1/6
I disagree, Martin. For the past several decades businesses have been very clear: they cannot raise wages in line with productivity because of foreign competition, mainly from countries with low wages relative to productivity, and if they have to pay higher wages, they...
I disagree, Martin. For the past several decades businesses have been very clear: they cannot raise wages in line with productivity because of foreign competition, mainly from countries with low wages relative to productivity, and if they have to pay higher wages, they...
https://twitter.com/MESandbu/status/1406901060875264003
2/6
will be forced to move production offshore. It has also been clear that the countries that have benefitted most from global trade have been those whose wages are lowest relative to productivity.
will be forced to move production offshore. It has also been clear that the countries that have benefitted most from global trade have been those whose wages are lowest relative to productivity.
3/6
Germany is a particularly good example of this because in the 2-3 years that they "reformed" wages downwards, they went from trade deficits and weak domestic demand to massive trade surpluses and very strong foreign demand, which in turn ultimately put huge downward...
Germany is a particularly good example of this because in the 2-3 years that they "reformed" wages downwards, they went from trade deficits and weak domestic demand to massive trade surpluses and very strong foreign demand, which in turn ultimately put huge downward...
4/6
wage pressure (mainly through soaring unemployment) on their European partners who took the other side of their imbalances.
wage pressure (mainly through soaring unemployment) on their European partners who took the other side of their imbalances.
5/6
More generally I don't think it coincidence that US and European wages for the bottom half began to stagnate in the 1980s, at just the time that capital flows were liberalized and persistent trade imbalances soared to levels that had previously been considered impossible.
More generally I don't think it coincidence that US and European wages for the bottom half began to stagnate in the 1980s, at just the time that capital flows were liberalized and persistent trade imbalances soared to levels that had previously been considered impossible.
6/6
When Bill Clinton argued in 1993 when he signed the NAFTA bill that "Nothing we do in this great capital can change the fact that factories or information can flash across the world; that people can move money around in the blink of an eye," this is what he meant.
When Bill Clinton argued in 1993 when he signed the NAFTA bill that "Nothing we do in this great capital can change the fact that factories or information can flash across the world; that people can move money around in the blink of an eye," this is what he meant.
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