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ISSUE GUIDES: Economy

CONSIDER THE CHOICES

 

PERSPECTIVES IN BRIEF

Use the free market and free trade to create jobs
Secure and improve American jobs
Educate workers to compete in the global economy

The free market system is the most effective way to provide jobs and higher wages. Americans believe in rewarding effort, letting people work hard and get rich if they can.Government policy should reflect those values and the first principle should be to stay out of the way of business. Its private industry that creates jobs, not government, and government should encourage business by low taxes, minimal regulation and international free trade. Thats the best way to promote growth, and sustained growth will generate new jobs,higher wages and salaries, and a higher standard of living for most Americans. Yes, there are ups and downs in the economy, and people will lose jobs during recessions, but in the long run we always gain them back.
The way things are now, the rich are getting the lions share of the benefits of economic growth. But most of the labor force the people who run the machines,provide services, clean offices,and keep the economy going day to day are not sharing in the gains. Worse, theyre at constan risk of being downsized out of their jobs, or being forced to work longer hours to cover for downsized coworkers. Thats a big reason why the gap between rich and poor has widened in the last couple of decades. Because of globalization, were allowing American jobs to go overseas.Because of a focus on short-term gain and high stock returns, were encouraging corporations to pay lower wages and cut benefits. The measure of the economy shouldnt be stock prices it should be whether we have enough good jobs so that all Americans can earn a decent living.
We cant stop the global economy from changing, nor should we globalization brings a lot of benefits. But we should better prepare workers to adapt to it. We need to educate workers so they can constantly be learning new skills, constantly coming up with new ideas. Any job might be lost because of technological changes, foreign competition, or a recession. Thats why so few Americans keep one career for a lifetime any more. But too many people dont have the chance to keep up. Millions of children from low-income families attend second-rate schools. And the soaring cost of higher education has kept adults from changing careers. Whats needed is an expanded effort to improve Americas schools and to provide opportunities for older workers to reinvent themselves.

PERSPECTIVES IN DETAIL

Use the free market and free trade to create jobs
Secure and improve American jobs
Educate workers to compete in the global economy


What should be done?

  • Lower taxes, especially on savings and investments. With lower taxes, both businesses and individuals will have a greater incentive to invest in new ideas.
  • Reduce the budget deficit by cutting spending so government borrows less. That will make more funds available to invest in new or expanding businesses. It will also encourage more people to buy homes or cars to stimulate the economy.
  • Reduce unnecessary regulations to give businesses more freedom.
  • Continue the trend toward globalization by expanding free trade pacts like NAFTA.
  • Limit free trade agreements to protect American jobs. Use the tax code to discourage offshoring and other ways of moving jobs overseas.
  • Use tax incentives to encourage companies provide benefits like health insurance to low-wage and part-time workers, particularly in service industries.
  • Raise the minimum wage to help those at the low end of the income scale. Expand unemployment benefits to help workers through bad periods.
  • Bolster unions to raise the wages of ordinary workers
  • Increase funding for public schools so all children acquire the skills they need to succeed.
  • Spend more money on college grants and loans, particularly for older students returning to college and for community colleges.Provide tax incentives to encourage companies to underwrite tuition for their employees.
  • Expand training and apprenticeship programs to propel more high schools graduates into skilled jobs.
  • Expand small-business loan programs, so that more people can strike out on their own and innovate rather than working for someone else.


