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Article Artículo

United States

Workers

The Cause of Low Employment

One of the primary explanations we’ve heard for today’s low employment rate is that workers don’t have the right skills to land jobs in today’s economy. This line of thinking is often employed by people who argue that monetary and fiscal stimulus are unnecessary since the problem can’t really be lack of demand.

There are a host of reasons to suspect that this explanation is wrong. One such reason is the decline in prime-age (25 to 54) employment for both men and women since 2000.

CEPR and Nicolas Buffie / April 18, 2016

Article Artículo

Summing Up the Clinton-Sanders Policy Debate in One Line

I like Jonathan Cohn personally and have great respect for his work as a reporter and writer on health care issues. However, I think he actually told readers the opposite of what he intended in his Huffington Post piece headlined, "this one line sums up the big Clinton-Sanders policy argument."

The big line in Cohn's piece is that Senator Sanders' proposal for a single-payer system would cause a single mother with two children, earning $26,813 a year, to pay $2,314 in payroll taxes rather than getting health insurance for her family free through Medicaid, as would be the case now. Cohn sees this as a major hit to this family, which is a serious problem with Sanders' proposal.

There are several points here worth noting. First, as Cohn points out, Sanders is also proposing a $15 an hour minimum wage. This means that if this single mother were working a full-time job, she would see her pay increase by almost $3,200 a year, even if her pay was only at the new minimum. Of course, since she is earning substantially more than the minimum wage now, it is likely that her pay would increase enough to leave her still well above the minimum. This means that she would be substantially better off with Sanders's agenda. (There are serious questions about whether we can have a $15 an hour minimum wage without a considerable impact on employment, but we'll ignore those for the moment.)

The second point is that Cohn has to be very selective in finding his victim here. Let's suppose that this single mother was getting health care insurance through her employer, as most workers do. If we say the employer was paying $5,000 a year for health care insurance, under standard economics assumptions, this money will find its way into the worker's paycheck. This means that she will be paying an additional $2,314 in payroll taxes, but this will be deducted from the $5,000 a year that her employer used to pay in premiums that now going into her paycheck. (No, this will not happen immediately and not be the story with all workers, but this is what all good economists believe will eventually be the case.) This means that this worker will be $2,686 better off as a result of the Sanders plan.

Dean Baker / April 18, 2016

Article Artículo

Haiti

Latin America and the Caribbean

World

Haiti President Calls for Electoral Verification Mission Opposed by International Donors

Interim President Jocelerme Privert has announced his intention to move forward with the creation of an electoral verification commission. But the commission faces significant pushback from both international actors who provide the bulk of the funding for Haiti’s elections and Haitian politicians connected to former president Michel Martelly.

Responding to the “unanimous expression” of civil society and political leaders, Privert declared on Monday that a new round of consultations would be held this week, aimed at establishing common terms of reference and identifying potential members for a verification commission. The body, which has yet to be formally organized, would be tasked with reviewing previous election results and electoral court decisions before moving forward with the as-yet-unfinished electoral process. A verification process is necessary, Privert said, to establish confidence and encourage “players to trust the [electoral council] and to participate in the upcoming elections.”

Political and civil society leaders have long demanded a verification commission, after earlier elections in 2015 were marred by violence and widespread reports of fraud. Official results from the first round of voting put then-President Martelly’s handpicked successor, Jovenel Moise, in first place, followed by Jude Celestin in second place. Celestin joined with other opposition candidates, demanding a verification and other changes to the electoral system before agreeing to participate in a runoff. On April 6, the coordinator of Celestin’s party LAPEH told the Haitian press that they would not participate in any second-round election without a verification commission first being established.

In response to Privert’s announcement of the commission, supporters of Moise have taken to the streets to denounce the move. They argue that the process will be used as a smokescreen to remove their candidate from the race. Moise’s hostility to a verification is shared by the U.S., the European Union and United Nations, all of which have come out against the verification commission and have urged Haitian authorities to complete the electoral process as soon as possible. “That’s one reason why the U.S. did not want to hear about verification … they know it will create fears” among Martelly’s supporters, an international official involved in the electoral process told me last week. Last week, some 60 leaders and organizations in the Haitian diaspora wrote to Secretary of State John Kerry, urging the U.S. to support a verification.

“We believe … a new assessment, or even verification, is not necessary,” U.S. Ambassador Peter F. Mulrean told the Haitian daily Le Nouvelliste last week, adding that additional financing for Haiti’s electoral process would be reassessed after seeing how the question of a verification commission was answered. “The last card to avoid a verification: no money,” said the international official. International donors have also withheld budget support from financial institutions like the Inter-American Development Bank and World Bank.

The stance of the international powers leaves many in Haiti puzzled. Pierre Esperance, the director of a prominent human rights organization and head of a local electoral observation mission team, wondered, “how can Haiti go to the second round without a verification?” Trying to push forward without a verification is likely to lead to a repeat of the street protests that rocked the capital almost daily in late 2015 and early 2016, and that contributed to the election’s cancellation in the first place.

“The verification process must take place. There is an awful lot of suspicions that there was fraud in that election process, and it would not suit any government that is elected without a verification process because there would always be that suspicion,” Sir Ronald Sanders, an Antiguan diplomat, told the Miami Herald last week.

Jake Johnston / April 14, 2016