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The visible hand

By November 6, 2015February 18th, 2021No Comments

The weak wage growth since 1979 for all but those with the highest wages is the result of intentional policy decisions—including globalization, deregulation, weaker unions, and lower labor standards such as a weaker minimum wage—that have undercut job quality for low- and middle-wage workers. These policies have all been portrayed to the public as giving American consumers goods and services at lower prices. Whatever the impact on prices, these policies have lowered the earning power of low- and middle-wage workers such that their real wages severely lag productivity growth. Macroeconomic policies have often added to the forces disempowering the vast majority of workers by tolerating (or causing) unnecessarily high unemployment rates to forestall (often hypothetical) increases in inflation or interest rates.

To generate wage growth, we need to rapidly lower unemployment, which in the current moment can only be reliably accomplished through expansionary fiscal policy—particularly large-scale ongoing public investments and the reestablishment of state and local public services that were cut in the Great Recession and its aftermath. The priority has to be jobs now, rather than any deficit reduction (which under current conditions will sap demand for goods and services and slow job growth).

On top of lowering unemployment, policy should also aim to restore the bargaining power of low- and middle-wage workers. This means aggressively increasing the minimum wage so that it eventually grows to half the average worker’s wage. It means reestablishing the right to collective bargaining for higher wages and addressing workplace concerns. It means not allowing immigration policy to be dictated by employers’ desire to bring in guestworkers lacking basic labor market protections in order to undercut wages in both high-wage and low-wage occupations. Instead, guestworkers should have full rights to the same labor market protections as resident workers, and such programs should be allowed only to relieve rigorously documented episodes of genuine labor shortages. It means establishing citizenship for undocumented workers who are currently vulnerable to exploitation. It means taking executive action to ensure that federal dollars are not spent employing people in jobs with poverty-level wages. Overall, it means paying attention to job quality and wage growth as the key priorities in economic policymaking and as mechanisms for economic growth and economic security for the vast majority.

From ‘A Decade of Flat Wages’

A Decade of Flat Wages: The Key Barrier to Shared Prosperity and a Rising Middle Class

Patria says:-

You read it here first – http://www.patria-uk.org/manifesto/ – in 2012, a good eight months before the Economic Policy Institute’s briefing paper, ‘A Decade of Flat Wages’, was published in August 2013.

There are, of course, differences between the American and British economies, but there are also similarities with respect to the problems faced by each.

Raising real wages is necessary, as is increasing productivity and per capita GDP. But increasing the statutory minimum wage is not the way to raise real wages in the long term, because you can’t buck the market.

Instead of granting citizenship – and the vote – to illegal immigrants who probably number at least three million in the UK, as compared to thirteen million in the US, and forcing employers to hire them in preference to Englishmen and people of British ancestry, government should deport the lot and put a stop to immigration from Africa, Asia and Latin America.

A reduction, or at least no further increase, in the supply of labour would stimulate productivity growth through investment in new technology and thereby increase both real wages and national income.

The EU has rules against member states investing in their own industries, which is one of the many reasons Britain should vote to leave.

Patria is the one and only party to stand against the political and media Establishment’s jihad against the English.

Vote No to EUrabia at the forthcoming referendum.

Patria, the Home of Patriots, neither left nor right but patriotic.

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