 Hello and welcome to iNet Live. I am Ramefa Ruhar and the global business columnist and associate editor of the Financial Times. And I am so pleased to be here to moderate and help facilitate this iNet program on the future of work and whether redistribution policies are enough. We're gonna have a really, really rich conversation and I'll start by just introducing our two panelists. Can't think of anybody better to discuss these issues. We have Laura Tyson, who is the distinguished professor of the Graduate School of the Berkeley Haas School. And with her, we have Gordon Hansen, the Peter Wertheim Professor in Urban Policy at the Harvard Kennedy School. And both of you all have thought deeply about the topic of what we can do beyond redistribution to help workers, to help people cope with the world that we're living in now. As many of you know, probably in the viewing audience, this is part of just a long-term multi-month, multi-year actually process of looking at the future of work. And this is only the latest iteration. So you can go online, you can look at the other panels we've had about how we've gotten here, what the future will hold, what the implication is to the future of work for society. But today, we're really gonna focus on what is the policy direction amidst COVID, but also in the post-COVID world and in a world of increased automation. As I said before on these iNet seminars, the virus is almost like a scrim that has been pulled back on things that we knew were going to happen, but are now dramatically speeding up. And it seems pretty clear that redistribution is not gonna be enough. So we're here to talk about what can we do? And we're gonna chat for maybe 40, 45 minutes, but there's a place for you all to, all the viewers to start submitting questions. So please do that. I'm gonna be eyeballing, and we're gonna save at least 15 or 20 minutes at the end, but if you have questions about a particular topic that we're talking about, just plug them in and I'll try and pull them into the conversation. But Laura, let me start with you because you have such a long history, both as an academic but as a policy maker across many, many different regimes, many different governments, in many different positions, thinking about these things. So what should the goal of policy around the future of work be right now? I mean, it's such a big question, but I'm gonna ask it to just dive in. I'm unmuting myself. Hello, everyone. And it's a pleasure to talk about this very important question, set of questions. First of all, I was led to want to discuss the goal of policy because redistribution itself is a policy about, I would say, addressing income and wealth inequality by distributing market returns, taking market returns and redistributing them. And I think the real challenge for policy in the world of automation and the acceleration of digitization of everything, the real challenge is the creation of good jobs because one of the things that has happened and it's happened over the past several decades is we actually have seen this polarization of employment. We have seen a disappearance as a share of total employment of middle-skill, mid-education jobs. And by the way, a good news part of this trend is we've actually also seen a fairly significant growth in the share of employment in higher-skill jobs. So it becomes to me, how do we create more and more of these higher-skill jobs and how do we give people the capabilities through education, through healthcare, through networks, through counseling, through active labor market policies? How do we give people the capabilities to move into these good jobs? So I say the goal is creation of good jobs and the mobility and endowments that individuals have to move into those good jobs. Okay, that's a very nice summary of a lot of complex ideas and we'll come and tease all of those out. Gordon, I'm actually gonna ask you, Laura's kind of provided the perfect pivot here for something I wanna talk to you about, which is the importance of place. I mean, we of course wanna create better jobs. We of course want to make mobility possible because that's a historic advantage of the US actually in terms of growth. But I will say I have had any number in my 30 years of being a journalist, conversations with folks that kind of believe maybe people living in a red state, I grew up in Indiana, that they're just gonna somehow be able to come and move to Wally, North Carolina or Austin or wherever it is and relocate and have that ability to kind of jump into a new world. You are concerned about bringing the labor force to different locations. So can you talk a little bit about that and how you see that tension here? Sure, and if you had asked me that question 20 years ago, I would have had a very different answer because I think a lot of economists were quite sanguine about the ability of workers to adjust to changes in the economic environment. Things go south where you are, just move somewhere else. Things aren't going well in your industry or occupation, change jobs. What kind of appreciate is, as you mentioned, that economics of place is a very powerful force in people's lives. How things are doing where you live matter enormously for your material well-being. There are a sliver of folks who are highly mobile in response to changing economic conditions. They're primarily young and they're primarily highly educated and they're in those occupations that are enjoying very high economic returns. So to set the stage for that, I think we need to think about moving from a world where policies are people-based to have more policies that are place-based. And it's something that we've kind of been coming to appreciate more and more intently over the last decade or so. Where that comes from is the fact that you think about any region, its economic success is gonna be based on what its export industries are. And I mean export in a very expansive sense. It's stuff you produce for other people, could be nearby cities, it could be cities elsewhere in your country, or it could be for global markets. And we've seen a constellation of forces, globalization, the rise of China, the China shock, technological change, and now the progressive decarbonization of the economy, which has led to secular decline and an important set of export industries