Political Economy Research Institute

The Comparative Political Economy of Unemployment Rates

In this working paper, David Howell asks whether the prevailing view of cross-country unemployment rates is sufficiently comprehensive. Rather than attributing all cross country variation to internal labor market institutions and the equilibriums that result from them, Howell asks whether we need to look at a broad comparative political economy framework to explain the demand for employment in any country, and the translation of that demand to actual employment levels. Howell points to evidence that institutional models grounded in high levels of social and political consensus can produce low unemployment, low wage inequality and substantial income security.

>> Download “Institutions, Aggregate Demand and Cross-Country Employment Performance: Alternative Theoretical Perspectives and the Evidence”

Environmental Justice across Race and Class Lines

In this new working paper, Michael Ash, James Boyce, Grace Chang and Helen Scharber examine the ways that exposure to toxic air pollution from industrial facilities in urban areas of the U.S. varies geographically. Using data from the U.S. Environmental Protection Agency’s Risk-Screening Environmental Indicators project, the authors find that within any given urban area, racial and ethnic minorities tend to face greater exposure to these toxins. They explore the political, income, and social factors that influence firms’ decisions about where to site polluting facilities, and their findings reinforce the existence of a tight nexus between environmental quality, race, and power in the U.S. The evidence they present suggests that efforts to reduce these disparities could lead to environmental improvements that benefit all Americans. 

>> Download “Is Environmental Justice Good for White Folks?”

The Role of Foreign Investment in the Transition from Socialism to Capitalism

In this working paper, Patrick Hamm and Lawrence P. King examine the role of foreign direct investment (FDI) – capital investment in one country by firms owned in a different country – in facilitating transitions from socialism to capitalism.  Past studies have found that FDI plays every possible role, from being the driving force behind this transition to substantially obstructing it. Hamm & King also find contradictory conclusions in the literature as to the role of FDI in facilitating transformations of atrophied state-owned economies into competitive market systems. The authors offer a systematic reevaluation of the developmental dynamics surrounding FDI, focusing on the post-socialist experience. Then turning to direct analysis of a dataset of 31 transitional economies, they conclude that foreign investment is not associated with either positive or negative outcomes, but that its effects depend on the presence of a relatively well-functioning state.

>> Download “Post-Manichean Economics: Foreign Investment, State Capacity and Economic Development in Transition Economies”

A Living Wage for New York City

The New York City Council is considering a narrow living wage ordinance, which would guarantee $10 an hour to workers at development projects receiving public subsidies. As a result, long-discredited arguments against decent wages are being revisited in the media. In this op ed in the New York Daily News, Robert Pollin revisits the debate on the economic impacts of decent wages for workers--and reminds New York readers that this law would deliver real benefits to the affected workers and their families, while having no significant negative impacts on the economic well-being of businesses and the city at large.

>> Read "Should New York demand a living wage?"
>> Read PERI's living wage studies of Nashville, Santa Monica, Boston, New Haven & Hartford, Santa Fe, Albuquerque, and New Orleans
>> Read about the book A Measure of Fairness, which brings together recent from living wage studies from around the country

The Effect of Derivative Regulation on Food and Oil Prices Worldwide

Decisions made in Congress this month will effect not only the financial markets in the U.S., but the day-to-day living costs of people around the world, particularly in places where subsistence living levels mean that half or more of a family's income is spent on basic food commodities. In this post on the Huffington Post and letter to Congress, Robert Pollin and SAFER economists explain how regulation of the derivatives market--currently hanging in the balance as part of the Finance Reform bill--can potentially stabilize commodity markets and provide for greater financial security for farmers and consumers around the world.

>> Read "Reining in Speculation on Oil and Food Prices through the Financial Reform Bill" in the Huffington Post
>> Read the SAFER letter to Congress

Gordon Hall