Maurice FitzGerald Scott
- Published in print:
- 1991
- Published Online:
- November 2003
- ISBN:
- 9780198287421
- eISBN:
- 9780191596872
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198287429.003.0013
- Subject:
- Economics and Finance, Development, Growth, and Environmental
In a study of fifty US manufacturing industries over some 40 years, Fabricant found that labour productivity grew faster where output grew faster, and wage costs per unit of output grew more slowly, ...
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In a study of fifty US manufacturing industries over some 40 years, Fabricant found that labour productivity grew faster where output grew faster, and wage costs per unit of output grew more slowly, as did the price of output. Subsequently, similar relationships have been found in other countries and periods, two important studies being by Salter and Kennedy, each offering explanations. A different explanation is offered here, which suggests a surprising conclusion: that labour productivity tends to grow at the same rate in all industries in a given country over a long period.Less
In a study of fifty US manufacturing industries over some 40 years, Fabricant found that labour productivity grew faster where output grew faster, and wage costs per unit of output grew more slowly, as did the price of output. Subsequently, similar relationships have been found in other countries and periods, two important studies being by Salter and Kennedy, each offering explanations. A different explanation is offered here, which suggests a surprising conclusion: that labour productivity tends to grow at the same rate in all industries in a given country over a long period.
Hanaa Kheir-El-Din
- Published in print:
- 2009
- Published Online:
- September 2011
- ISBN:
- 9789774163036
- eISBN:
- 9781617970344
- Item type:
- chapter
- Publisher:
- American University in Cairo Press
- DOI:
- 10.5743/cairo/9789774163036.003.0007
- Subject:
- Political Science, Political Economy
The consensus in the empirical literature is that higher wage growth does not cause higher inflation. Theory of the inflation process is caused by excess aggregate demand. It argues that expansionary ...
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The consensus in the empirical literature is that higher wage growth does not cause higher inflation. Theory of the inflation process is caused by excess aggregate demand. It argues that expansionary monetary policy increases aggregate demand, putting upward pressure on prices. The econometric literature has typically studied whether wage growth Granger-causes inflation. Most studies have not found any strong indications that this is the case (Hess and Schweitzer 2000). According to the Phillips curve, high employment levels are accompanied by high inflation. Any increase in costs like that by growing wages will be fully translated into increases in prices but will not be accompanied by higher output levels.Less
The consensus in the empirical literature is that higher wage growth does not cause higher inflation. Theory of the inflation process is caused by excess aggregate demand. It argues that expansionary monetary policy increases aggregate demand, putting upward pressure on prices. The econometric literature has typically studied whether wage growth Granger-causes inflation. Most studies have not found any strong indications that this is the case (Hess and Schweitzer 2000). According to the Phillips curve, high employment levels are accompanied by high inflation. Any increase in costs like that by growing wages will be fully translated into increases in prices but will not be accompanied by higher output levels.
Hanaa Kheir-El-Din (ed.)
- Published in print:
- 2009
- Published Online:
- September 2011
- ISBN:
- 9789774163036
- eISBN:
- 9781617970344
- Item type:
- book
- Publisher:
- American University in Cairo Press
- DOI:
- 10.5743/cairo/9789774163036.001.0001
- Subject:
- Political Science, Political Economy
Since 2004, economic reforms in Egypt have led to robust expansion, a healthy external position, and enhanced investor confidence. But despite these positive macroeconomic developments, inflation has ...
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Since 2004, economic reforms in Egypt have led to robust expansion, a healthy external position, and enhanced investor confidence. But despite these positive macroeconomic developments, inflation has been steadily rising. Does fiscal policy threaten price stability? Does wage growth in the Egyptian economy lead price inflation, or is it the reverse? In this volume, these and other questions are examined by contributors who participated in a conference held in Cairo in late 2007. Here is an analysis of the factors driving prices in Egypt, in an attempt to find a satisfactory balance between prices and economic growth. While Egypt is the focus of the analysis, the papers draw upon the relevant literature and international experience, and the findings can be applied to other middle-income economies. The study helps to explain the complex issues facing economists and policymakers, with proposals for reform.Less
Since 2004, economic reforms in Egypt have led to robust expansion, a healthy external position, and enhanced investor confidence. But despite these positive macroeconomic developments, inflation has been steadily rising. Does fiscal policy threaten price stability? Does wage growth in the Egyptian economy lead price inflation, or is it the reverse? In this volume, these and other questions are examined by contributors who participated in a conference held in Cairo in late 2007. Here is an analysis of the factors driving prices in Egypt, in an attempt to find a satisfactory balance between prices and economic growth. While Egypt is the focus of the analysis, the papers draw upon the relevant literature and international experience, and the findings can be applied to other middle-income economies. The study helps to explain the complex issues facing economists and policymakers, with proposals for reform.
