, some localities experience costs that severely plague specific groups. The “destructive” part of “creative destruction” – coined by political economist Joseph Schumpeter to characterize capitalist competition – is synonymous with industries failing and their workers losing jobs.
While in theory such dislocation can be overcome over time by people migrating to more competitive industries and wealthier regions, in the short run it is devastating for families that are less mobile than others. And in fact people are far less mobile than liberal theorists like to contemplate (especially older blue-collar and unskilled workers).
Indeed an overwhelming amount of research suggests that theories upon which free trade are based often fail quite significantly in the face of reality.
And that’s where protective barriers come in. They guard these groups from the economic dislocation of unrestricted competition across national boundaries. This renders a capitalist society more tolerable.
‘NOTHING IN EXCESS’
That being said, going too far in a protectionist direction is surely as devastating, if not more so than a world of purely free trade. As in so many other dimensions of human life, the famous Greek aphorism“nothing in excess” rings true.
The present article is not an attempt to paint Trump as mainstream on trade policy in any way. Indeed, he has pursued a very aggressive protectionist agenda, even when measured against the most protectionist Democratic administrations.
But I do wish to suggest that the debate over trade in American history is not as bipolar as most believe and that the differences between Trump’s and past administrations are more a matter of degree than kind.
And if trade goes along the lines of Trump’s other political priorities, we may in fact see that U.S. trade practices will not change as significantly as many believe. His protectionist bark is likely bigger than his bite.
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font redaction https://theconversation.com/trumps-protectionism-continues-long-history-of-us-rejection-of-free-trade-91190
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