Wage and Fiscal Policies for Economic Recovery Jomo Kwame Sundaram and Anis Chowdhury
The new US census data released in late September show that 3.5 million people in the US climbed out of poverty, as the tepid economic recovery continues. Employers are finally creating more jobs and paying higher wages than seven years after the Great Recession started following the 2008 financial crisis. This progress, while modest, debunks the claims of those who predicted a dire outcome following the increase in the legislated US minimum wage, especially without a robust recovery. The data show large employment and wage gains, particularly for the lower end of the jobs spectrum. Raising the legal minimum-wage and…
Pensions for All Jomo Kwame Sundaram and Rob Vos
October 1st is the International Day of Older Persons. Just another day? Perhaps, but it should remind us that the world’s population is ageing, brought about by the combined effects of declining mortality and fertility rates and longer longevity. By mid-century, one out of five people will be over 65 compared to over one in ten now. This is dramatic enough. What is equally compelling is that eighty per cent of older persons in the world will be living in developing countries by then – within two generations. This ageing of the world’s population is one of humanity’s major achievements.…
Poverty Cut by Growth Despite Policy Failure Jomo Kwame Sundaram
At the UN Millennium Summit in September 2000, world leaders committed to halve the share of people living on less than a dollar a day by 2015. The World Bank’s poverty line, set at $1/day in 1985, was adjusted to $1.25/day in 2005, an increase of 25% after two decades. This was then re-adjusted to $1.90/day in 2011/2012, an increase by half over 7 years! As these upward adjustments are supposed to reflect changes in the cost of living, but do not seem to parallel inflation or other related measures, they have raised more doubts about poverty line adjustments. The…
Chancellor’s Lecture Series: Public Lecture on ‘Trans-Pacific Partnership Agreement (TPPA): Future or Fraud’, Wawasan Open University Jomo Kwame Sundaram, May 14, 2016
https://www.youtube.com/watch?v=YCi1zn9uyYg To listen to the audio podcast of the lecture, click here.
Can the Middle East Make Economic and Social Progress? Vladimir Popov and Jomo Kwame Sundaram
Why do some countries grow faster than others? How do we engineer an economic miracle? Some economists believe that manufacturing growth is like cooking a good dish—all the needed ingredients should be in the right proportion; if only one is under- or over represented, the ‘chemistry of growth’ will be sub-optimal. Rapid economic growth can only happen if several necessary conditions are met at the same time. Rapid growth is a complicated process requiring a number of crucial inputs— infrastructure, human resources, relatively low economic inequalities, effective state institutions and economic stimuli among others. As ‘binding constraints’ may hold back…
The Neoliberal Counter-revolution in Retreat? Jomo Kwame Sundaram
The US Wall Street crash of 1929 was followed by the Great Depression, which in turn engendered two important policy responses in 1933 with lasting consequences for generations to come: President Franklin Roosevelt's New Deal and the Glass-Steagall Act. While massive spending following American entry into the Second World War was clearly decisive in ending the Depression and for the wartime boom, the New Deal clearly showed the way forward and would have succeeded if more public money had been deployed consistently to revive economic growth. Although Michal Kalecki and others had anticipated some of his work, it took a…
Expansionary fiscal consolidation myth Jomo Kwame Sundaram, Anis Chowdhury
KUALA LUMPUR, Malaysia, Aug 11 - The debt crisis in Europe continues to drag on. Drastic measures to cut government debts and deficits, including by replacing democratically elected governments with ‘technocrats', have only made things worse. The more recent drastic expenditure cuts in Europe to quickly reduce public finance deficits have not only adversely impacted the lives of millions as unemployment soared. The actions also seem to have killed the goose that lay the golden egg of economic growth, resulting in a ‘low growth' debt trap. Government debt in the Euro zone reached nearly 92 per cent of GDP at…
Free Trade’s Diminishing Returns Jomo Kwame Sundaram and Vladimir Popov
KUALA LUMPUR/MOSCOW – In its May 2010 “Global Survey,” McKinsey & Company reported that, “the core drivers of globalization are alive and well.” In an April 2014 report, the firm went further, declaring that, “to be unconnected is to fall behind.” But now McKinsey seems to have changed its tune. In a new report, “Poorer Than Their Parents? Flat or Falling Incomes in Advanced Economies,” the McKinsey Global Institute asserts that developed countries should not expect further gains from the process of globalization. Income growth has stalled since the 2008 financial crisis and “even a return to strong GDP growth…
Poverty, Vulnerability and Social Protection Jomo Kwame Sundaram
According to the World Bank, the MDG target of halving the share of the poor was achieved by 2008, well in advance of 2015, the target year. However, increased unemployment and lower incomes in recent times remind us that poverty is not an unchanging attribute of a shrinking group, but rather, a condition that billions of vulnerable persons risk experiencing. Despite the various shortcomings of money measures of poverty, they nevertheless reflect the extent of vulnerability. For example, the estimated number of poor globally in 2012 more than doubles from 902 million to 2.1 billion when one raises the poverty…
US Government Report Exposes Exaggerated TPPA Growth Claims Jomo Kwame Sundaram
A US government agency acknowledges that the Trans-Pacific Partnership (TPP) will not deliver many economic benefits promised by its cheerleaders. The 2016 report by the United States International Trade Commission (ITC) acknowledges that the TPP will not deliver many gains claimed by the US Trade Representative (USTR) and the Peterson Institute of International Economics (PIIE) although it uses similar methodology and assumes that the TPP will not change the US trade deficit as a share of GDP. The ITC’s credibility has declined over the years as it earned a reputation for cheer-leading FTAs. It had grossly underestimated US trade deficit…