meaning regions that were specialized in those things are now facing hardship and extended distress. So we need to think about policies that will help those industries pivot to find new drivers of their economic development. And just to throw this out there, something we can talk a lot more detail about, the policies that are gonna help regions do that are gonna vary a lot according to conditions in those particular places. That is so fascinating. Again, you've brought in about 10 different topics. I wanna tease you out on Laura. I'm gonna, as Gordon was speaking, I was thinking about a story I heard recently. I was in the run up to the election doing some reporting in Pennsylvania. And trying to understand why certain union workers and fossil fuels there might be voting for Trump. And someone said to me, look, yes, green tech jobs pay a couple of two, three dollars above the average wage, but traditional fossil fuel jobs are double the median wage or whatever the metric was, it was a lot more. And so you've got that shift. And then at the same time, someone was telling me that this is an international trade issue because the Biden administration is now gonna have to negotiate with the European firms that may wanna come to the US and place jobs that have less benefits, less of a security net in the US. So the US in some ways in clean tech has the potential of becoming the China for Europe. So very, very complicated here. I mean, you're getting into tremendous change, a big potentially productivity, game-changing plan to green the economy, and yet the politics of it. Wow, what do you say to all that? Yes, the politics of this are fundamental. I was listening to Senator Angus King yesterday and he was talking about how Maine itself had bifurcated in terms of the election and had gone for a Republican senator, so Susan Collins, but had gone against Trump. But he said there were very important parts of Maine that were Trump footholds. He talked about production of paper, paper of products. And he basically said there's nothing less and there hasn't been anything for quite some time. So I completely agree this is very interlaced with politics and very interlaced with the kind of notion of being forgotten, being left behind, no one cares. Now, the challenge, and so I think Gordon's absolutely right. As we're thinking about the creation of good jobs, you can think about that as a macroeconomic policy. You have to have the same right amount of aggregate demand. But that doesn't really get up the issue of in certain places the good jobs are declining and other jobs there, other places they may be increasing the people are not in the same places. Okay, so I think this is really hard though. I want to say this is really hard. I think about, I'm gonna go with a country that's tried to do this for a very long time and that is Italy. Okay, when I was a graduate student, the very first thing I worked on was economic development policies trying to bring the southern part of Italy to the level of economic development of the northern part. Today, that's 40 years later, that southern part of Italy per capita income wise is in worse shape relative to the north. So this is a really, really hard problem. And so I want to underscore that we, that thinking about what are the place-based policies that work, I completely agree that is the important. So let's say if I take my goal as creation of good jobs and mobility moving people into them or giving them the endowments they need to have the skills to get into them, that is, I should add, and I will add, how do you do that at a regional level? And I think an important distinction here, and I believe it's been raised in much of the other, the other sessions from the INET, is a distinction between pre-production policies and production policies, because they're really free levels. Redistribution is post-production. It's basically you take the returns that were generated in the market and you redistribute them. Pre-production is people. This is where the focus is on people. The skill, the endowments and networks and links and understanding and information, all the health, the things they need to actually have the skills to get the good jobs. But the production phase of all of this has to do with where are those good jobs going to be. And so there you get things like, you get to things like industrial policy, you get to things like sector-specific, what are you going to do to try to take a sector in decline and try to increase its competitiveness. If you mentioned the issue of alternative energy in the Europeans, you know, a region might reasonably want to encourage, I would say encourage foreign direct investment from European corporations. That has been a major part of the rebuild strength of the US auto industry over the past 30 years. I mean, basically we insisted, we actually insisted through a voluntary export restraint policy that Japan stops selling cars that they export to the United States and start producing cars that they sell in the United States. Just produce it here, okay? So I think there are those kinds of policies. Let me raise an interesting question that I'd love to get Gordon's view on this. Germany, so Germany a few years ago, first time ever introduced a minimum wage, first time ever they introduced a minimum wage because they were really worried about this service sector which was not very well organized unionized. Worker voice was fairly weak in the service sector. These are a small, a small to medium size establishment scattered all over the country. And the wages, the jobs weren't very good. The jobs weren't very good. So what they did is they imposed a minimum wage. One of the really interesting things about this is that some of the minimum wage small firms disappeared because they couldn't pay the minimum wage. They couldn't afford to run at that minimum wage. The workers moved but they didn't move that far. Okay, that's really interesting. They commute more. They commute more. They commute more. Higher wage firms. So I think of the production process, the production policies here include things like minimum wage and that can have different local effects. And I was wondering what Gordon thinks about, should we have different minimum wages for different places? We do, in the United States, to some extent