One. You should make it a habit to read Tyler Cowen and Alex Tabarrok's collective weblog entitled Marginal Revolution. I can't believe I haven't made it a rule to read this site regularly. It's brilliant. Both of these guys are economists at George Mason University in Fairfax, VA. Tyler Cowen is a very intriguing economist, incidentally. He's written in areas off the beaten path of economics - like in the area of art. He's written a book entitled In Praise of Commercial Culture, another entitled Creative Destruction: How Globalization is Changing the World's Cultures. Alex Tabarrok has also written and edited numerous interesting-looking books. One of them that I have on my "must read" list is his The Voluntary City.
Two. Foreign Policy has created something called The Globalization Index. There's one page that is particularly interesting having to do with the relationship between globalization (however they measure that) and religiosity that you can see here. They notice that among the lowest ranked countries on the index, there is a lot of clumping for religious participation. This supports the secularization thesis, which says that religion is an inferior good which people demand less of as their incomes increase. Or to put it less charitably, only stupid, poor people would believe in God, and as we as a people become more sophisticated in our technologicaly-integrated society and achieve higher levels of education, we learn that there is no God - only sound and fury signifying nothing.
But, if you look, there are some interesting exceptions. The article reads, "Ireland and the United States, which both rank in the top 10 in this year's Globalization Index, are among the most religious societies in the world. Conversely, Greece (ranked 28th) and Ukraine (ranked 43rd), exhibit low levels of religious participation. And Iran, which ranks last on our index, is actually less religious than highly globalized countries such as Canada (6th) and Portugal (16th)." I thought that was interesting - Greece, ranked 28th in the Globalization Index exhibits low levels of religious participation. If I'm not mistaken, Greece has a state religion - Greek Orthodoxy.
More work needs to be done, obviously, on the relationship between religious freedom and religious participation, as well as the relationship between economic growth and religious participation, but if you are at all interested in these questions, this index is worth reading. It also has some interesting charts relating women's incomes and globalization - not surprisingly, they find that higher ranked countries in the index have higher levels of "women well-being (as measured by a number of things like literacy rates, earned income, access to healthcare, etc.). Chances are, if you are an English major at, oh I don't know, the University of Tennesee-Knoxville (my alma mater), then you'll never hear anything remotely like this.
Posted by scott at March 5, 2004 10:38 AM | TrackBackScott,
According to this article, job creation is weak. So do you think US companies should continue outsourcing? Don't you think the government could create some incentives to slow things down until there is time to take in the work force?
Posted by: Bobber at March 5, 2004 11:30 AMBobber - I just printed out February 2004's BLS report, but have only read the first page. I can't really comment, but I will after I read the report. I really don't think that it's time to do anything. A lot of the unemployment we saw happen when Bush came into power was cyclical in nature. It was driven by the recession, and as we have exited the recession, we've seen gradually the unemployment rate falling. Unemployment is at 5.6% right now, which is down from its high in June 2003 of 6.2%. It is, if anything, continuing its gradual decline. This is, in my opinoin and the opinion of others, evidence to support that a lot of the job losses are not due to outsourcing at all, but are cyclical in nature.
SEcondly, though, the productivity statistics in the last two quarters have been high - unusually high, even, when compared to the slump that productivity has been in over the last two decades. Increases in average labor productitity (ie, output per worker) is the chief driver, not only of economic growth, but also of job creation. This is why Greenspan expects job creation to begin soon, and the reason why you do see, generally speaking, a lot of optimism about the labor market among economists.
Lastly, the statistics from the household survey are not completely accurate, nor are the ones from the occupational survey. They poll well for large, established firms and industries, where the random sampling is represntative, but not as well for smaller enterprises. Virginia Postrel, in this article shows how the occupational survey may be actually underreporting the amount of job creation occuring. It does not report self-employed people or partners in unincorporated businesses at all, for instance. And many of today's growing industries, she notes, adding jobs even amid the recession are smaller companies and self-employed individuals.
So, all this to say is that while the statistics are important, because they're one of the best that we have, taken as a whole, I think there's no reason yet to worry. The signs suggest the job losses stem from the business cycle, and since GDP is responded strongly, we should in time see a drop in unemployment too. Unemployment falls as GDP rises, but there's a bit of a lag due to the frictions within the labor market. Outsourcing, in the end, is not going to result in a complete loss of jobs - even now, the effect is microscopic compared even to the amount of unemployment we have each month caused by job churning and frictions in the market. Productivity is very, very high. So, while I do want to watch what happens - especially if we're seeing job loss in low skill industries where workers may lack sufficient skills to transition into growing industries - I think it's really too soon to worry at all. The main reason I think people are so tense is because of the 2004 election, and not because this is taking too long. I see reasons to be optimistic - like I said, unemployment has fallen from 6.2% to 5.6% since June of 2003.
Posted by: scott cunningham at March 5, 2004 12:20 PMThe econ blog looks good. I like the graph on oop costs vs health care spending. Thanks for the tip.
Posted by: Paul Baxter at March 5, 2004 12:43 PMUm, yeah, I know 'em both. Respectfully, I don't think I'll make visiting their website a habit.
Posted by: Jim at March 6, 2004 07:02 PM