Senate Finance Committee Chairman Max Baucus released his international business tax reform discussion draft yesterday. This is an ambitious and fairly thorough proposal and the Senator is to be commended on offering such a detailed draft with legislative language.

But from the start it fails in one crucial area—revenue. Senator Baucus apparently is looking for additional revenue for short-term deficit reduction, but the international tax reform discussion draft is intended to be long-term revenue neutral (more on this below). Corporate taxes already provide too little revenue; corporate tax revenue, which was about 4 percent of GDP in the 1950s, is equal to about 1.5 percent of GDP today. If corporate tax revenue as a percent of GDP had been at its 60-year average last year, corporate tax revenues would have been 43 percent higher, or about $120 billion. Meanwhile, corporate profits are currently at an all-time high.

Revenue aside (and it’s a big aside), it is difficult to fully assess the policy merits of a discussion draft that offers two options and is necessarily incomplete until the rest of the corporate income tax proposal is released. Nonetheless, I have a few comments, based on what has been released and my reading between the lines.

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In an article in JAMA (The Journal of the American Medical Association), Uwe Reinhardt writes about the improbability of “more skin in the game” as a solution to our health care spending woes. Increasing “cost-sharing” or creating “more skin in the game” are different ways to say that patients can/will/should pay more when they go to the doctor or hospital. It means that patients bear a higher share of medical costs, through higher deductibles, higher co-pays, higher so-insurance, and the like. And, it’s often argued that patients with “more skin in the game” will spend their health dollars more wisely. This was the rationale behind the excise tax on high-priced health insurance plans, a tax to not only raise revenue to pay for health reform but also as a way to thin out health plans, making patients pay more for care.

Reinhardt suggests that inducing patients to shop around for cost-effective health care is “about as sensible as blindfolding shoppers entering a department store in the hope that inside they can and will then shop smartly for the merchandise they seek.” The problem, he argues, is that health care has been historically “delivered behind the secure walls of a fortress that kept information on the prices charged for health care and the quality of that care opaque from public view.”

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At today’s confirmation hearing for prospective Federal Reserve Chair Janet Yellen, Senator Heidi Heitkamp (D-N.D.) asked Yellen about how Fed policy contributes to inequality, and specifically worried that recent Fed policies (ie, quantitative easing) have helped asset owners without doing much to help low- and moderate-income Americans.

There are a couple of things to note about this. For one, Yellen’s answer that faster growth and a better job-market recovery would do a lot to ease inequality was spot-on. The short version is that the Fed can do the most to address inequality by quickly getting unemployment down to very low levels. She specifically noted the episode of the late 1990s when very tight labor markets led to across-the-board wage growth. This is exactly right, and too often under-appreciated.

We noted in The State of Working America, 12^th Edition that even relatively rosy estimates of unemployment reductions imply that the Great Recession and the weak recovery that preceded it could well lead to typical Americans seeing essentially no wage and income growth for two full decades before all is said and done. This is an underappreciated policy catastrophe.

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The uproar over people having their insurance plans cancelled just as the ACA “exchanges” for purchasing insurance  are being set up has been amplified—probably enormously—by the failure of healthcare.gov. It is understandably anxiety-inducing to lose the insurance you have without receiving proper information on an available alternative.

Research done before the exchanges were set-up provided ample evidence that while some young, healthy, higher income people may face higher premiums (for now—but will get a better deal if they make it to the “not so young and healthy” phase of life—yah social insurance!), the vast majority of those in the individual market (and remember the uninsured!) will find better deals in the new system. So, while we have some clear evidence of that fact from states that are operating their own exchanges, people who live in states that refused to set up their own exchanges and free-rode on the federal government’s site don’t have the information yet.  The U.S. Department of Health and Human Services released a useful brief on health premiums in the federally facilitated exchanges for a set of individuals, with factors that could be used to adjust them to all family types. Unfortunately, interpreting the results are out of reach for most Americans and listing the plan features with the premiums would be far more useful. The Kaiser Family Foundation created a handy calculator, which gets closer by incorporating all ages and family types, but doesn’t provide nearly the breadth of information that could be made available.

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Yesterday’s Economic Snapshot showed how women’s and men’s employment prospects have fared in the Great Recession and its aftermath. Women have regained 2.9 million jobs, bringing them back to pre-recession levels, and men have gained 2.7 million jobs, still falling short 1.7 million jobs of their pre-December 2007 levels.

At first glance, it may appear that women are doing better than men. Men lost 3.4 million more jobs in the Great Recession and its aftermath than women—employment among men dropped 8.7% while women only saw a 4.0% drop in employment. By mid-2009, men had lost so many jobs that women’s payroll employment was 50% of the work force for the first time in history. In the recovery, men reversed the trend and gained more jobs than women (4.4 compared to 2.9) but, women still have a smaller jobs gap, 3.6 million compared to 4.4 million for men.

So what’s really going on here? To understand the gender dynamics of employment, it’s crucial to look at the gender breakdowns within industries. The table (an updated version of Table 5.8 from the State of Working America) below shows the distribution of male and female workers across industries and the relative change in male and female employment within their industries since 2007. The industries that have taken the biggest employment hits since 2007—construction and manufacturing, which dropped 22.3% and 12.9%, respectively—also have a disproportionately larger share of male workers than in other industries. Industries that have a larger share of female workers, such as health care and social assistance government, fared considerably better: health care and social assistance employment increased 11.5 percent since December 2007. One story of the Great Recession shows that women fared better than men, as they were disproportionately employed in industries that sustained less dramatic employment drops during Great Recession than industries that were male dominated.