that's what we have. What are some other policies where we could, at the production phase, interfere in a way or interfere makes the wrong word, create policies that actually create good jobs in particular locations. So I guess that's my challenge to Gordon. You're on. Laura, you started off by saying that this is hard and it is hard. We've been confronting these challenges for the better part of half a century and helping regions in distress turn the corner as something that we haven't found a magic bullet for by any stretch of the imagination. So when we think about what's gonna generate job growth, you kind of start by saying, well, what are the sectors that are actually growing in the US economy right now? It's healthcare. It's hospitality industries, broadly defined. It's green tech and it's a lot of stuff related to e-commerce and the digital economy. I'm kind of ignoring the very high tech stuff that you find in Silicon Valley and Boston because when we're talking about distressed regions, it's just, it's not all that relevant. So then you think about, well, what are the anchors that are gonna help you track employers in those industries where growth is happening? A simple way to start is by thinking, do you have the anchors already there? We've got, think of a place like Lehigh, Pennsylvania, which is an apart of Pennsylvania and it's just been hammered by globalization, technological change, the changing energy environment. But you've got major healthcare facilities nearby that are a source of job growth and we can help workers in local areas plug into those jobs, then we're solving part of the problem right there. There are gonna be other places where they don't have an anchor in their community itself, but they might not be that far away from a place. So think of the Central Valley of California and its proximity to Silicon Valley. Thinking much more aggressively about ways of improving commuting linkages from disadvantaged places to advantaged places is another possibility. But then we're gonna have other places that don't have those sorts of existing advantages and this is tougher because you've gotta think about ways of improving the business ecosystem that makes that foreign investment or domestic investment wanna come in. And that's gotta start with at least two things. One is improving the skills of local workers and one of the things that we come to appreciate is how agile community colleges are in redirecting their training programs to meet the needs of local or prospective employers. And the other is a little bit, it's tougher, but it's thinking about providing the logistics, the right infrastructure, the access to finance that allows local business to flourish and here civic institutions and the engagement between business and local government and civil society can be really important in helping make that transition happen in these tough places that don't have kind of natural things going for them. Okay, you guys are getting so many questions on this topic, Laura jump in and then I wanna get, pull in a couple of thoughts in the audience. I only wanna underscore a couple of things that Gordon said because of my work, as I said, I've been working in the state of California as a council of economic advisors and we've been thinking a lot about the differences in regions, the different sectors. I think the sectoral approach obviously critically, we have a lot of the poverty issues in California, a lot of the lack of employment issues in California are in the central valley and that's a very, it got specific sectors and specific geography. But I also wanted to underscore the importance of both training and capital. So I think they're really interesting, again, working on Germany, I was again wowed by their, by their vocational and educational training system. I mean, these guys have it, they have nailed it. They have these systems of training are designed with the employers, with employers association sitting down and saying, okay, in this sector what training do we need? What should be in the vocational part of our education system? How should we test? You don't, they actually test people who go through vocational training to see if they got the skills that were designed in part by the employers sitting together saying what do we actually need? So I think that the human capital association with community colleges trying to continue to strengthen that link between the employers associations, employers and talent development critically important. There's a really interesting national initiative in the United States called Rework America that LinkedIn is helping to and Markle Foundation. They do a lot of good work in this area in Indiana. They're doing some really interesting places in India, work in Indiana, by the way. The other thing I want to emphasize is access to capital because one of the things that turns out to be true in the number of the activities at Gordness talked about where there may be growth is there's a possibility that these will be small relatively small firms. And it's still the case today that it's very hard for a small firm to get access to capital, particularly in a disadvantaged community or disadvantaged, there's nothing. So we really, they're underbanked. The banks have moved out. There's just, we've got to figure out a way to do this. And there's some really interesting things going on now in the community lending area in the United States that I think build out. I think that's one of the things that the Biden administration will do. The access to capital is, we always focus on education and that's right, but it's not enough, not enough. Okay, I want to bring in, because it's so interesting, we're getting all these great questions right on this topic from audience members. Just on the issue of training, then we'll move to capital. Laura, how would you, and then Gordon, I want to hear your thoughts too, square the build back better campaign of the Biden administration with some of these issues of revamping education, coming up with a more Germanic model. And to your point, I mean, there are so many, we all know there are so many existing models at the state level, at the local level, at the company level. But the dots don't always get connected. Some people would argue that's okay. Some would say we do need to