IMF's Balakrishnan: Economic Policies Should Focus on Labor Market - FACTOIDS
Help us Expose Political Liars!
Find and post them ALL here!
Signup Today and help us
Expose these LIARS!
   

IMF's Balakrishnan: Economic Policies Should Focus on Labor Market

The labor force participation rate hit a 36-year low earlier this year and stood at only 62.9 percent in July.

That's a big problem for the economy, notes Ravi Balakrishnan, deputy division chief of the North American division of the International Monetary Fund's Western Hemisphere Department.

"It's not supposed to be this way," he writes in a blog post. "As the U.S. economy recovers, hirings increase and people are encouraged to look for jobs again."

But that's not how it has panned out. "Fully one-half of the gains in participation rates between 1960 and 2000 . . . have been reversed in the last six years," Balakrishnan explains.

As for the economy, "the dynamics of the U.S. labor market is perhaps the most critical — and uncertain — issue in economics today," he notes.

The size of our workforce will be a crucial determinant of the rate at which the economy grows, Balakrishnan argues.

In addition, "the extent to which the recent declines in participation rates are reversible will be the principal factor in deciding future wage and price inflation." That, in turn, will determine the timing and pace of Federal Reserve interest rate hikes, he maintains.

"Policies in the coming years should focus on maximizing the potential of the U.S. labor market. Demographics cannot be reversed but progress can still be made," Balakrishnan states. "Economic policies that get the country growing again will help strengthen the labor market, raise wages, and bring people back into the labor force."

Meanwhile, many experts are worried about the fact that the jobs lost during the 2007-09 recession paid a lot better than do the ones replacing them.

"While it is no secret the recession wiped out millions of higher-paying jobs and forced many former middle-class workers into second-rate jobs, the longer-term effects of this phenomenon could pose obstacles to continued economic growth," according to The Fiscal Times.

 
comments powered by Disqus
 
 
No Liar of the Day has been posted yet. Post yours and vote today
Please help us support this website. Any tiny donation helps us keep up the Good Fight!
Headline
Whoops! FBI 'Loses' Five Months Worth of Texts Between Agents Peter Strzok and Lisa Page
Newly released Clinton emails include classified messages, show knowledge of security problems: watchdog |
Leaked Memo: DACA Amnesty Is 'Critical Component of Democratic Party's Future Electoral Success'
BREAKING: New Evidence Emerges Huma Abedin Lied to the FBI!!
Recent Articles
Recent Articles







 
 

Aggregated content may contain copyrighted material. Such material is made available for educational purposes only. This constitutes a 'fair use' of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law.