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The Obama administration has been rushing to complete a trade agreement with a dozen Pacific Rim countries including Japan, Canada, Malaysia and Vietnam, with key negotiations set to start next week in Salt Lake City. A bi-partisan group of more than 170 Democrats and Republicans sent letters to the president this week signaling their intent to oppose so-called “Fast Track” procedures (also known as Trade Promotion Authority) which would allow the White House to submit trade agreements to Congress without the opportunity to amend the deals.

Congress is wise to pause before giving the president carte blanche to negotiate new trade deals and wise to demand fuller consultation with Congress on the content of those deals. Fast track authority was first developed by the Nixon administration to rush trade agreements through Congress without threat of amendment. But deals such as the North American Free Trade Agreement and the recently ratified Korea-U.S. trade agreement (KORUS) have failed to live up to expectations precisely because they are much more than simple trade agreements. These agreements are concerned with stimulating foreign investment and remaking a host of regulatory policies covering labor law, patents and copyrights, food safety standards, and state owned enterprises, as well as financial, healthcare, energy, telecommunications, and other service industries, as noted in a letter this week from 151 Democratic members of Congress to the president. KORUS and dozens of other trade and investment deals have resulted in a huge surge in outsourcing and have eliminated millions of jobs, especially in U.S. manufacturing.

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Last week, I wrote that Congress has been tying the hands of the Postal Service by limiting its ability to develop new products or to price its services competitively. Worse, Congress filled the Postal Service’s pockets with weights to drag them down financially, adding tens of billions in costs for retiree health insurance on a schedule no other corporation has to live with, while charging it more than $50 billion for pensions earned before the Postal Service was incorporated in 1971—costs that the federal government should bear, not the Postal Service.

It’s a recipe for killing the Postal Service, and postal management has sometimes seemed like a willing victim. Most notoriously, they’ve pushed to end six-day delivery of mail, even though customers love it.

But this weekend brought good news. Recognizing the strength their unparalleled, universal delivery system represents, postal management has negotiated something new: not subtracting, but adding a day of package delivery on Sunday. For now it’s limited to delivering packages for Amazon in New York and Los Angeles, but once these deliveries have been extended to the rest of the nation, who knows what other customers will decide to take advantage of this new opportunity?

I firmly believe that if the Postal Service is freed to compete more fairly, without having obstacles strewn in its path by a hostile Congress, it can rise to the challenge of maintaining universal delivery at a price that customers can afford. The Postal Service and its hundreds of thousands of employees deserve the chance.

The next time you read in the newspaper or hear on TV that there is a shortage of construction workers and we have to import tens of thousands of workers from abroad in order to have enough construction labor, remember this memo from Jason Furman, Chair of the Council of Economic Advisers:

“Construction employment rose by 11,000 in October and is up 185,000 over the past year, but remains 1.9 million jobs below its previous peak, underscoring the importance of continued strengthening in housing markets and investments in infrastructure. Of the 185,000 increase in construction employment over the past year, the bulk (104,000) is in residential construction, while 65,000 are in non-residential construction, and 16,000 are in heavy and civil engineering construction. The gains in residential construction are consistent with the recovery we have seen unfolding in the housing sector, but additional steps still must be taken to create a more durable and fair system that promotes responsible homeownership. Moreover, the fact that employment in non-residential and heavy and civil engineering construction has grown slowly is an important reminder that we should also be looking for opportunities to invest in America’s roads, bridges, and schoolhouses.”

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The lengths to which businesses will go to get cheap labor are boundless.  Tech firms, despite their luster, are no better in this regard than landscaping firms, hotels, or construction companies. Most tech firms want to reduce their labor costs (except for their executives), and a surprising number seem to treat the law as an obstacle to get around. I’ve written about the Justice Department’s settlement with 6 of the most famous information technology (IT) companies in America over anti-trust charges involving a conspiracy to suppress wage demands, and a subsequent lawsuit filed by the employees who would have been harmed by the conspiracy.

A newer case came into the spotlight last week.  The Justice Department’s $35 million settlement of civil fraud charges against Infosys, a firm whose business model is largely based on the outsourcing and offshoring of IT work to India, facilitated by using the H-1B guestworker visa, exposed a pervasive scheme of visa abuse in the H-1B and B-1 “business visitor” visa categories. This scandal lends support to the efforts of Sen. Charles E. Schumer (D-N.Y.), Sen. Richard J. Durbin (D-Ill.), and Sen. Charles Grassley (R-Iowa) to put new limits on IT outsourcing firms.

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There is a lot of talk about robots these days, as if technological change has led to weak job creation, caused wage inequality, and even caused the profit share of the economy to increase as workers’ share (compensation) falls. We have definitely had problems with employment growth and growing wage inequality, alongside a profit boom not just during the Great Recession and its aftermath but since 2000—and for wage inequality, for two decades prior. Is technology driving all this? I think not.

This post tackles the issue of whether robots slowed job growth in the 2000s (my colleague Josh Bivens has addressed this previously, but for the recovery). In the near future I will be addressing whether robots are responsible for our current wage inequality. Spoiler alert: they aren’t.

MIT professors Andrew McAfee and Erik Brynjolfsson wrote the influential book Race Against The Machine, which has driven much of this conversation. They label the disconnect between employment growth and productivity growth in the 2000s the “Great Decoupling.” Moreover, they argue that there has been an “acceleration of technology” that has “hurt wages and jobs for millions of people” even as “digital progress grows the overall economic pie.” Brynjolfsson and McAfee know a lot more about technology and its impact on firms and work than I do, but attributing the job slowdown in the 2000s to robots or digitalization overlooks a simple alternative answer: slow aggregate output growth caused by the bursting of asset bubbles. In fact, they do not offer much evidence to connect the technological trends (robots and digitalization) they document to the aggregate job, wage and inequality trends they, and I, care about.

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