Alison Johnston
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9781501702655
- eISBN:
- 9781501703775
- Item type:
- chapter
- Publisher:
- Cornell University Press
- DOI:
- 10.7591/cornell/9781501702655.003.0003
- Subject:
- Political Science, Political Economy
This chapter presents empirical evidence for the two institutional linkages: that the European Economic and Monetary Union (EMU) led to a bifurcation in sectoral wage developments within its member ...
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This chapter presents empirical evidence for the two institutional linkages: that the European Economic and Monetary Union (EMU) led to a bifurcation in sectoral wage developments within its member states and that, despite this bifurcation, employers in northern EMU economies utilized corporatist bargaining arrangements to persistently undercut the trade performance of their southern EMU neighbors after 1999. Using a panel analysis of seventeen OECD countries from 1980 to 2007, the chapter tests the correlation between inflation-averse central banks at the national level and the Maastricht conditionality, on the one hand, and sectoral wage inflation and wage growth, on the other. It also examines the link between sheltered sector wage suppression and export success and shows that export-favoring wage governance institutions helped maintain competitiveness for countries that possessed them; the effect of these institutions on export growth was particularly magnified under monetary union.Less
This chapter presents empirical evidence for the two institutional linkages: that the European Economic and Monetary Union (EMU) led to a bifurcation in sectoral wage developments within its member states and that, despite this bifurcation, employers in northern EMU economies utilized corporatist bargaining arrangements to persistently undercut the trade performance of their southern EMU neighbors after 1999. Using a panel analysis of seventeen OECD countries from 1980 to 2007, the chapter tests the correlation between inflation-averse central banks at the national level and the Maastricht conditionality, on the one hand, and sectoral wage inflation and wage growth, on the other. It also examines the link between sheltered sector wage suppression and export success and shows that export-favoring wage governance institutions helped maintain competitiveness for countries that possessed them; the effect of these institutions on export growth was particularly magnified under monetary union.
Alison Johnston
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9781501702655
- eISBN:
- 9781501703775
- Item type:
- chapter
- Publisher:
- Cornell University Press
- DOI:
- 10.7591/cornell/9781501702655.003.0001
- Subject:
- Political Science, Political Economy
This book explores how the European Economic and Monetary Union (EMU) succumbed to the serious economic crisis it is currently in, arguing that the crisis is related to the recent rise in the ...
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This book explores how the European Economic and Monetary Union (EMU) succumbed to the serious economic crisis it is currently in, arguing that the crisis is related to the recent rise in the external imbalances of EMU's member-states under monetary union. It attributes EMU's current crisis, and the growing external imbalances between its member-states that helped produce it, to structural flaws in the governance of labor markets that are present in EMU's institutional design. Focusing on the experiences of Denmark, Germany, Ireland, Italy, Spain, and the Netherlands, the book asks why EMU's core economies have emerged from the sovereign debt crisis with little speculative pressure. This chapter discusses inflation and wage growth convergence in Europe before the creation of the EMU and explains the origins of the crisis using the fiscal and competitive hypotheses. It also considers gaps in the competitiveness hypothesis and provides an overview of the book's structure.Less
This book explores how the European Economic and Monetary Union (EMU) succumbed to the serious economic crisis it is currently in, arguing that the crisis is related to the recent rise in the external imbalances of EMU's member-states under monetary union. It attributes EMU's current crisis, and the growing external imbalances between its member-states that helped produce it, to structural flaws in the governance of labor markets that are present in EMU's institutional design. Focusing on the experiences of Denmark, Germany, Ireland, Italy, Spain, and the Netherlands, the book asks why EMU's core economies have emerged from the sovereign debt crisis with little speculative pressure. This chapter discusses inflation and wage growth convergence in Europe before the creation of the EMU and explains the origins of the crisis using the fiscal and competitive hypotheses. It also considers gaps in the competitiveness hypothesis and provides an overview of the book's structure.
