The New Division of Labor or Taking Sides

The New Division of Labor: How Computers Are Creating the Next Job Market

Author: Frank Levy

As the current recession ends, many workers will not be returning to the jobs they once held--those jobs are gone. In The New Division of Labor, Frank Levy and Richard Murnane show how computers are changing the employment landscape and how the right kinds of education can ease the transition to the new job market.

The book tells stories of people at work--a high-end financial advisor, a customer service representative, a pair of successful chefs, a cardiologist, an automotive mechanic, the author Victor Hugo, floor traders in a London financial exchange. The authors merge these stories with insights from cognitive science, computer science, and economics to show how computers are enhancing productivity in many jobs even as they eliminate other jobs--both directly and by sending work offshore. At greatest risk are jobs that can be expressed in programmable rules--blue collar, clerical, and similar work that requires moderate skills and used to pay middle-class wages. The loss of these jobs leaves a growing division between those who can and cannot earn a good living in the computerized economy. Left unchecked, the division threatens the nation's democratic institutions.

The nation's challenge is to recognize this division and to prepare the population for the high-wage/high-skilled jobs that are rapidly growing in number--jobs involving extensive problem solving and interpersonal communication. Using detailed examples--a second grade classroom, an IBM managerial training program, Cisco Networking Academies--the authors describe how these skills can be taught and how our adjustment to the computerized workplace can begin in earnest.

Interesting textbook: Basic Marketing or Strategic Management

Taking Sides: Clashing Views on Economic Issues

Author: Frank J Bonello

This Thirteenth Edition of TAKING SIDES: CLASHING VIEWS ON ECONOMIC ISSUES presents current controversial issues in a debate-style format designed to stimulate student interest and develop critical thinking skills. Each issue is thoughtfully framed with an issue summary, an issue introduction, and a postscript. An instructor’s manual with testing material is available for each volume. USING TAKING SIDES IN THE CLASSROOM is also an excellent instructor resource with practical suggestions on incorporating this effective approach in the classroom. Each TAKING SIDES reader features an annotated listing of selected World Wide Web sites and is supported by our student website, www.mhcls.com/online.

Table of Contents:

Preliminary Contents

Unit 1 Microeconomic Issues

Issue 1. Are Profits the Only Business of Business?

YES: 2047 Milton Friedman, from "The Social Responsibility of Business is to Increase its Profits," The New York Times Magazine (September 13, 1970)

NO: 24156 Robert Almeder, from "Morality in the Marketplace Reflections on the Friedman Doctrine," Prometheus Press (June 20, 1905)

Free-market economist and Nobel Lauerate Milton Friedman contends that the sole responsibility of business is to increase its profits. Philosopher Robert Almeder maintains that if capitalism is to survive, it must act in socially responsible ways that go beyond profit making.

Issue 2. Are CEOs Paid What They Are Worth?

YES: 45434 Ira T. Kay, from "Don't Mess With CEO Pay," Across the Board (January/February 2006)

NO: 45433 Edgar Woolard, Jr., from "CEOs Are Being Paid Too Much," Across the Board (January/February 2006)

Ira T. Kay, businessman and author, defends current CEO pay practices. He argues that “Empirical studies show that executive compensation has closely tracked corporate performance,” and that rejecting pay-for–performance will hurt both workers and stockholders. Edgar Wooland Jr., former CEO and chairman of Dupont, describes fourth myths regarding the compensation received by corporate business leaders. Inparticular, he believes no one but CEOs get “paid excessively when they fail.”

Issue 3. Is There Discrimination in U.S. Labor Markets?

YES: 24174 William A. Darity, Jr. and Patrick L. Mason, from "Evidence on Discrimination in Employment: Codes of Color, Codes of of Gender," Journal of Economic Perspectives (Spring 1998)

NO: 24175 James J. Heckman, from "Detecting Discrimination," Journal of Economic Perspectives (Spring 1998)

Economics professors William A. Darity, Jr., and Patrick L. Mason assert that the lack of progress made since the mid-1970s toward establishing equality in wages between the races is evidence of persistent discrimination in U.S. labor markets. Economics professor and Nobel Laureate James J. Heckman argues that markets—driven by the profit motives of employers—will compete away any wage differentials that are not justified by differences in human capital.

Issue 4. Is the New Medicare Part D Drug Benefit Good Health Care Policy?

