Fighting Unemployment: The Limits of Free Market Orthodoxy

By David R. Howell | Go to book overview
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This project grew out of my research on wage inequality in the United States. The mainstream view in the 1990s was that it was pretty self-evident that the explosion in U.S. earnings inequality was the result of a collapse in the demand for less-skilled workers, an outgrowth mainly of skill-biased technological change. This view never seemed very convincing. Rather, it seemed that ideological shifts toward market solutions and closely linked weakening of protective regulations and institutions (e.g., minimum wages and unions) were an important part of the story. A large and steady supply of foreign labor may also be important, at least in some regions. But this alternative view suggests a “European” type of solution—more regulations, more collective and coordinated bargaining, and more social protection spending—and therefore, according to the conventional wisdom, much higher unemployment! Did persistent high unemployment really follow ineluctably from a more regulated and sheltered labor market?

Work began on this “unemployment and labor market institutions” project in the mid-1990s. With a grant to David Gordon by the John D. and Catherine T. MacArthur Foundation to study the effects of globalization on the welfare state, the project came under the umbrella of the Center for Economic Policy Analysis (CEPA), which is affiliated with the New School University's economics department. I want to thank my colleagues at CEPA, Lance Taylor and Will Milberg, for their consistent support and good advice, and the MacArthur Foundation for its generous financial support.

While this project has produced wonderful collaborations (more on this later), it has endured the tragic, premature passing of two close friends,


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Fighting Unemployment: The Limits of Free Market Orthodoxy


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