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HIRA: I don't see R. and D. as a silver bullet. We increase R.-and-D. spending 10% or 15%, it's not going to create lots of new jobs. If it does create innovations, it's not clear that the spillover benefits of making those products will be done by U.S. labor.
TIME: Is there a sense of urgency that these issues really have to be dealt with?
HIRA: So many people have been arguing that this is all very good for us, it's really taken away any sense of urgency. We don't have good practical solutions.
MANN: I disagree with you. Labor economists know a lot about how to promote skills evolution in the face of change. We know a lot about re-employment. So there is a sense of understanding among the policy community. There is not that sense of urgency or desire to spend any money in the political community.
BAUMOL: My worry is that there's the wrong sense of urgency, one that will make for pressures for impediments to trade instead of dealing with the problems of the sort that you were discussing.
HIRA: The economics profession seems to be very, very concerned about protectionism. I think that's clouded some of their arguments, understating the problems that are created from globalization. Unless companies start to face competition and problems from this, there's no sense of urgency from their point of view.
SLAUGHTER: Much of the discussion is breathlessly waiting for next month's unemployment report and seeing how many manufacturing jobs there are in Ohio and Florida. That is nowhere near sufficient to grapple with the sort of issues we've talked about. The median person in the U.S. labor force today has a high school diploma and about one year of post-high school education. That person is going to have a job, but how productive and how highly compensated is that job going to be? Maybe we could have tax cuts for less skilled Americans.
MANN: Or an income tax credit.
SLAUGHTER: I would also love to hear more discussion about immigration.
TIME: Immigration is a thorny topic. Businesses may want to hire skilled immigrants, but some people argue that they take jobs away from Americans. Is there a way to connect immigration policy to competitiveness?
SLAUGHTER: One could start with the issue of How many H1-B visas are we going to issue? You want to ameliorate the pressures in the labor market, but you should also try to soften the impact, at least initially, of more workers arriving in the system who will compete with workers in the U.S.
HIRA: I think Professor Slaughter doesn't understand fully how the H1-B is being utilized. Many of the Indian IT firms--their whole business model is about bringing in inexpensive foreign labor so they can underbid their U.S. rivals. This discussion is an important one, but it's all about how a U.S. firm will benefit from globalization. There's no guarantee these firms will actually hire U.S. workers to serve those markets. There's a fundamental shift in the bargaining power between workers and firms.