YES: 45436 Mark McClellan, from "Generic Drugs and the Medicare Prescription Drug Benefit," Testimony for the Senate Special Committee on Aging (September 21, 2006)

NO: 45437 Jagadeesh Gokhale, from "An Evaluation of Medicare's Prescription Drug Policy," Testimony to the Committee on Homeland Security and Government Affairs Subcommittee on Federal Financial Management, Government Information, and International Security (September 20, 2005)

Health care administrator McClellan believes that the Part D drug benefit is the most important new addition to Medicare in its history, providing million of Americans with better benefits “at a significantly lower cost than originally estimated.” Cato Institute Senior Fellow Jagadeesh Gokhale believes that Medicare’s Part D drug benefit is “bad and shortsighted economic policy.” He believes this program will, among other things, increase private drug prices, impose higher fiscal burdens on future generations, and reduce national saving and investment.

Issue 5. Are Health Savings Accounts the Right Medicine for the Ills of the Health Care Industry?

YES: 45442 Edward L. Langston, from Testimony for the Senate Special Committee on Aging on Health Savings Accounts and the New Medicare Law: The Face of Health Care's Future (May 19, 2004)

NO: 45443 Robert Greenstein, from Testimony for the Senate Special Committee on Aging on Health Savings Accounts and the New Medicare Law: The Face of Health Care's Future (May 19, 2004)

Edward L.Langston, a medical doctor and a trustee of the American Medical Association believes that Health Savings Accounts (HSAs) will create better conditions in the health care industry, including enhancement of the patient-physician relationship and provision of “incentives to utilize heath care in a cost conscious manner.” Robert Greenstein, founder and executive director of the Center for Budget and Policy Priorities, argues that HSAs have several negative consequences. In particular, he asserts these accounts will weaken “the existing comprehensive employer-based health insurance market,” without, at the same time, providing any “significant cost containment.”

Issue 6. Is It Time to Reform Medical Malpractice Litigation?

YES: 34645 U.S. Department of Health and Human Services, from Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs by Fixing Our Medical Liability System (July 24, 2002)

NO: 34646 Jackson Williams, from "Bush's Medical Malpractice Disinformation Campaign: A Rebuttal to the HHS Report of Medical Liability," A Report of Public Citizen’s Congress Watch (January 1, 2003)

The U.S. Department of Health and Human Services (HHS) argues that although the United States has a health care system that “is the envy of the world,” it is a system that is to be brought to its knees by aggressive attorneys who force the medical community to practice costly “defensive medicine.” Jackson Williams, legal council for the watchdog group Public Citizen, charges that the position taken by HHS is factually “incorrect, incomplete, or misleading” and even contradicted by other governmental agencies.

Unit 2 Macroeconomics Issues

Issue 7. Is Wal-Mart Good for the Economy?

YES: 40059 Los Angeles County Economic Development Corporation, from "Wal-Mart Supercenters: What's in Store for Southern California?," http://www.laedc.info/data/documents.asp (January 2004)

NO: 40060 Democratic Staff of the House Committee on Education and the Workforce, from "Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart," http://www.mindfully.org/Industry/2004/wal-mart-labor-record14feb04.htm (February 16, 2004)

The Los Angles County Economic Development Corporation believes that the introduction of Wal-Mart supercenter stores into the Southern California market will generate significant savings for consumers on grocery, apparel, and general merchandise spending, and the redirected spending from the savings will create 35,000 new jobs. The Democratic Staff of the House Committee on Education and the Workforce believes that Wal-Mart, in its efforts to achieve and maintain low prices, has “come to represent the lowest common denomination in the treatment of working people.”

Issue 8. Should Social Security Be Changed to Include Personal Retirement Accounts?

YES: 39914 The White House, from Strengthening Social Security for the 21st Century http://www.whitehouse.gov/infocus/socialsecurity/200501/strengtheningsocialsecurity.html (February 2005)

NO: 39915 Dean Baker, from "Bush's Numbers Racket: Why Social Security Privatization is a Phony Solution to a Phony Problem.," The American Prospect Online Edition (January 14, 2005)

The Bush White House identifies a number of problems with the present structure of the Social Security system and proposes personal retirement accounts as a way of resolving these problems. The White House believes these accounts will also “dramatically reduce the costs of permanently fixing the system.” Dean Baker, co-director of the Center for Economic and Policy Research, argues that President Bush’s plan for personal retirement accounts would not fix Social Security; instead it would “undermine a system that has provided security for tens of million of workers and their families, for seven decades, and which can continue to do so for long into the future if it is just left alone.”

Issue 9. Should the Double Taxation of Corporate Dividends Be Eliminated?

YES: 34647 Norbert J. Michel, Alfredo Goyburu, and Ralph A. Rector, from "The Economic and Fiscal Effects of Ending the Federal Double Taxation of Dividends," A Working Paper of the Heritage Center for Data Analysis (January 27, 2003)

NO: 34648 Joel Friedman and Robert Greenstein, from "Exempting Corporate Dividends from Individual Income Taxes," in A Report of the Center on Budget and Policy Priorities (January 11, 2003)

Free-market economists Norbert J. Michel, Alfredo Goyburu, and Ralph A. Rector applaud the George W. Bush’s administration’s initiative to eliminate the double taxation of corporate dividends. They assert that this action will improve economic efficiency and that, in the long run, this tax cut will pay for itself because it will stimulate economic growth. Economic policy analysts Joel Friedman and Robert Greenstein argue that there are no valid economic justifications for the elimination of the tax on dividends. All that cutting dividend taxes will really do, they say, is reduce the tax burden on high-income individuals.

