Amid all the recent talk about reforming the global financial system to increase its “stability,” there’s been little said about extending the idea of economic security to workers.

The Organization for Economic Cooperation and Development research group came close earlier this month. The OECD’s Financial Markets Committee—made up of officials from central banks, finance ministries and other financial authorities—issued a statement  in response to the subprime mortgage crisis and related financial turbulence of late. It called for “fundamental reform of financial markets” that “enhances stability, whilst retaining efficiency.” And, in a move rare among financial officials and bankers, the OECD acknowledged the way the global economy is becoming more chancy for individuals.

“The OECD also notes that the world is moving to a situation in which individuals bear more and more risks, without being necessarily able to cope with them,” the organization said April 15. “This concerns not only credit, including sub-prime mortgages, but also insurance or pensions.”

A big portion of the world’s individuals are workers and employees. And they also face the risk of sudden job loss, as seen by the thousands of layoffs in recent months in the United States. Unfortunately, the OECD Financial Markets Committee has a tepid solution to people’s economic precariousness: “This situation calls for a new culture of risk awareness and financial education mechanisms that the OECD promotes.”

More recently this month, the OECD proposed a more concrete measure to help with unemployment—giving local agencies and authorities more power and autonomy to adjust employment and training programs to meet local needs.

But such flexibility, while helpful, still isn’t likely to provide a strong enough fix to the problem at hand. That is, to give workers a meaningful measure of economic security while preserving a degree of freedom for businesses. Decent unemployment benefits, smart training programs, health insurance and sound retirement income—along with job opportunities—are the keys to economic security. But in many countries, one or more of these ingredients is missing.

The irony is that economic security for workers can coincide with strong economic growth. Denmark, with its “flexicurity” system, is a case in point.

As the financial crisis and credit crunch of 2007 and 2008 suggest, we have allowed for too much risk-taking on the part of some of our financial institutions. At the same time that we seek to establish a less dicey financial system, we ought to broaden this push for economic security. Including workers in the trenches can help us get to an economy that is both more stable and more prosperous.

An advocacy group for U.S. software programmers proposes an intriguing fix for a possible flood of H-1B visa applications.

The Programmers Guild is calling for guest worker visas to be given to companies pledging to pay the highest salary, with salary serving as a proxy for skill level.

“H-1B workers with the highest skills should be given priority,” the guild said in a statement last week. “In no case should a ‘Ph.D. genetic researcher’ lose out to a ‘$16/hour accountant.’ ”

Currently, the government uses a lottery system to decide which petitions will be approved for H-1Bs in the event of high demand for the visas, which allow skilled foreigners to work in the United States. There is an annual limit of 65,000 for most H-1B workers.

The first 20,000 H-1B workers who have a U.S. master’s degree or higher are exempt from the cap. April 1 is the first day employers may file petitions seeking H-1B workers for fiscal year 2009, which begins October 1.

For the last fiscal year, the H-1B cap was reached on April 2—the first day employers could submit petitions.

The guild’s proposal is part of a broader H-1B visa debate, in which some have called for raising the program’s annual cap.

Under the guild plan, the top salaries promised would get the H-1B visas subject to the cap of 65,000.

“Any business with a critical need for an H-1B candidate could be assured of approval by paying a higher wage,” guild president Kim Berry said in a statement. “Since the median H-1B salary is about $55,000, any H-1B paying more than about $65,000 would be approved.”

Making a high wage a factor for getting a visa potentially raises costs for employers. Small businesses in lower-wage markets in particular might be squeezed by such a change.

But the proposal could help make sure the sharpest workers come in under the H-1B program, which is used heavily by the technology industry. It also could help prevent the underpayment of H-1Bs, which undercuts the salaries of U.S. workers and makes it less likely that American workers will enter fields that now rely on foreigners.

A guild report from 2006 concluded the H-1B prevailing wage is substantially below the median wage of U.S. workers.

H-1B wage problems also surfaced in a 2006 study by the U.S. Government Accountability Office. It found that 3,229 H-1B applications were certified by the U.S. Labor Department, “even though the wage rate on the application was lower than the prevailing wage for that occupation.”

The guild’s alternative to the H-1B lottery includes a second provision that raises tricky questions of national interest and global economics. The guild would give U.S. employers preference over foreign consulting firms. Critics, including the guild, have argued that use of the visas by foreign firms fuels the shift of work abroad.

At least when it comes to the salary piece, the guild’s alternative to the H-1B lottery is on the money, it seems to me. What do you think?

Friday’s employment report from the U.S. Department of Labor is a great reminder of how statistics can mislead—and another sign of brewing trouble for the global economy.

The U.S. economy lost 63,000 nonfarm payroll jobs in February, the largest monthly decline since March 2003. But the official unemployment rate actually fell slightly, from 4.9 percent to 4.8 percent. So is the job situation improving or worsening? And why the seemingly contradictory numbers?

