Upbeat businesses sentiment is good news for investments, which continues to be a drag on some economies. In Brazil, for example, investments grew for the first time in three years in Q3 In the Eurozone, spending on machinery and equipment has been improving after suffering much in —, thereby aiding economic activity. In addition to greater optimism, businesses may feel encouraged to invest more due to widespread expectation that corporate profitability will improve and the labor market will strengthen further. It would be a dampener to talk about risks when key indicators are hinting at a continued uptick in economic activity.
But, of all things history offers insights to, risks would be foolhardy to ignore. An elongated period of loose monetary policy and strong growth in consumer spending in emerging economies have led to a rise in leverage. The surge in non-guaranteed private sector credit particularly stands out.
Over —, private sector non-guaranteed long-term outstanding debt grew at an average annual rate of In the Asia-Pacific region, the credit binge since is most evident for households. For many economies in the region, household debt as a share of disposable income is now higher than what it was in the United States prior to the outbreak of the Great Recession figure 7. High household debt is not the only risk weighing on policymakers this year.
Normalization of monetary policy by the Fed and ECB may reverse capital flows into emerging economies, thereby denting their exchange rates and external borrowing costs. Adding to the list of concerns is rising protectionist rhetoric and a move away from a multilateral trading order.
While there is a question mark hanging over the North American Free Trade Agreement as we know it, negotiations for a smooth Brexit have suffered in recent days. Should manufacturers move factories? Will financial services in Europe relocate away from London?
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Who should retailers bank on: the tried-and-tested US consumer or the happy spender in Asia? For businesses, adding to the discomfort will be technology-related disruptions and rising geopolitical risk in the Korean peninsula and the Middle East. The embers of such fires, if they were to burn, will be felt much beyond the regions themselves, spurring a vicious circle of economic and financial woes. A big casualty, as history again teaches us, would be the current global economic revival. Economists, as always, will be hoping that cool heads and warm hearts prevail.
Rumki Majumdar is a macroeconomist and is based in Bengaluru, India. Akrur Barua is an economist and is based in Mumbai, India. Unless stated otherwise, all data is sourced from Haver Analytics. View in article. Daniel Bachman and Dr. OECD database, sourced on January 4, International Monetary Fund, Global financial stability report : Is growth at risk? See something interesting? Simply select text and choose how to share it:. The global economy: Set to hit the gas, yet wary of roadblocks has been added to your bookmarks.
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Welcome back. Still not a member? Join My Deloitte. The global economy: Set to hit the gas, yet wary of roadblocks By Dr. Rumki Majumdar , Akrur Barua. Article 29, January, Rumki Majumdar. Akrur Barua. Authors Rumki Majumdar is a macroeconomist and is based in Bengaluru, India. Acknowledgements Cover image by: Tushar Barman. View in article Ibid. View in article Dr. View in article International Monetary Fund, Global financial stability report : Is growth at risk? View in article Barua, Asian exports.
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Another possibility is that it is too early to draw definitive conclusions as to the impact of the two crises on labor. The upsurge in union membership occurred several years after the stock market crash. Although it does not seem likely that anything comparable to the giant upsurge that followed the passage of the National Labor Relations Act of will recur, that sort of outcome cannot be ruled out entirely. We may just now be seeing the initial fruits of a post-recession organizing upsurge. In and union density inched up slightly in a few states and industries Milkman and Luce ; Bureau of Labor Statistics a.
The number of large strikes, and the number of workers involved in strikes, also increased slightly in Bureau of Labor Statistics b. Unions and labor movement allies alike are exploring alternative organizational forms that in some respects recapitulate the strategic repertoire of the pres labor movement see Milkman , It is to those developments that we now turn. The besieged organized labor movement began to experiment with a variety of new initiatives in the s and early s.
Several large unions left the AFL-CIO in , forming a rival federation designed to reposition the unions to better cope with the increasingly hostile institutional environment, and again with a professed commitment to expanding new organizing. Although these efforts led to some successful union drives, they were typically modest in scale and thus insufficient to reverse the relentless decline in union density.
Other campaigns, such as the effort to pass the Employee Free Choice Act, failed entirely to achieve their goals. Unionism continued to decline, and the situation became increasingly desperate as political attacks on collective bargaining ramped up after the Great Recession. These groups. Focused especially on immigrants and others concentrated at the very bottom of the labor market, these organizations emerged as highly effective advocates for low-wage workers.
They succeeded in calling media and public attention to labor and employment law violations, such as payment below the legal minimum wage or in some cases outright nonpayment , and won legal remedies for some of the victims. Initially the traditional unions were deeply skeptical of the effectiveness of these approaches, but that gradually changed in the s as more and more individual unions as well as the AFL-CIO began to partner with worker centers. House of [End Page ] Representatives in late , would become the law of the land. Millions of immigrants demonstrated against this legislation in the spring of , mobilized by a coalition of worker centers and immigrant rights groups, with support from some labor unions as well.
Immediately afterward, formal partnerships between the AFL-CIO and worker centers began to develop, a process that has continued ever since. The second turning point was the Occupy Wall Street uprising, whose meteoric rise in the fall of transformed the national political debate and raised public awareness about the growing inequality between rich and poor. Although sponsored by a traditional labor union, the SEIU, this campaign essentially has adopted the strategic repertoire of the worker center movement. There is no immediate prospect of union recognition, but the effort has succeeded in shining a bright light on the low wages and other workplace abuses in this industry.
