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from The Great Debate:

Rebuilding America’s high-wage economy

Good for President Barack Obama for emphasizing the need to restore America’s middle class. However, the actual proposals in his new summer offensive would not go very far toward that worthy goal.

America is moving, at an accelerating pace, toward an economy with tens of millions of poorly paid service jobs at one end, and a relatively small number of astronomically compensated financial jobs at the other. In between the fast food workers, who demonstrated this week for a living wage, and the hedge fund billionaires is a new creative class heavily based on the Internet. But the web entrepreneurs are too narrow a segment on which to rebuild a broad middle class.

For a quarter-century after World War Two, America was a far more equal society -- with jobs that paid a “family wage” on a single paycheck. One question dividing economists now is whether the more equal, high-wage economy of the postwar era is irrevocably gone with the steel mills of Pittsburgh. Or whether a service economy can become an egalitarian one with a different set of policies.

I am among those who think America can still be a high-wage economy -- but first we need to restore a lot of regulation.

from The Great Debate:

Creating an upscale service economy

The American economy is irrevocably shifting from manufacturing to services. Our workforce has gone from 28 percent factory workers and 72 percent service workers in 1978 to 14 percent factory workers and 86 percent service workers today.

But the service sector encompasses tens of millions of “bad” jobs that are unstable and offer low pay with few benefits – routine clerical work, for example, or retail sales, fast food or low-end human services such as nurse’s aides – alongside a relatively small number of well-compensated professional positions, including doctors, lawyers and scientists, as well as astronomically rich investors and plutocrats in the financial sector.

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