[jsfg_cinti] Article Excerpt: "Robert Reich: Democratic Victory Won't Change Economic Policies Affecting IT Workforce"

Dear JSFG Folks,

Here are some interesting insights into how the recent
election results may effect the economy by Robert
Reich (former Secretary of Labor for President
Clinton).

Key points are:

1. "Expect little action on Capitol Hill, but plenty
of talk from the Democrats as they prepare for the
2008 presidential election." - Summary by CIO editors

2. "I don't think the direction of economic policy is
going to change very much." - Reich

3. "I think it's probably likely that there will be an
attempt to roll back the Bush tax cuts..." - Reich

4. "There's no money in the budget for major increases
in education or job training." - Reich

5. "I think the Democrats ought to lay out an agenda
for the future. They ought to ... make the case for
why America's middle class does not need protectionism
with regards to global trade, but does need the
ability to adapt to new jobs and new industries." -
Reich

This will certainly impact the job market and so it
may pay to take note of his comments.

Regards,
Lance Feldman


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http://www.cioinsight.com/article2/0%2C1540%2C2054268%2C00.asp
November 8, 2006
Robert Reich: Democratic Victory Won't Change Economic
Policies Affecting IT Workforce
By Allan E. Alter

Robert Reich, who was secretary of labor under
president Bill Clinton and is now a professor of
public policy at the University of California,
Berkeley, is one of the leading experts on economic
policy in the Democratic Party. Executive Editor Allan
Alter spoke to Reich the morning after the historic
2006 election and asked him what the Democratic
victory will mean for business and the IT workforce.
His answer: Expect little action on Capitol Hill, but
plenty of talk from the Democrats as they prepare for
the 2008 presidential election.

CIO Insight: What are the implications of last night's
election for economic policy and regulation?

Reich: I don't think the direction of economic policy
is going to change very much. The House Democrats will
want to do such things as raise the minimum wage and
use the bargaining leverage Medicare has to get drug
prices down. But even there, I doubt they have the
votes to override a presidential veto. We don't know
yet what the situation is in the Senate, in terms of
Democratic control. Generally speaking, I don't see
any substantive change in fiscal policy. The
alternative minimum tax is going to be high on the
agenda for both Democrats and Republicans. There's no
way to reduce that tax on the middle class without
getting revenues elsewhere. So I think it's probably
likely that there will be an attempt to roll back the
Bush tax cuts, particularly those that provide the
lion's share of benefits to the wealthy. But here too
it's going to be very tough going, because the
president will use his veto. It's very unlikely the
Democrats will have enough votes to override that.

Do you see any implications for education and the IT
workforce?

There's no money in the budget for major increases in
education or job training. Unless there is a concerted
effort to reduce non-military discretionary spending
in other areas, I don't see that even the Democrats
will have the ability to create the budgetary room.
And as you know, non-defense discretionary spending is
the only place where conceivably, legally, money could
come from for enlarging the Pell [college financial
aid] grants, or providing more opportunities for
post-secondary education. As long as we have the
extraordinary expenses of the war in Iraq and the war
in Afghanistan, an increasing entitlement budget,
particularly in regard to Medicare, and larger and
larger interest payments for the federal debt, we're
in fiscal trouble.

It sounds like we will have a gridlock on Capitol
Hill, given the vetoes you foresee. So what steps
would you like to see the Democrats take on economic
issues?

Well, I think the Democrats ought to lay out an agenda
for the future. They ought to use these two years
before the 2008 presidential election to make the case
for why America's middle class does not need
protectionism with regards to global trade, but does
need the ability to adapt to new jobs and new
industries. And adaptation requires better social
insurance, better job training and education, and
wider coverage, for example, for unemployment
insurance which now reaches a much smaller proportion
of the workforce than unemployment insurance reached
thirty years ago, in terms of people who are laid off.
Wage insurance, a new idea that I think is a good one.
So if your next job pays less than your former job,
you get, say, half the difference for six months,
until you can reestablish yourself. That will help
enable the workforce to get new jobs more quickly. On
the minimum wage, Democrats want to raise it. It's
popular. But it ought to be raised, and that raise
ought to be linked to inflation. It ought to be
indexed, so we don't have to keep revisiting the
minimum wage issue every few years. The earned income
tax credits ought to be expanded. That's a more
efficient device than the minimum wage for insuring
that low wage workers get to earn enough to get out of
poverty.

So lay out an agenda, and take steps that will help
workers, particularly lower wage workers, move from
job to job and recover if they lose their employment.

That's right. Steps that make the overall labor force
more flexible, and give more people an opportunity to
get ahead. One of the most damning indictments of the
economy over the past six years has been median wages
have barely risen while the overall economy has grown
quite considerably. This is not sustainable in a
democracy. If people don't feel that they are sharing
the gains of growth, they will fight those aspects of
growth that jeopardize the stability of their jobs and
neighborhoods. They will fight against trade. They
will resist technological advances and changes. We can
already see this happening. The Republican Party used
to be, in recent years, a party of free trade. Many
House Republicans have become protectionists.
           
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