have a kind of blanket national system where we start to really move in a more Germanic direction. What would you say about that? I don't think that we're likely to have a national solution here. I think that, and I'm not sure, given that our whole education system from preschool K through 12 high school college is very much designed and supported by local state governments, I think we're going to stick with that. I think the key thing here is actually to find ways to strengthen the links of those educational channels, relations with the employers with, and state and local government can help do that. But actually the link has to be with them. My understanding is that the Biden administration will significantly, wants to significantly increase the training resources that would go through the federal government to the states. The states would allocate them. So the federal government not going to allocate them. The state is going to provide, the federal government provides conditions, conditions on their use, but leaves it to the states. So I think the focus, and again it's nice to have the regional focus here, let's focus on how we can use regional institutions and policies to increase that link between the employers, the students, the workers, and the sectors that matter the most to that region. I think that's, and things that the Biden administration itself will help provide additional resources to support this, but the regions are going to have to figure out how best to use the resources effectively. Yeah, Gordon, do you see any particular, first of all, do you agree with all that? And second, do you see any particular models that you would call out that we should be looking at in terms of connecting the dots regionally around training and educators, job creators? Yeah, I think the one thing of advantage of having a more regional focus is that it doesn't make you as dependent on Washington for solutions to these problems. Right now we have an administration coming in, hopes are high, but we've got to be honest with ourselves, Washington has been stuck in a state of gridlock for some amount of time. And the issues we're talking about are ones that at the state and local level aren't as politicized as they are at the federal level. And this means you can work across party lines more effectively. So that's one advantage of a regional focus. Second advantage of a regional focus is that regions are already spending a lot of money on trying to create jobs through local economic development where the vast majority of that money goes in the form of tax incentives to kind of bribe business to do what business was going to do anyways. Tim Bartek at the Uptown Institute estimates that it costs about $175,000 to create a job via local, via tax incentives. It costs about $15,000 to create a job through funds that help with ground field redevelopment. So part of the challenge here is to think about how we can do what we are doing now better without having to rely on Washington for major infusions of funds. And that goes to then looking at individual communities and understanding what they have that could be the basis for a successful plan. Coming back to the training thing you gotta look at do you have any sort of four year university or community college that you can rely on? What industry was here before? You think about a place like Martinsville, Virginia which in 1990 had almost half of its working age population employed in manufacturing producing furniture and textiles. Import competition from China just wiped that out. The share of their working age population manufacturing was down to under 15%, 15 years later. You got all these factories that are now empty. Can we do something with those factories that allow Martinsville to make that transition to the capital stock that can be redeployed? And I really wanna come back to underscore something that Laura said about the importance of access to capital. When places get hit hard, housing markets get hit and home equity is an important source of capital for investing in new businesses and that generates job growth. So these places that are in distress not only are the labor markets having issues the capital markets are having issues too and we need to think about ways of creating pipelines for access to capital. That can work if we wanna generate a cycle of growth. Let me, I'm gonna take you guys in one minute to cap those we have a ton of questions about that but let me ask you one follow up we had a comment coming in from a union wrap saying you know to your point about what can we do with these factories? How can we use these resources that may be standing idle but could be deployed in a new and creative way? Do we need, and again to go connect with Laura's admiration of the German model do we need co-determination? Do we need some labor on boards? How do you see the opportunities there? So I think having more cooperation between labor and capital and finding solutions to local and regional problems would be great. We don't know that it's gonna work everywhere. It's gonna work in some places where business is committed to saving their particular industries and workers of course are concerned about saving their jobs and not putting the stresses on their family that would be involved with them having to move 100, 200 miles away to find alternative employment. But unions sadly are just a smaller fraction of the workforce. And so whereas unions would be a vital part of revitalization in certain areas in other places that possibility just isn't there. So this kind of speaks to the importance of an ecumenical approach that represents the latent advantages that places have that would provide an anchor for development to occur. Okay, Laura jump in. So I just wanted to jump in on this question because I think it is important to before we go to co-determination which I'm an admirer of but the problem in the United States has been the anti-union effort at the state level at the federal level in the department of labor. We have basically been pushing to reduce and we have succeeded in significantly reducing the share of labor that is unionized. And I think there's a widespread recognition now among economists and I would say both of the right and the left here that has been an important reason for why the share of income