[lbo-talk] Brad DeLong's dubious view of layoff restrictions

Wojtek Sokolowski wsokol52 at yahoo.com
Sun Apr 2 13:17:56 PDT 2006


--- Carl Remick <carlremick at hotmail.com> wrote:


> [The following breezy take on job layoffs is from
> Brad DeLong's current NY
> Times review of "The Disposable American: Layoffs
> and Their Consequences" by
> Louis Uchitelle -- Brad is, of course, professor of
> economics (tenured) at
> Berkeley:]
> Uchitelle's diagnosis that mass layoffs are a
> serious national problem is
> convincing. But for this card-carrying economist,
> his desired prescription
> is not. I see no examples anywhere in the world of
> economies that have taken
> steps in the direction he desires without severe
> side-effects. In Western

Actually, Brad's argument seems to make sense. Why would a for-profit firm be forced by law to perform a fundamentally governmental or charitable function (i.e producing public goods)?

A better solution is to have a public works program in which the state (or its instrumentality) would provide employment and necessary training to all unemployed people. Call it "labor Keynesianism" if you will. The added benefit of that solution is keeping the private sector wages high without the recourse to the minimum wage laws.

Wojtek

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