Suchergebnisse

ABSTRACTThis contribution to the Forum Debate on global development focuses on the dimension of functional income distribution between labour and capital and its demand‐side and supply‐side effects. The article summarizes recent literature that has sought to explain the reasons behind the global fall in the labour share. It then discusses the demand‐side effects of the declining wage share on growth, based on the post‐Keynesian/post‐Kaleckian literature. The author presents an alternative policy scenario for the G20 based on a mix of increasing wage share and public investment, before discussing the supply‐side effects of rising inequality. The article concludes with some policy implications for equality‐led development.

Since the 1980s there has been a clear reversal of the trends towards relatively egalitarian income distribution achieved during the post-war era, with a global race to the bottom in the share of wages in national income in the UK and elsewhere. This decline in the wage share was associated with a weaker and volatile growth performance. In the UK, similar to the US or the periphery of Europe, households increased their debt to maintain consumption levels in the absence of decent wage increases. The crisis of 2007-9, and the subsequent Great Recession has proven the fragility of this model. The recovery in Britain is built once again on the shaky ground of household debt instead of wage growth. Empirical evidence shows that in the vast majority of countries a fall in the wage share leads to lower growth; this is what we call a wage-led growth economy. The UK is a typical example of a wage-led economy. In a wage-led country like the UK, or the EU as a whole, more egalitarian policies are consistent with growth. A wage-led recovery out of the financial crisis is feasible, but will need political will to achieve. Globalisation is not an impediment to a wage-led development strategy. The UK and the EU as a whole would be the economies that would benefit most from a coordinated boost to the wage share at the global level. As such, the UK and Europe could, and should, take a step forward in terms of radically reversing the fall in the wage share. This would then create space for egalitarian growth strategies at a global level. The fall in the wage share has been a deliberate outcome of policies that led to the fall in the bargaining power of labour, welfare state retrenchment, and financialisation. The solution therefore lies in reversing this process. Policies should be in place to ensure that nominal wages increase in line with inflation and productivity. This should follow an initial gradual correction of the loss in the wage share in the past three decades. A strategy of wage-led development requires a policy mix that includes labour market policies aiming at pre-distribution, as well as redistributive policies through progressive taxes. Furthermore, distribution policies need to be complemented by a macroeconomic and industrial policy mix. Wage policies have to be embedded into broader targets of equality, full employment, and ecological sustainability.

This paper presents the empirical evidence about the impact of the simultaneous race to the bottom in labour's share on growth after taking global interactions into account based on the Post-Kaleckian theoretical framework developed by Bhaduri and Marglin (1990). The world economy and large economic areas are likely to be wage-led; and parameter shifts in different periods are unlikely to make a difference in this finding. The effects that can come from a wage-led recovery on growth and hence employment are positive, however they are also modest in magnitude. We then present an alternative scenario based on a policy mix of wage increases and public investment. A coordinated mix of polices in the G20 targeted to increase the share of wages in GDP by 1%-5% in the next 5 years and to raise public investment in social and physical infrastructure by 1% of GDP in each country can create up to 5.84% more growth in G20 countries. The final section addresses the political aspects and barriers to a wage-led recovery.

The aim of this paper is to outline the cornerstones of a macroeconomic model to analyse the various channels through which gender equality can influence growth and employment outcomes. The paper first introduces the basic Post-Keynesian/neo-Kaleckian demand-led growth model, and contrasts this with the mainstream neoclassical growth model. Then we present the main features of an extended model that incorporates gender relevant categories in the behavioural functions that determine private aggregate demand (consumption, investment), and the role of the government in a model with endogenous changes in productivity and employment. The paper concludes by a discussion of the policy implications.

This paper analyses the developments in wages, employment and income distribution in the Central and Eastern European new member states twenty years after transition to capitalism, divided into three periods: 1) the transition crisis; 2) post-transition growth; and 3) the crisis episode of 2008-9. Total employment has at best stagnated or slightly decreased. Modest wage increases have fallen behind productivity increases. Furthermore, the global crisis has led to employment losses in all countries, and real wages have already started to decrease in several countries.