from productivity going to labor has gone down. Basically unions have lost their ability they've lost their voice. And so the Biden administration will be very committed to trying to strengthen unions. And I think that is the right thing to do. I think we have to start there. I'm struck by the fact that when the German company I think it was Volkswagen wanted to start a works council in its plant in Tennessee it was forbidden to do so. It has been consistent with state and federal law on representation of worker voice to change that. So I am in favor of trying to strengthen the unions. Co-determination is an interesting idea but basically let's get that union voice thing first. That's all. I know the Google union is interesting not because it's so much a dollars and cents but it's a cultural marker I think. So let's move to capital. We have so much ground to cover already a number of questions. I'm just going to run through them because I think it gives a breadth of what people care about. We have folks asking what is the relationship between money flow and access to capital and inequality? What's the research showing there? Do we need a national rebuilding bank? This notion of all right what is the public sector's role in allocating productive capital at a time when we've got financialization and we've had 40 years of all the things we know about banks doing more trading than lending. The housing market in all of this moving in some ways again to go to the new administration's language moving from work to wealth and the function of the capital markets in the shift that we may be trying to make. That's a huge question but since you guys are brilliant just pick what part interests you and let's start jumping around here. Gordon do you want to start? Sure. And I'm going to take the easier part of it and leave the harder part of it to Laura. And the easier part of it is to think about what do you do in places where the bad stuff has just happened? Where we had a bunch of plant closure where we're seeing a shift out of the particular industry and we kind of just lived through this with COVID, right? But when you think about major economic change that hits a community or a region it is a pandemic like event. And what do we know that worked? Getting money into people's pockets and providing a financial backstop to firms. We should have policies in place that are targeted towards providing that support in response to mass layoff events to widespread job loss at the regional level. Since we're talking about other models I'll throw the Danish model out there based on Flex Security which is the idea that you don't want to impede the mobility of workers between employers and between jobs but you want to make sure that there is a very strong backstop that will take care of them in the event of job loss. So there are rights and responsibilities there rights to that access to support but responsibility in the part of the workers to be very focused on a transition into new employment. And it ends up being not that costly and provides helps dampen some of these cycles. So that's something that we can take we've learned from COVID in terms of the stuff that worked and we can apply it now thinking about these events to prevent further distress from becoming hardwired in. Laura I know you have thoughts on Flex Security. Folks you're muted still. Completely agree with Gordon. I've always been attracted really to the concept of Flex Security and I think that it's being done well in certain countries in Europe. And basically again we need to think about what we're talking about here is the provision of good jobs to people but sometimes those jobs will disappear. And when we then it seems to me we do have to focus on people's connection to other good jobs. So basically it's not that you are we can guarantee through policy that you're connected all your life to the same job in the same employer. It's not possible. So this is really to say what are set of policies that will create enough good jobs and enough mobility and enough income support during that mobility phase from one job to another from one sector to another and sometimes even from one region to another. What are the policies that help people do that? So I think Flex Security is about that concept. So it's flexibility. So you can't we don't want to prevent we don't want to create zombie firms. We won't want to block innovation. We don't want to we don't those processes will lead to quote unquote creative destruction. The destruction part is extremely painful and extremely painful for communities and for workers. What do we do? I would say let's say creative reconstruction. We take the destruction part and we recreate something new in those locations. We help those people. We help those regions do that. I want to say another part of your question from the audience was on how can we leverage? Should we have a, I think the question was should we have a national infrastructure bank or something like that? In California, there is an infrastructure bank and one of the key things that the loan program that I've worked on focused on was how you take public funds that sit in an infrastructure bank or a public bank and how do you leverage those with other capital to provide a lending facility? So I think it's kind of a creation of a new kind of frozen entity in a sense. It's we did it through a SPV entity but they're bringing in more private capital to create new kinds of financial institutions that can lend to small and medium sized businesses. Interesting. Okay. Let's talk a little bit about we've been sort of dancing around COVID and what the impacts have been. I mean, there's so many impacts on work. Just what we're all doing here all the time. One of the things I've been very interested in is seeing the types of businesses that are surviving or being created in the U.S. actually applications to start new businesses are really going through the roof but they are different kinds of businesses. They tend to be more digital. As we know, digital businesses, companies that have a lot of intangibles can have very high margins but sometimes they create fewer jobs. Right. Certainly different kinds of jobs. That's the issue. Do you want me to repeat? Sorry, I think I froze a little bit. Let me repeat the question. In the COVID