Globalization and the Politics of Pay: Policy Choices in the American States, by Susan B. Hansen. Washington, D.C.: Georgetown University Press. 2006. Paper: ISBN 978 1 58901 088 8, $24.95. 231 pages.
Within the American Federal system the States are constantly vying for jobs as well as attempting to sway larger business investments away from neighboring states. One of the major factors within this interstate competition is the influence the states themselves have on their cost of labor and competing for the highly mobile capital. Within the global market, there is pressure on governments to lower labor cost in order to stay competitive. This "race to the bottom" however is just a common misconception according to Susan B. Hansen.
Globalization and the Politics of Pay disputes the conventional philosophy that globalization is the prime candidate for the declining wages within the United States. Through a very in depth examination of the many state laws and policies, Hansen demonstrates that it is in fact the states themselves that are causing the affects that are keeping labor cost low. Furthermore, free-market ideologies and low voter turn out, in many states, have had a far greater effect on lowering wages than globalization. Hansen's studies further concluded that states with higher rates of exports and more foreign investment tend to have higher wages than their less democratic counterparts.
The first chapter deals with addressing some of the basic issues that are discussed in an in-depth manner in the later parts of the book, including a look at why wages are so low in the United States. A theoretical foundation is also constructed in order to explain the many frameworks Hansen used to conduct her analysis.
With the following section of the book, Hansen takes a more historical approach. Looking back to the effects of the New Deal and the Taft-Hartley Act of 1947 on the interstate competition...