The fifteen-dollar-an-hour demand first floated by the fast-food organizing effort also sparked campaigns to raise the minimum wage in key cities and counties where unions still have a strong presence.
Seattle and SeaTac in Washington State, along with others, including San Francisco, Emeryville, and Los Angeles in California, have passed laws that will raise the overall minimum hourly wage to fifteen dollars or higher in the coming years, and advocates have won more modest increases in minimum wages in over a dozen other cities and states across the nation.
In alone, fourteen states raised their statewide minimum wage Luce Public approval of unions has also increased, climbing back from its low point in Saad There are no systematic data available on the scale of these alt-labor efforts, but we can sketch the trajectory of their recent growth by drawing on a variety of published accounts. There were worker centers in the United States in Fine , and in Fine , The number grew substantially in the aftermath of the Great Recession, to over by Fine , and, according to one recent estimate, to a total of by Narro In addition, several worker centers that began as local operations have expanded into national operations.
Many of these organizations also have successfully litigated claims of wage theft and won back pay for substantial numbers of workers. We can be a bit more precise in estimating the numbers of workers who have benefitted from recent increases in the minimum wage. These are summarized in table 4 , which suggests that over 2 million workers have been impacted by these new laws at the local level from to early alone. Table 4 does not include the statewide minimum-wage increases that have been legislated in the aftermath of the Great Recession; an Economic Policy Institute study estimates that those laws had affected 3.
Notes : Estimates of workers impacted come from a variety of sources. Where possible, we used city studies, academic reports, or newspaper articles that estimated the impact, or public company statements announcing wage increases. In cases where these sources provided a range of potential workers covered, we used the midpoint.
In a few cases, we calculated our own estimate of potential impact extrapolating from data for cities similar in population size. For further details on this methodology, please contact the authors. San Francisco passed an initial citywide minimum wage in ; voters then passed an increase in the wage rate in States have set and raised their minimum wages for decades, and increases often come in waves examples include and , but local minimum-wage laws are a relatively recent phenomenon.
As of , only a handful of cities had passed their own minimum wage ordinances, but between and early , thirty-two municipalities did so. In September , seven cities in the San Francisco Bay Area announced plans to work together to establish a regional minimum wage, another recent innovation. Organized labor has also promoted a variety of legislative measures at the state and local levels aimed at improving the situation of low-wage workers, mandating benefits such as paid family leave and paid sick days, and improving enforcement of labor standards.
Milkman and Appelbaum ; Reich, Jacobs, and Dietz Both these legislative initiatives and the spurt of alt-labor organizing efforts resemble pre—New Deal labor movement strategies, in contrast to the NLRB-based union organizing campaigns that became common in the mid-twentieth century see Milkman In the Progressive Era of the last century, labor reform groups and their middle-class allies publicized sweatshops and employer abuses and provided educational and social services for immigrant workers in much the same way that worker centers do today Flanagan ; Stromquist These reformers also promoted unionization and campaigned for progressive legislation, including the first state minimum-wage laws although [End Page ] at the time these applied only to women and children.
In the absence of systematic data, we can only sketch the achievements and prospects of the new alt-labor efforts and the flurry of legislative activity that have emerged in a fragmentary way. To be sure, these developments have had no apparent effect on the steady decline in union membership and density. But like the parallel efforts a century ago, they could represent the embryo of a Polanyian counter-movement in response to the posts wave of neoliberal marketization. To sum up: Although the Great Recession does not appear to have been a significant factor in the long-term decline in union density, which had been under way for many decades, the financial crisis nevertheless did impact the labor movement.
It opened up political space for right-wing attacks on the rights of unions to exist and bargain collectively in both the private and public sectors, further eroding an already hostile institutional environment. Steep job losses in traditionally unionized industries during and after the Great Recession added to the challenge for the labor movement in maintaining union density. An exception is Lee P. Stepina and Jack Fiorito , who reassessed the earlier literature in the context of their own analysis of data for the period from to They argued that the unemployment rate is not a significant predictor of unionization trends, explaining the discrepancy between this finding and those of earlier analysts by reference to the widespread provision of unemployment insurance after the New Deal.
This last point parallels the observation by Bruce Western and Claus Schnabel that the otherwise pro-cyclical pattern of union growth since the s is absent in countries that have adopted the Ghent system of union-administered unemployment insurance.
In the Ghent system, unions, rather than the government, administer social welfare programs and distribute benefits, particularly unemployment insurance. The federal government briefly stopped collecting data on union membership under the Reagan administration, so no data are available for Over time, there have been some changes in the data collection methodology as well.
For details see Barry T. Hirsch and David A. Macpherson and Gerald Mayer Google Scholar. Project MUSE promotes the creation and dissemination of essential humanities and social science resources through collaboration with libraries, publishers, and scholars worldwide. Forged from a partnership between a university press and a library, Project MUSE is a trusted part of the academic and scholarly community it serves.
Cohen, Patricia. Commons, John R. History of Labor in the United States. New York: Macmillan. Cooper, David. Davey, Monica. Dunlop, John T. Lester and Joseph Shister. Evans, Peter. Farber, Henry. Bonn, Germany: Institute for the Study of Labor. Fine, Janice.
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