In the wake of the collapse of the garment factory in Bangladesh, I have been thinking a lot about the issue of corporate social responsibility. The factory was making clothes for western companies including Primark of the UK and Loblaws of Canada, and in many ways the clothing companies have been among the most focused in recent years at trying to police their supply chains to ensure safer working conditions and decent wages. Yet at least 430 people were killed working to meet deadlines set by western companies in a facility that should have been torn down years ago. Read more »

In the Council on Foreign Relations 2011 Independent Task Force on U.S. Trade and Investment Policy, we noted that many economists had begun to worry that growing U.S. trade with developing countries like China and India was holding down wage earnings among lower-skilled Americans. We quoted Paul Krugman, who had explored the issue thoroughly in the 1990s and was rethinking his earlier conclusion that the impact of trade had been small: “It’s no longer safe to assert that trade’s impact on the income distribution in wealthy countries is fairly minor,” Krugman wrote. “There’s a good case that it’s big and getting bigger.” But we noted that, unlike the 1990s, economists had not thoroughly examined the more recent evidence. Read more »

There’s a striking number in Robert Pastor’s new Renewing America Policy Innovation Memorandum, “Shortcut to U.S. Economic Competitiveness: A Seamless North American Market.” Like many, I had assumed that, whatever one’s assessment of the overall impact of the North American Free Trade Agreement (NAFTA), that it had been largely successful in its primary goal of increasing trade and investment flows among the United States, Mexico, and Canada. Read more »

This summer, a billion-dollar project will begin to raise the road deck of the Bayonne Bridge that links Staten Island to Jersey City, and provides access to Manhattan via the Holland Tunnel. The project is not being undertaken because of safety concerns about the current bridge, but rather to allow larger container ships to pass underneath it and reach the Port of New York and New Jersey. It’s just one of several port projects in anticipation of the widening of the Panama Canal. Read more »

If there was any question about whether Secretary of State John Kerry would continue Hillary Clinton’s signature “economic statecraft” initiative, it was put to rest in his very first speech. Speaking to students and faculty at Thomas Jefferson’s University of Virginia, Kerry spent the bulk of the speech talking about U.S. economic opportunities in the world, and surprisingly little about the traditional foreign policy challenges. Read more »

MILAN – New technologies of various kinds, together with globalization, are powerfully affecting the range of employment options for individuals in advanced and developing countries alike – and at various levels of education. Technological innovations are not only reducing the number of routine jobs, but also causing changes in global supply chains and networks that result in the relocation of routine jobs – and, increasingly, non-routine jobs at multiple skill levels – in the tradable sector of many economies. Read more »

While freer trade makes everyone collectively richer, the impacts are unequal. There are winners and losers, and even among the winners there are some who gain a great deal and some who gain very little. The precise relationship between expanded globalization and rising income inequality remains in dispute, but economists now generally accept that freer trade, immigration and investment, along with technology, have played some significant role in the growing gap between the rich and poor and the shrinking middle class in the United States. Read more »

A new study released this week by the Pew Center for the States is further proof of the folly of state tax incentives as a way to attract job-creating business – though in its usual even-handed fashion Pew is careful not to say as much. The report shows that surprisingly few states make serious estimates of the potential cost of tax incentives they offer companies, and very few cap the total benefits, leaving the government exposed to large losses. Read more »