The two sets of statistics come from different government surveys. But it’s not as if the payroll employment figure—which comes from a survey of business and government establishments—is somehow missing a big jump in employment captured in the unemployment rate, which comes from a survey of households. The household survey found a decrease of 255,000 employed individuals from January to February. But the unemployment rate edged down because the civilian labor force shrank by 450,000.

The civilian labor force is defined as the sum of employed and unemployed people. Sounds simple enough. But the “unemployed” category is a bit tricky: People only get counted as such if they had no employment during the reference week of the survey, they were available for work at that time and “they made specific efforts to find employment sometime during the four-week period ending with the reference week,” as the Labor Department puts it.

That means the unemployed tally excludes “discouraged workers.” They are defined as people who wanted and were available for work and had looked for a job sometime in the prior 12 months, but who hadn’t done so in the previous four weeks because they believed no jobs were available for them. There were 396,000 discouraged workers in February.

New York Times columnist David Leonhardt has an interesting column this week  saying that the employment rate of Americans in their prime years, 25 to 54 years old, has been falling, even as the unemployment rate has been declining. That means one of two things, he says: Either a growing number of people have been choosing not to work purely by their own volition, or there’s been a rise in the number of folks who aren’t working and aren’t actively looking but would like to find a good job. The latter, he says, appears to be the better explanation.

“[T]hese nonemployed workers tend to be those who have been left behind by the economic changes of the last generation,” Leonhardt writes. “Their jobs have been replaced by technology or have gone overseas, and they can no longer find work that pays as well.”

The latest U.S. employment figures not only point to a decline in consumer spending power, which bodes poorly for both the American and world economies. They also suggest Americans’ support for global trade may weaken further. Although Washington officials passed a stimulus package aimed at boosting the U.S. economy, the measure fell short of seriously strengthening the economic safety net into which many U.S. workers are falling.

Will American workers, at some point, decide that the global economy as it is set up just doesn’t work for them?

As U.S. political leaders hash out how to rev up the economy, they would do well to strengthen the country’s economic safety net at the same time.

Amid housing and financial sector woes and reduced job growth, it’s clear the economy is facing a slowdown if not a downturn.

President Bush last week called for a stimulus package that includes tax incentives for American businesses to invest in their firms this year as well as tax relief for consumers.

“Letting Americans keep more of their own money should increase consumer spending, and lift our economy at a time when people otherwise might spend less,” Bush said in a speech.

That sounds great on the surface. But an across-the-board tax break may not be as effective in sparking spending as help given specifically to low-income or middle-income people, and to people out of work. According to a New York Times report last week, economist Mark Zandi has estimated that increases in unemployment benefits produced about $1.73 in additional demand for every dollar spent, while tax rebates to all citizens generated about $1.19 for every dollar spent. Reductions in tax rates produced just 59 cents per dollar.

Better unemployment benefits dovetail with calls from some leading economists for a stronger safety net. A sturdier net with improved unemployment benefits and training options not only has moral implications but economic growth potential. That can come in the form of both higher-skilled workers and a greater public appetite for global trade, if economic dislocations aren’t devastating.

According to a report last year from the Pew Research Center, just 59 percent of Americans have positive views of trade. That was the lowest figure of 47 countries highlighted in the study on economic globalization. What’s more, the report found that Americans are less supportive of international trade and multinational companies than they were five years ago.

Global trade, despite its downsides, is a powerful engine for generating prosperity. So is a better-trained workforce.

A stronger safety net, therefore, may be more than just a key to short-term economic growth. It could underpin long-term success as well.

South Korea’s newly elected president has a populist streak, but is it a smart one?

Businessman-turned politician Lee Myung-bak sees a role for the government in economic affairs, even though he largely trusts in the market and global trade to reverse the country’s slowing economic growth.

Lee, for example, has called for building a major Korean waterway and promotes the creation of an “International Science and Business City” in Chungcheong province.

What’s more, Lee seems to take the idea of a social safety net seriously. His official Web site calls for a society that is “warm” and touts the idea of a “smart market economy,” meaning that “Competition, freedom and creativity should be protected but stragglers helped.”

The word “stragglers” may be more pejorative than Lee intends because of translation issues. But it does seem like he views those who struggle economically to be charity cases. For example, the site also states: “…Korean people call for new political leadership, which should be based on faith in success, respect of freedom and competition, and a forward-looking managerial capacity. It also should be able to help and guide the needy, the weak, and the handicapped.”

Losers in the global economy, however, aren’t always “weak.” The turbulent nature of today’s capitalism can topple otherwise competent companies and individuals quickly, and there’s little to anything they can do about it. Some countries, such as Denmark, are exploring policies that effectively take the stigma out of job loss and treat the social safety net—which can include retraining and wage insurance—as a force to keep an economy strong.

Will Lee’s “warm” version of welfare fall short of being the wisest variety?