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1/5
It’s great that the idea of raising minimum wages is become increasingly acceptable. Higher wages, in a world of weak demand, stagnant investment and underutilized resources, will boost business investment by boosting consumer demand, and this... https://www.ft.com/content/79156fd0-6325-41d8-b6e6-576e6f25f869
It’s great that the idea of raising minimum wages is become increasingly acceptable. Higher wages, in a world of weak demand, stagnant investment and underutilized resources, will boost business investment by boosting consumer demand, and this... https://www.ft.com/content/79156fd0-6325-41d8-b6e6-576e6f25f869
2/5
increase in business investment will raise total production by enough to satisfy both higher consumption and higher investment. It is high wages, after all, that encourage businesses to boost profits by investing in productivity-enhancing technology.
increase in business investment will raise total production by enough to satisfy both higher consumption and higher investment. It is high wages, after all, that encourage businesses to boost profits by investing in productivity-enhancing technology.
3/6
Unless of course they can boost profits by moving production offshore. We shouldn’t forget that what has helped drive wages down across the globe, relative to productivity, has been the need for countries to compete internationally in a world in which the frictional costs...
Unless of course they can boost profits by moving production offshore. We shouldn’t forget that what has helped drive wages down across the globe, relative to productivity, has been the need for countries to compete internationally in a world in which the frictional costs...
4/6
of trade and capital flows have been driven to zero. In such a world it is cheaper to move production to a location in which wages are low relative to productivity than it is to raise productivity at home. If countries try to raise minimum wages, in other words, but don’t...
of trade and capital flows have been driven to zero. In such a world it is cheaper to move production to a location in which wages are low relative to productivity than it is to raise productivity at home. If countries try to raise minimum wages, in other words, but don’t...
5/7
also raise the frictional costs associated with “hyper-globalization”, then much of the benefit will flow abroad to countries that don’t raise wages, in which case we will “discover” that raising minimum wages leads to higher unemployment, and not necessarily to more growth.
also raise the frictional costs associated with “hyper-globalization”, then much of the benefit will flow abroad to countries that don’t raise wages, in which case we will “discover” that raising minimum wages leads to higher unemployment, and not necessarily to more growth.
6/7
We can’t forget why we allowed wages to stagnate for so many years in the first place: countries needed labor costs to be internationally competitive. “If we want more globalization”, as Dani Rodrik has pointed out, “we must either give up some democracy or some national...
We can’t forget why we allowed wages to stagnate for so many years in the first place: countries needed labor costs to be internationally competitive. “If we want more globalization”, as Dani Rodrik has pointed out, “we must either give up some democracy or some national...
7/7
sovereignty.” Conversely if we want to retain our democracy and regain national sovereignty, we must give up some globalization, which is just another way of saying we must reverse some of the processes that sharply reduced frictional costs in trade and capital flows.
sovereignty.” Conversely if we want to retain our democracy and regain national sovereignty, we must give up some globalization, which is just another way of saying we must reverse some of the processes that sharply reduced frictional costs in trade and capital flows.
