Tuesday, March 06, 2007

Sticky wages get stickier

When Michael Maynard's company announced it was moving overseas, the 53-year-old machine technician from Massachusetts quickly found a job at another firm. As the sole provider for his wife and two daughters, Maynard jumped at the new opportunity, even though he had to take a pay cut of nearly $8 an hour.

Then Maynard got lucky. He discovered that, unlike most Americans who lose their jobs, he qualified for a little-known federal program that pays up to $10,000 to certain workers dislocated by trade. In addition to his regular paycheck, he gets a government check for $117 a week, he said, a sum that "helps a lot."

Now, congressional leaders want to expand the program, known as wage insurance, with some arguing that it should be available to any worker who loses a job for almost any reason. The proposal is part of a broader effort to ease the anxieties of middle-class Americans who feel threatened by the globalization of business and a churning U.S. labor market that creates and destroys about 30 million jobs a year. Making up for lower pay

It looks like the labor market arbitrage of globalization just got a little more expensive, albeit tangentially as the costs will be distributed throughout the nation's tax base.

Who knows, maybe some clever soul will decide that it might actually be better to once again MAKE THINGS in America.

p.s. before I get any nasty comments from my Austrian friends, NO I'm not supporting this initiative. I'd much rather corporate heads take a voluntary interest in making the country of their residence a better place to live for all, which might take the form of not accepting pay that is 400 times their average worker's income. Income disparities such as we have in the US inevitably give rise to such reactions.