Issue 10. Are Credit Card Companies Exploiting American Consumers?

YES: 39916 Robert D. Manning, from "Perpetual Debt, Predatory Plastic," Southern Exposure (Summer 2003)

NO: 39917 Michael F. McEneney, from "Written Statement of Michael F. McEneney on Behalf of the Consumer Bankers Association ," Testimony before the House Subcommittee on Financial Institutions and Consumer Credit (September 15, 2004)

Professor Robert D. Manning lists a number of the problems with credit cards, including high interest rates, misrepresentation of the cost of debt consolidation loans, use of double billing cycles, use of “bait and switch” techniques, improper use of personal consumer credit information, and the proliferation of a number of practices that are of little or no benefit to consumers. Lawyer Micheal F. McEneney stresses the benefits that consumers experience because of the “ever expanding choices available to consumers,” and he supports these claims by reporting that a Federal Reserve study found that “91% of credit card holders are satisfied with their credit card issuers.”

Issue 11. Should Minimum Wage and Living Wage Laws Be Eliminated?

YES: 45526 DW MacKenzie, from "Mythology of the Minimum Wage," Ludwig von Mises Institute http://www.mises.org/story/2130 (May 3, 2006)

NO: 45527 Jeannette Wicks-Lim, from "Measuring the Full Impact of Minimum and Living Wage Laws," Dollars & Sense (May/June 2006)

Economics instructor MacKenzie believes that eliminating minimum wage laws would “reduce unemployment and improve the efficiency of markets for low productivity labor.” He also believes that the “economic case for a living wage is unfounded.” Economist Wicks-Lim stresses the ripple-effects of minimum and living wage laws; these effects increase the “effectiveness” of minimum and living wage laws as “antipoverty strategies.”

Issue 12. Do Unskilled Immigrants Hurt the Economy?

YES: 45439 Steven Malanga, from "How Unskilled Immigrants Hurt Our Economy," City Journal (Summer 2006)

NO: 45440 Diana Furchtgott-Roth, from "The Case for Immigration," The New York Sun (September 22, 2006)

Columnist Steven Malanga believes the influx of unskilled immigrants into the U.S. economy has imposed large costs on the larger society, including job loss by native workers and lower investment in labor-saving technology. More importantly, he argues that this immigration has increased utilization of the “vast U.S. welfare and social-services apparatus,” and in this way “has enormously amplified the cost of immigration.” Diana Furchtgott-Roth offers a point-by-point rebuttal. Among her counter-arguments, she observes that annual immigration is “a tiny fraction of our labor force,” and immigrant laborers are “complements, rather than substitutes for native born Americans.” She also cites a National Academy of Sciences study that concluded that foreign-born households are no more likely to use “welfare” than native born households.

Unit 3 The World Around Us

Issue 13. Are Protectionists Policies Bad for America?

YES: 34653 Murray N. Rothbard, from "Protectionism and the Destruction of Prosperity," Ludwig von Mises Institute http://mises.org/fullarticle.asp?title=Protectionism&month=1 (July 13, 1998)

NO: 34654 Patrick J. Buchanan, from "Free Trade Is Not Free," Address to the Chicago Council on Foreign Relations (November 18, 1998)

Free-trade economist Murray N. Rothbard objects to the prospect of protectionism, which he sees as an attempt by the few who make up special interest groups “to repress and loot the rest of us” who make up the many. Social critic and three-time presidential hopeful Patrick J. Buchanan argues that America’s new corporate elite is willing to sacrifice the country’s best interests on “the altar of that golden calf, the global economy.”

Issue 14. Should We Sweat About Sweatshops?

YES: 28786 Richard Appelbaum and Peter Dreier, from "The Campus Anti-Sweatshop Movement," The American Prospect (September/October 1999)

NO: 28788 Nicholas D. Kristof and Sheryl WuDunn, from "Two Cheers for Sweatshops," The New York Times Magazine (September 24, 2000)

Sociologist Richard Appelbaum and political scientist Peter Drier chronicle the rise of student activism on American campuses over the issue of sweatshops abroad. Students demand that firms be held responsible for “sweatshop conditions” and warn that if conditions do not improve, American consumers will not “leave their consciences at home when they shop for clothes.” News correspondents Nicholas D. Kristof and Sheryl WuDunn agree that working conditions in many offshore plant sites “seem brutal from the vantage point of an American sitting in his living room.” But they argue that these work opportunities are far superior to the alternatives that are currently available in many parts of the world and that what is needed are more sweatshops, not fewer sweatshops.