    • Arguments For This Approach

  • The economy does best with minimal government intervention.The free market system consistently provides a higher standard of living than any other method.
  • Americas free market economy is outperforming foreign economies in which the government plays a broader role. Theres no reason to tamper with a formula thats working well.
  • Free trade directly benefits American consumers with lower prices and a wider choice of products.
  • Free trade may mean some jobs move to other countries, but new jobs and new industries will be created at home.
  • First free trade helped move blue-collar manufacturing jobs overseas, and now white-collar jobs are following them. Weve got to protect our own.
  • Theres a real human cost to an unrestrained free market system.Too many corporations eliminate jobs to meet Wall Streets demands to keep profits up, instead of looking for new markets or other kinds of savings.
  • The fact that millions of low-income American families are just hanging on economically, even when times are good, is immoral.
  • Other industrial nations have shown that its possible to maintain a successful capitalist system while keeping inequality in check.
  • The secret to American economic success has been innovation.We need to educate workers to help them come up with new ideas, and encourage them to start their own businesses to exploit them.
  • Because of the soaring cost of higher education, too many low income Americans cant go to college and are shut out of good careers.
  • As a nation, we waste a lot of talent by failing to train a large part of the workforce to its potential.
  • Skilled work always pays more than unskilled labor. And better-educated workers will have more options if their job disappears through no fault of their own.


    • Arguments Against This Approach

  • This free-trade, free-market approach encourages jobs to move overseas, where people work for less. And that, in turn,forces American workers to accept less if they want to stay employed at all.
  • This approach favors rich investors and corporations over the interests of average workers.
  • This looks good on paper, but what about the people who get left behind in the free market? This approach is opening a widening gap between rich and poor in this country.
  • Cutting taxes, slashing regulations,and cutting down government sounds appealing. But public spending on schools, training programs, and services to children benefit everybody and are necessary if were serious about making equal opportunity a reality.
  • Sure, some jobs are moving abroad, but new jobs have always sprung up to replace them at home. In the long run free trade benefits everyone, overseas and at home.
  • Its common sense for business to use the fewest workers possible to get the job done. Plus, its better for a business to cut some jobs or send some work overseas than to go under and put all the employees out of work.
  • Raising the minimum wage just discourages businesses from hiring.The market should decide what a job is worth, not the government.
  • Corporations have a responsibility to their stockholders to turn a profit. And the millions of ordinary people who buy stock for their retirement funds get a very real benefit from this.
  • No matter how smart Americanw orkers are, there will probably be someone just as smart in another country who'll work for half the salary. We need to stem the loss of jobs overseas.
  • This choice accepts that corporations can do as they please and cut jobs. We need to make companies recognize the social costs of their decisions.
  • This allows real jobs to move overseas now while taking it on faith that new, better jobs will replace them here.
  • This does nothing for the people who do the necessary but unpleasant service jobs in our economy.We need to make sure that honest work pays a living wage.


    • QUESTIONS AND ANSWERS: HOW THE PERSPECTIVES DIFFER

    Use the free market and free trade to create jobs
    Secure and improve American jobs
    Educate workers to compete in the global economy

    Q: What should government do to improve the American standard of living?
    A:
    Remove unnecessary regulations that discourage and impede economic growth. Reduce taxes on upper-income earners. And reduce government spending. The best way to increase everyone's slice of the economic pie is for government to let the free market work, and permit the overall economy to grow as rapidly as possible.
    A:
    At a time when the rich are rapidly pulling ahead, while many workers are struggling just to stay where they are, government should take additional measures to ensure that all workers share more equally the fruits of economic success. The tax structure should be more progressive. The minimum wage should be raised. And low-income Americans should be helped by raising government transfer payments.
    A:
    Government should do what's necessary to ensure that everyone gets a fair start on the road to economic success. That means an equal opportunity to attend good schools, and an equal opportunity to prepare for well-paying jobs.


    Q: What is the main value that should guide public efforts to steer the economy?
    A:
    Free markets, and plenty of incentives for individuals to start their own entrepreneurial ventures.
    A:
    Fairness in the rules and policies that determine who benefits from economic growth.
    A:
    The most important value is that everyone should have a fair start, an equal opportunity to move into a position where they can earn a good living.


    Q: Is the income gap between rich and poor a problem?
    A:
    No. If the economy is growing, everyone will eventually benefit from it.
    A:
    Yes. A huge income gap is unjust, divisive, and demoralizing for many Americans.
    A:
    There's no guarantee of equal outcomes. What we should be worried about is the gaps in educational opportunity, which prevent many people from entering the labor market with good skills and a good chance to succeed.