era, different kinds of businesses are being created. They're more digital. They're more intangible. They may create fewer jobs in the short term although they may be very good jobs and highly productive in the longer term. How do we think about any policy decisions being made around this shift which is happening so fast? Gordon, what do you think? So to look for silver linings in COVID I think remote work creates a possibility for distressed communities that is really exciting. One of the strongest empirical regularities out there in terms of what helps communities grow is to have an anchor of skilled labor. That anchor is hard to create if you don't have it already. Many places though have attractions for millennials or for more seasoned professionals to live and work remotely. Not everyone's going to be able to do this but we've discovered that a much larger fraction of the highly professional segment of the labor force is capable of doing it. So you think about some inducements that help draw in skilled workers to communities. They might be working for employers on the East Coast or the West Coast but they're now based in those places and once you're based in those places you bring your networks with you and those networks then create employment opportunities for people in the local area. They create opportunities for investment. So I think the remote work option is really exciting. I want to think about just one parallel to that which isn't so much COVID as more related to the Biden administration coming in as we think about reforming U.S. immigration policy. Maybe we should take a portion of skilled worker visas and tie those to working in areas where we want to generate job growth. We do this with foreign medical staff. We want to work as a doctor in the U.S. and you were trained abroad. You may have to work for a while in an area that just doesn't have much medical care. We could do that with skilled immigration visas too and in parallel with these new opportunities for remote work bring highly professional folks to areas that don't have access to the same networks that we do on the East and West Coast. Okay, Laura, thoughts on the post COVID world and how to shape policy. So I agree with Gordon completely. We can hope for and there's some signs that the hybrid model of work will continue. That I think there will and more remote work will continue the potential regional benefits that Gordon said. So just to me underscore, I completely agree with that. I think one of the things that I would also focus on is I think that we are going to have continued growth and probably acceleration of independent workers, gig workers, workers who are not tied to a single employer with a standard contract. And the argument in favor of that is all the flexibility and the additional jobs. But the problem is, and this is again, some of the Europeans are dealing with right now, those workers do not have social or legal protections to the same extent that a worker on a regular employment contract does and they don't have access to benefits. So we're gonna have to move, I believe, to a portable benefit system so that individual workers get collecting benefits and contributing to benefits as well. They've got to make contributions to their employers as they move from employer to employer. I think that's really important. We've got to figure out a way. We just had a stimulus package which took unemployment compensation and extended it to the gig workers. Okay, that was the right thing to do. But those workers are not in the social insurance system right now. So we're not finding a way to provide funds that go into the social insurance system. That is the unemployment compensation system. And then our distributed back to workers who are gig workers. So I want to emphasize that we've got to think about that whole other thing that's been accelerated, that independent worker gig worker. That's such a great question and it actually pivots to some of the several audience members to talk about which is monopoly power, particularly amongst big tech firms and the way in which this is affecting the world of work. We've just seen what happened with Uber in California, basically spending a lot of money to make sure that they didn't have to treat the workers as benefited workers. That may happen in other states. I don't even know where to go with this question except how do we make sure, particularly as we transition to the next phase of internet based innovation, the internet of things, smart homes, healthcare, finance. How do you make sure that five companies don't own the entire pie? I don't want to go back to that one. They're going to need another hour long session for this. I mean, they're two sides to it. One is a side that you're emphasizing. They're two sides to it. One is a side you're emphasizing on regulatory policy and in terms of what do we do with antitrust. But a lot of big companies are also big employers and might not just be monopolists in the stuff that they sell, they might be monopsonists in the workers that they hire. And here we need to be very aggressive about things like non-complete clauses about encouraging mobility of workers. Mobility has declined in every dimension in the U.S. labor force, not just between regions, but between employers as well. And we need to be much more aggressive about this. So something that economists have been, 10 years ago we were just kind of dismissed monopsony power as something that's a textbook curiosity. Now we are appreciating how incredibly important it is in the U.S. labor market and what role it's had for suppressing wages for workers in many different sectors. Laura. Yes. And I think I would just add to that. That's again, one of the ways you handle this is the monopsony power means that the employee side has, does not have appropriate negotiating power. And that really goes again to the importance of unions. And that's why I was very pleased. It's not just a cultural sign at Google, the fact that there's recognition. There is attempts to unionize Uber drivers going on right now. Okay, you've got to get an organized voice dealing with these very large firms. You can talk about breaking up the firm's power, but in the meantime, and that may never happen, actually having an organized voice in those negotiations becomes the