China’s New Normal

China, Innovation, R&D, growth rate--

In Praise of China’s New Normal by Yao Yang - Project Syndicate: ".... China’s capacity for innovation is improving steadily, owing to rapidly increasing human capital and rising investment in research and development. By next year, Chinese R&D expenditure, at 2.2% of GDP, will be closing in on advanced-country levels. Based on these trends – and assuming a constant labor-participation rate – China’s potential growth rate over the next decade is likely to hover around 6.9-7.6%, averaging 7.27%. This may be much lower than the 9.4% average growth rate in 1988-2013, but it is more than adequate by global standards. If this is China’s “new normal,” it would still be the envy of the rest of the world." Read more at http://www.project-syndicate.org


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New Normal, Jobs, Still Missing

New Normal Situation Still Abnormal:

Still Missing: 3.9 Million Prime-Age Jobs - Bloomberg View: "... Some economists are doubtful that the Fed's stimulus efforts can get employment back up to pre-recession levels without generating too much inflation. Their position should be held to a high standard of evidence, particularly given that there isn't much inflationary pressure visible in the available data -- including wage growth in the August jobs report. Those who would give up on getting back to normal must accept both the suffering of millions of people and a permanent impairment of the economy's ability to generate higher living standards." (read more at link above)

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For Workers, a New Normal

For Workers On Labor Day, a New Normal? | RealClearMarkets: "....But suppose we are nearing an inflection point, where worker supply and demand are in closer balance. That certainly wouldn't be bad. Workers' bargaining power would improve with tighter markets: markets where businesses have to pay a bit more to keep employees; where younger workers might have competing job offers; and where someone could quit with a reasonable expectation of finding another job. (Note that unions aren't a plausible alternative to markets because they represent only 7 percent of private workers. The minimum wage suffers from a similar scale problem.) A wage explosion seems unlikely; companies were too traumatized by the Great Recession to let costs get out of hand. Even in 2007, wage increases - unadjusted for inflation - were running only at about a 3.5 percent annual rate. What's ultimately at stake is the Great Recession's lasting effect on labor markets. Are they in the process of reverting to their modern role, promoting steadier employment and higher living standards? Or has there been a major break from the past, ushering in a harsher, more arbitrary system whose outlines are still faint? On this Labor Day, the verdict is unclear." read more at link above

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Labor Unions, Dead and Dying

Labor Day: Are Unions Dead? Interview with Rich Yeselson | New Republic: "....What’s ironic about that is that unions are inherently conservative institutions, which historically developed parallel with the development of capitalism itself. They are as much a part of capitalism as Henry Ford or Apple. Unions use contracts—and there’s nothing more intrinsic to capitalism than the right of contract—to link their members to the fortunes of the companies they contract with. They are capable of having huge fights with capital (as in the thirties)—which raise the hopes of leftists—but, usually, over the attainment of very incremental ends---which disappoint leftists. Marx had nothing but contempt for British trade unionists, and Trotsky saw no value in unions at all.  Yet conservatives and most libertarians hate them. Weird...." read more at link above

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