Issue 15. Are the Costs of Global Warming Too High to Ignore?

YES: 34655 Lester R. Brown, from “Eco-Economy: Building an Economy for the Earth," W. W. Norton (2001)

NO: 34656 Lenny Bernstein, from "Climate Change and Ecosystems," A Report of the George C. Marshall Institute (August 2002)

Lester R. Brown, founder and president of the Earth Policy Institute, describes his vision of an environmentally sustainable economy, which includes food supplies, population growth issues, water availability, climatic changes, and renewable energy. Lenny Bernstein, head of L.S. Bernstein & Associates, which advices companies on global environmental issues, acknowledges that ecosystems are sensitive to climate change, but he argues that the change that we have seen repeated again and again over the course of history can lead to benefits for our children and our children’s children.

Issue 16. Are Spending Cuts the Right Way to Balance the Federal Government’s Budget?

YES: 45529 Chris Edwards, from "Statement," Senate Committee on Finance, Subcommittee on Long-Term Growth and Debt Reduction (September 28, 2006)

NO: 45530 Charlie Stenholm, from "Testimony," Senate Committee on Finance, Subcommittee on Long-Term Growth and Debt Reduction (September 28, 2006)

Chris Edwards, Director of Tax Policy Studies at the Cato Institute, believes that the federal government overspending is the cause of its current fiscal problems. Higher taxes are not the solution because they “would result in greater tax avoidance, slower growth, less reported income, and thus less than expected tax revenue, perhaps prompting policymakers to jack up tax rates even higher.” Former Congressman Charlie Stenholm argues that in addressing the deficit and debt problems, everything should be on the table. He stresses that addressing long term fiscal challenges will require “some combination of stronger economic growth, restraining health care costs, scaling back benefit promises of entitlement programs, increasing the eligibility age for Social Security and Medicare, increasing revenues, and other tough choices.”

Issue 17. Has the North American Free Trade Agreement Benefited the Economies of Canada, Mexico, and the U.S.?

YES: 45532 John M. Melle, from "Statement," Senate Subcommittee on International Trade of the Committee on Finance of the United States Senate (September 11, 2006)

NO: 45533 Sandra Polaski, from "The Employment Consequences of NAFTA," Senate Subcommittee on International Trade of the Committee on Finance of the United States Senate (September 11, 2006)

Deputy Assistant U.S. Trade Representative Melle outlines the benefits of NAFTA and concludes that the three NAFTA countries “have not only become better customers for each other but better neighbors, more committed partners, and effective colleagues in a wide range of trade-related international organizations.” Sandra Polaski, director of the Trade, Equity and Development Project argues that NAFTA has produced negative effects in all three countries, including contributing to wage inequality in the U.S. But the largest negative effects have been felt by the rural poor in Mexico: they “have borne the brunt of the adjustment to NAFTA and been forced to adapt without adequate government support.”

Issue 18. Is the No Child left Behind Act Working?

YES: 40061 House Education and the Workforce Committee, from "Fact Sheet: No Child Left Behind is Working," http://edworkforce.house.gov/issues/108th/recess/nclbworks.htm (October 7, 2004)

NO: 39921 Gerald W. Bracey, from "The Perfect Law: No Child Left Behind and the Assault of Public," Dissent (Fall 2004)

The House Education and the Workforce Committee lists a number of positive results for the No Child Left Behind Act, including higher reading and math test scores in several states as well as improved data and information for teachers and parents. Professor Gerald W. Bracey believes that the No Child Left Behind Act is, from the perspective of the Republican party, a perfect law because it will ultimately transfer billions from the public sector to the private sector, because it will reduce the size of government, and because it will “wound or kill” a large Democratic party power base.

Issue 19. Will the Creation of an Ownership Society Make the American Economy More Efficient and More Equitable?

YES: 45445 The White House, from Fact Sheet: America's Ownership Society: Expanding Economic Opportunity http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html (August 2004)

NO: 45446 Paul Glastris, from "Bush's Ownership Society: Why No One's Buying," Washington Monthly (December 2005)

The George W. Bush White House is promoting a plan to increase “ownership” in American society. The plan consists of a series initiatives in health care, in home ownership, in small business, and in Social security. These initiatives, if adopted, will create more ownership, more vitality and give more people “a vital stake in the future of this country.” Paul Glastris argues that persons have rejected the President’s initiatives to give them more choice because they “feel quickly overwhelmed when they lack the information or expertise to decide confidently, and turn downright negative when the choices themselves seem to put what they already have at risk.”