In a CEPR Discussion Paper, Sascha Becker, Thiemo Fetzer, and Dennis Novy argue that education and income mainly explain voting outcomes. In the abstract of their paper, the authors write:
We find that exposure to the EU in terms of immigration and trade provides relatively little explanatory power for the referendum vote. Instead, … fundamental characteristics of the voting population were key drivers of the Vote Leave share, in particular their education profiles, their historical dependence on manufacturing employment as well as low income and high unemployment. … within cities, we find that areas with deprivation in terms of education, income and employment were more likely to vote Leave.
In Commentary, Nicholas Eberstadt recounts how low employment, deteriorating health, and declining social mobility in the United States foreshadow a “Miserable 21st Century.”
- Between 2000 and 2016, the work rate for Americans aged 20 or older fell by almost 5 percentage points, to 60 percent.
- In the “prime working age” group, it fell by almost 4 percentage points.
- While work rates for men had been falling for much longer, a similar decline for prime age women set in in 2000.
- Death rates for white men and women aged 45–54 rose slightly since 2000; they increased sharply for the subset with high school or lower education.
- In 2016, life expectancy at birth in the US fell for the first time in decades.
- By 2013, more Americans died from drug overdoses than from either traffic fatalities or guns.
- Alan Krueger’s research suggests that about 50% of prime working-age male labor-force dropouts take pain medication on a daily basis.
- This group spends its time watching TV, movies, or playing video games, and many take drugs.
- The “welfare state” (Medicaid) helps the unemployed pay for their drugs.
- In 2013, roughly 20% of civilian men aged 25–55, and roughly 50% of non-working prime-age people were Medicaid beneficiaries.
- Roughly 60% of the non-working prime-age male non-Hispanic population collected disability benefits.
- While the U.S. has a higher incarceration rate than almost any other country, only few of the Americans ever convicted are incarcerated. “Maybe 90 percent of all sentenced felons today are out of confinement,” due to release, probation, or parole, adding to a stock of roughly 20 million people.
- Geographical mobility and job churning are in decline.
- Chances of surpassing one’s parents’ real income are lower than ever before in postwar America.
On his blog, Dani Rodrik comments on NAFTA’s implications for US manufacturing and jobs.
So here is the overall picture that these academic studies paint for the U.S.: NAFTA produced large changes in trade volumes, tiny efficiency gains overall, and some very significant impacts on adversely affected communities.
… Mexico has been one of Latin America’s underperformers.
So is Trump deluded on NAFTA’s overall impact on manufacturing jobs? Absolutely, yes.
Was he able to capitalize on the very real losses that this and other trade agreements produced in certain parts of the country in a way that Democrats were unable to? Again, yes.
On his (Le Monde) blog, Thomas Piketty emphasizes that labor productivity in France and Germany is as high as in the US, and much higher than in Italy or the UK (his figures here and here).
In a blog post, Stephen Williamson argues that the US labor market is doing just fine.
Given recent productivity growth, and the prospects for employment growth, output growth is going to be low. I’ll say 1.0%-2.0%. And that’s if nothing extraordinary happens.
Though we can expect poor performance – low output and employment growth – relative to post-WWII time series for the United States, there is nothing currently in sight that represents an inefficiency that monetary policy could correct. That is, we should expect the labor market to remain tight, by conventional measures.
In a Project Syndicate column, Edmund Phelps argues that it is not “austerity” which is to blame for Greece’s plight.
So spending more is not the remedy for Greece’s plight, just as spending less was not the cause. What is the remedy, then? No amount of debt restructuring, even debt forgiveness, will suffice to achieve prosperity (in the form of low unemployment and high job satisfaction). Such measures would only help Greece to revive government spending. Then the economy’s stultifying corporatism – clientelism and cronyism in the public sector and vested interests and entrenched elites in the private sector – would gain a new lease on life. The European left may advocate that, but it would hardly be in Europe’s interest.
The remedy must lie in adopting the right structural reforms. Whether or not the reforms sought by the eurozone members raise the chances that their loans will be repaid, these creditors have a political and economic interest in the monetary union’s survival and development. They should also be ready to help Greece with the costs of making the necessary changes.
Ben Bernanke argues in his blog that it is not clear whether monetary policy fosters inequality. And if it did, other policy instruments should be used to address the resulting problems.