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tsuomela : wages   7

The Stigmatization of the Unemployed « naked capitalism
"I’d argue that the roots lie in a fundamental change in policy that took place around 1980. The lesson that economists drew from the stagflation of the 1970s was that labor had too much bargaining power. The excessive fiscal stimulus of the later 1960s and the oil price shocks of the 1970s had been amplified by the fact that workers had enough clout to demand and get wage increases when they faces sustained price increases. That of course led to more price increases since higher wages led to higher production costs which led business owners to increase prices of their goods and servicer, thus accelerating the inflation already under way.

The solution, per neoclassical economists, was to use unemployment to keep wage demands in check. Thus having a lower level of employment even in good times and taking other measures, like weakening unions, was key to keeping those pesky workers from ever serving to create a reinforcing inflationary dynamic."
economics  unemployment  inflation  the-fed  policy  politics  unions  wages 
march 2011 by tsuomela
The sad but true story of wages in America
Essentially, economic policy has not supported good jobs over the last 30 years or so. Rather, the focus has been on policies that were thought to make consumers better off through lower prices: deregulation of industries, privatization of public services, the weakening of labor standards including the minimum wage, erosion of the social safety net, expanding globalization, and the move toward fewer and weaker unions. These policies have served to erode the bargaining power of most workers, widen wage inequality, and deplete access to good jobs. In the last 10 years even workers with a college degree have failed to see any real wage growth.
economics  money  wages  wealth  work  labor  income  productivity  history  econometrics 
march 2011 by tsuomela
Low-wage East meets high-quality West: New firm-level evidence from France | vox - Research-based policy analysis and commentary from leading economists
"With exports from low-wage countries like China on the rise, the question of what this means for trade and jobs in developed countries is a furious war of words. This column, using firm-level data for France between 1995 and 2005, shows that competition from low-wage markets actually boosts the sales of high-quality goods – but it concedes the benefits are not universal."
econometrics  economics  comparison  international  trade  wages  income 
march 2011 by tsuomela
Firms See Long-Sought Goal in Sight: Major Pay Cuts Through Two Tiers - Working In These Times
These firms are systematically implementing a major strategy to permanently drive down wages far below anything considered "middle class." The key tool for corporations: forcing acceptance of permanent two-tier wage structures and the insertion of nonunion casual workers into union plants to drive down union pay to levels unimaginable a couple years back. Big business is essentially trying to take back the hard-won gains of working people won over generations.
waiting-for-the-revolution  labor  work  unions  wages  corporatism 
november 2010 by tsuomela Scary New Wage Data
The new data hold important lessons for economic growth and tax policy and take on added meaning when examined in light of tax return data back to 1950.

The story the numbers tell is one of a strengthening economic base with income growing fastest at the bottom until, in 1981, we made an abrupt change in tax and economic policy. Since then the base has fared poorly while huge economic gains piled up at the very top, along with much lower tax burdens.
money  wealth  work  jobs  wages  income-distribution  fairness 
november 2010 by tsuomela
interfluidity » The stickiest price
Among the stickiest prices, of course, is the wage rate. In practice, from the mid 1980s right up through 2008, the one thing modern central bankers absolutely positively refused to tolerate was “inflation” of wages. God forbid there be an upcreep in unit labor costs, implying that a shift in the income share away from capital and towards workers. Central banks jack up interest rates right away, because what if the change in relative prices is a mistake? We wouldn’t want that to stick, oh no no no no no. But when the capital’s share of income shifted skyward while deunionization and globalization sapped worker bargaining power? Well, we learned the meaning of an asymmetric policy response.
federal-reserve  banking  interest-rates  wages  monetary-policy  jobs  inflation 
july 2010 by tsuomela
Stumbling and Mumbling: Economists, stories & mechanisms
First, I fear Anthony has too much confidence in economists’ ability to build useful scenarios. The problem is that extreme events are often not captured by scenarios. For example, back in 2007 loads of economists had a disaster scenario. But these revolved around an unwinding of consumer debt, or a meltdown of hedge funds, or a dollar collapse triggered by global imbalances. Very few indeed had a remotely accurate credit crunch scenario.
economics  prediction  finance  rationality  sociology  decision-making  scenario-planning  story-telling  wages  minimum-wage 
september 2009 by tsuomela

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