Out with Austerity Economics, In With a ‘Moral Economy’

A blog post from Stephen Herzenberg, originally published on Third and State.

We released our annual State of Working Pennsylvania at the Keystone Research Center today.

Bottom line: the report shows that the economy is limping along and our job market is broken. State and federal policies driven by austerity economics are increasing joblessness, sparking greater economic inequality and undercutting American values.

With working families still struggling in this weak economy, we make the case for an alternative approach that focuses directly on job creation and building a stronger economy. We’re calling this new direction a “moral economy” – one that is more competitive economically and supports American values.

Creating a “moral economy” isn’t that hard. It means establishing conditions in which our most dynamic companies can thrive and multiply and enforcing some basic rules (e.g., labor and environmental standards) so that companies can’t compete in ways that harm workers and communities. “Paving the high road and blocking the low road” is the key to unleashing American ingenuity on a larger scale, creating a stronger economy and a more robust middle class.

Some of the immediate steps we need to take to strengthen our economy include:

  • Continuing extended federal unemployment benefits through 2012 as families continue to struggle in this weak economy;
  • Providing more federal aid to state and local governments to prevent public-sector layoffs from undercutting a rebound in private employment;
  • Investing in infrastructure and school construction at a time when costs are low and we can get more bang for the buck; and
  • Modernizing our unemployment system to help out-of-work people strengthen their skills and better contribute to the economy.

We’ll have more to say about the State of Working Pennsylvania report next week. In the meantime, take it with you this weekend for a little Labor Day reading.