Triple Crisis blogger Jayati Ghosh published the following opinion article in Boston Review as part of the forum Back to Full Employment, in which Robert Pollin urges the Obama Administration and Congress to put full employment back on the agenda. Her article responds to Pollin’s piece and highlights how developing countries have struggled with the policy challenge of full employment over the past 20 years.
Full Employment For Growth
Robert Pollin has identified the central challenge of economic policy today: how to sustain high employment levels and jobs with decent wages and conditions. This argument is relevant not only for the U.S. economy, but also for much of the developing world, including its “successful” countries in which large increases in GDP have not translated into high-quality employment.
Over the past two decades, most developing countries have relied on an economic strategy focused almost exclusively on exports to rich markets. This strategy delivered rapid growth in a few countries, such as China, but failed to do so in most others. Furthermore, countries that rely on exports for growth need to prioritize competitiveness in global markets, which means low wages and a currency kept cheap relative to the dollar, euro, yen, and British pound. This is why, even in the economies that showed great success as exporters, levels of consumption by the overwhelming majority of working people have largely remained stagnant.