antidote. And I think that we can see that again. You know, the OECD has done some really interesting work showing that wage inequality, wage stagnation really varies from firm to firm and that the firms, some firms pass through a lot of their profitability, their share to workers and others do not. And one of the features of the firms that do is union power, is worker voice. Is worker voice, is the negotiation of the contract between the workers and the firm, which gets at the issue of how the productivity benefits of say automation are shared with the workers. So. That's a great point. It's a great point. And also, I mean, to your point about Google not just being a cultural marker, it's interesting, it will be interesting I think to see in the post COVID work world, okay, I'm working from home, we're all working from home. That means higher wage jobs can potentially be relocated in ways that physical jobs might have been. And that kind of gets to this bigger question, which again, a lot of people are sending in questions sort of dancing around this topic of status quo globalization. You know, the post neoliberal paradigm, supply chains, tax arbitrage. Someone's asking, you know, how do we get around the fact that labor pays taxes, automation doesn't? These are big questions, but they do really seem important thinking about work and policy. Laura, do you want to grab any one of those? So I wanted to start with two observations. One is that, and Gordon can really speak to this in thinking about what's happened in the labor market, the disappearance of good jobs, the stagnation of wages. Many people blame globalization, probably more than globalization, the weight of globalization as a cause, and they underweight technology as a cause. But maybe the truth is to say, they're totally interconnected at this point. So it's a kind of crazy discussion. I mean, that we have supply chains, we have this very sophisticated way of stuff around the world because we have massive changes in digital technologies and transportation technologies and everything else that make it possible. We wouldn't have had that globalization without the technology. So I just want to get it clear that it's not globalization by itself that's been the issue, but globalization turbocharged by technology. And then the rise, frankly, of a major competitor in many spaces and that is China. So we can talk about China as well. But on the issue and one other issue in your question area, yet it is outrageous that we have these very large global firms that essentially have found a way to generate stateless income. Income, which is not taxed effectively by any state. During the night until about a couple of years ago, frankly, what was happening was the advanced industrial countries were competing to get that income by driving their tax rates on companies down. So there was this basically race to the bottom in terms of corporate taxation and in terms of taxing income that was earned by a corporation headed in your country. But if the income was earned elsewhere or put elsewhere, you didn't get to tax it. I think that is going to change. I really think that is going to change. I think that the OECD again has been doing some really interesting work on this. I think the Europeans are moving in this direction now. I think there's a real possibility that the US begins to negotiate with Europe on this. And that would be the right place to start because a lot of these multinational firms are basically they're the headquartered in Europe or the United States. And a lot of their activities in the US or Europe. It'll be a separate issue how to deal with this in China. I'm not saying but I think it's a really important problem. And I am somewhat optimistic that we will see a change from the race to the bottom to, hey, we've got to figure out a way to propose some taxation on this stateless income. Okay, Gordon, if you want to pick up on this and kind of address broadly how we shift this labor capital balance in terms of preference across all these different areas. I think Laura makes a really important point that we can't deal with this issue of firms escaping taxation without multilateral coordination. There's an article by Bob Davis in the Wall Street Journal today talking about how Robert Lighthizer's advice to the Biden administration is don't trust the World Trade Organization. Just like to counter that just as forcefully as possible and saying now is a moment where we need multilateral coordination more than ever. And if we want to take on big tech and we want to take on the declining labor share of income it's got to be in concert with other countries because going it alone does just put us into the race to the bottom mode. I do want to highlight something about the current moment though that is a sign of optimism. Along with David Otter and David Dorn, I've done lots and lots of research about the impact of the China trade shock on labor markets in the US and elsewhere. The China shock ended 10 years ago. China's completely different place now. Its firms are less dynamic. Its labor force is actually shrinking and the ability of China to keep gobbling up market share is that's over. And what that means is you now have the possibility of thinking about different technological trajectories for some of the industries that China just completely dominated. Not only that, Xi Jinping is doing the rest of the world a real favor by making China as uncompetitive as possible through the nature of intervention of China in major sectors of the economy. So we often make economic policy in a backward looking sense and the importance of China for what's gone on in the global economy in the last 30 years can't be overstated. But we really are in a different moment right now and it gives us freedom to think about possibilities and just we're off the table 20 years ago when China was in that no-go mode. Let me push back just very quickly and say though, I take your point entirely on China although I feel like every time I'm in China I think you can argue the case either way. I mean, I'm fascinated for example that Beijing is taking on the power of ant financial and Alibaba and thinking about breaking up their data monopoly. Laura, very quickly before we move to the last couple of questions do you have thoughts on China and its effect on US labor and the workforce? So a couple, yes, I do. I certainly agree with Gordon that's a simple, not simple but I'll call it simple labor arbitrage threat of China. That is low cost labor in labor intensive or medium labor intensive industries. That was the story of the China shock and it is over because China has lost its own competitive position in those industries. A lot of them are moving to other lower cost labor locations and the supply chain is moving with them. So basically, so I think for the issues for the US and China at this point are much more around high tech industry, industries which have national security implications, industries which have a significant amount of intellectual property rights associated with them. I think those will continue to be a big area of conflict because China is basically determined and we've been determined in our own history. We've had the US has had its own periods of industrial policy. I go back to Alexander Hamilton here but basically China has said we want to have indigenous capabilities in these industries and we will, we will. And so then the question becomes not so much to block them from doing that which I think fails but from trying to make sure through the WTO and through negotiations with China to make sure that US companies and US products have access to that exploding market in China. So I would focus on access to China rather than import threats from China, access to China. And I think that the other thing I want to emphasize here and then I want to raise a question is I think we can work with China and Europe on trade and climate because China, if you go back to the Paris Accord, the Paris Accord came out of the US-China agreement. China has the same issues in climate that we have and actually they have done some really interesting important things in Syria. They're doing a lot of bad things. I mean, they keep generating new coal plants and all the rest of it. But I think this is an area of trade, jobs that we can work with China on and I'm optimistic about that. My question is a little bit to go back to employment in the following sense. Gordon pointed out at the beginning that much of the growth in employment in the future is going to be driven by, I will just call it care, healthcare, care for the elderly, care for the young. Those are local jobs. Those are jobs that are provided by people in the place. And in our system, they are crummy jobs. They're not good jobs. They're not good jobs. I think there's a public policy issue here of how you make those jobs better jobs. Good jobs. Well, I can jump in because one of the last questions to come up here and I think we have time for just kind of one more round from everybody. Someone is asking, is there a gender issue here? How do we make the guys working on the oil rigs move into healthcare and are these feminized jobs being, is that part of the reason that they're crappy jobs? So how do you deal with that? It's certainly kind of gender. Yep, yeah. That's a very important question. How do you... I think they are gender jobs. By the way, we saw in... We saw going after education in the post-19 area where there was a lot of notion that the educators were too unionized and they had too much power. Then people saw the face of those unions, the face of the new rural women. They're basically women who are working in education. And they were able to get some real improvement because it led to political action, political representation and states began to make adjustments. So I think the regions here in the States are gonna have to deal with the reality that this is where a large fraction of the workers are going to work. And I'll link to that one other thing that I think COVID has pointed out so clearly to me. Why did we get that vaccine? We got that vaccine development so rapidly. We got it for two reasons. One was there was a lot of research money that was available. And two, there was a commitment to buy it. There was certain procurement. You were producing something which you knew was going to be bought by the public sector to distribute to everyone. Okay, so think about procurement in the area of if you are employing people to teach in your schools and such a year procuring their services. So I think the power of government to actually create better jobs in all of those things that they procure becomes very important here. And COVID certainly points to procurement. That's a huge deal. And I'm actually hearing good things from the White House on that front, taking that power of the federal government and their procurement spending seriously. Gordon, I'm going to very quickly give you the last minute or two and then we're going to have to wrap up, sadly. Sure, I want to just say one more thing about trade that we jumped off a little too quickly. Because there is no China to replace China, they're just not. That creates this opportunity for the US to rethink its role in certain global supply chains. And here we actually have a legacy of success through NAFTA in things like medical devices and things like aerospace and things like automobiles. And we don't want to forget the North American industrial complex and its potential for continued growth. The USMCA was a step backwards in that regard because it created trade barriers rather than facilitating deepening supply chains among within the region. But I would put that high on the agenda. I know President Biden probably didn't want to talk about trade, but keeping our connection next going to Canada is a way of helping you out to industry. Okay, I know we could keep going and going. You guys are fascinating. I love talking with you. I want to just alert everybody the discussion is going to continue with INET's Young Scholars Initiative in an open forum discussion. You can take a deeper dive on all this. Just click Young Scholars Initiative at the bottom of the screen to join that and just a reminder that on Tuesday, Jan 19th at noon, there's going to be discussion of the future of work and making technologies work for all with, it's going to be moderated by Katya Klanova with the amazing Mariana, Masakato, Tess Postner and Martin Reaves. So you can get all the details on the INET website. I got to go. I got a hard stop at one. Lovely to talk to you guys. Thanks for having me. Bye.