Bruno Contini, Roberto Leombruni, Lia Pacelli, and Claudia Villosio
- Published in print:
- 2009
- Published Online:
- February 2013
- ISBN:
- 9780226470504
- eISBN:
- 9780226470511
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226470511.003.0011
- Subject:
- Economics and Finance, International
This chapter, which describes the structure of wages within and between Italian firms in the 1990s, shows that firms do not follow a pay compression model in their wage policy. Firm wage policy ...
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This chapter, which describes the structure of wages within and between Italian firms in the 1990s, shows that firms do not follow a pay compression model in their wage policy. Firm wage policy matters in shaping the wage level distribution and also the wage change distribution. Low-wage firms almost always exhibit the highest positive net flows, which is consistent with what is observed in other countries. The link between firm size and within-firm individual seniority is positive, and exit rates decline as wages increase. In Italy, almost all large firms directly bargain over wages with unions, holding the nationwide industry contract as a benchmark. Negative wage growth is more common among movers and short-tenure workers. In addition, worker entry and exit rates are higher at low-pay firms and lower at high-pay firms.Less
This chapter, which describes the structure of wages within and between Italian firms in the 1990s, shows that firms do not follow a pay compression model in their wage policy. Firm wage policy matters in shaping the wage level distribution and also the wage change distribution. Low-wage firms almost always exhibit the highest positive net flows, which is consistent with what is observed in other countries. The link between firm size and within-firm individual seniority is positive, and exit rates decline as wages increase. In Italy, almost all large firms directly bargain over wages with unions, holding the nationwide industry contract as a benchmark. Negative wage growth is more common among movers and short-tenure workers. In addition, worker entry and exit rates are higher at low-pay firms and lower at high-pay firms.
Lane Kenworthy
- Published in print:
- 2013
- Published Online:
- September 2013
- ISBN:
- 9781447308942
- eISBN:
- 9781447310822
- Item type:
- chapter
- Publisher:
- Policy Press
- DOI:
- 10.1332/policypress/9781447308942.003.0003
- Subject:
- Sociology, Social Stratification, Inequality, and Mobility
This essay shows that there has only been one brief period since the 1970s in which real wages in the bottom half of the American income distribution have increased - the late 1990s. During this ...
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This essay shows that there has only been one brief period since the 1970s in which real wages in the bottom half of the American income distribution have increased - the late 1990s. During this unusual period unemployment was low but this did not trigger a rise in inflation. In fact, a tight labour market led to improvements in job quality for low earners, as employers offered more fringe benefits to attract good workers. Given this evidence, the chapter argues that a high employment rate is an important policy goal when it comes to addressing stagnant wage growth, steeper rates of inequality and stubbornly high poverty levels.Less
This essay shows that there has only been one brief period since the 1970s in which real wages in the bottom half of the American income distribution have increased - the late 1990s. During this unusual period unemployment was low but this did not trigger a rise in inflation. In fact, a tight labour market led to improvements in job quality for low earners, as employers offered more fringe benefits to attract good workers. Given this evidence, the chapter argues that a high employment rate is an important policy goal when it comes to addressing stagnant wage growth, steeper rates of inequality and stubbornly high poverty levels.
Brian Nolan (ed.)
- Published in print:
- 2018
- Published Online:
- October 2018
- ISBN:
- 9780198807056
- eISBN:
- 9780191844836
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198807056.001.0001
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This book addresses the central challenge facing rich countries: how to ensure that ordinary working families see their living standards and the prospects for their children improve rather than ...
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This book addresses the central challenge facing rich countries: how to ensure that ordinary working families see their living standards and the prospects for their children improve rather than stagnate over time. It presents the findings from a comprehensive analysis of performance over recent decades across the rich countries of the OECD, in terms of real income growth around and below the middle. It relates this performance to overall economic growth, exploring why these often diverge substantially, and to the different models of capitalism or economic growth embedded in different countries. In-depth comparative and UK-focused analyses also focus on wages and the labour market and on the role of redistribution. Going beyond income, other indicators and aspects of living standards are also incorporated including non-monetary indicators of deprivation and financial strain, wealth and its distribution, and intergenerational mobility. By looking across this broad canvas, the book teases out how ordinary households have fared in recent decades in these critically important respects, and how that should inform the quest for inclusive growth and prosperity.Less
This book addresses the central challenge facing rich countries: how to ensure that ordinary working families see their living standards and the prospects for their children improve rather than stagnate over time. It presents the findings from a comprehensive analysis of performance over recent decades across the rich countries of the OECD, in terms of real income growth around and below the middle. It relates this performance to overall economic growth, exploring why these often diverge substantially, and to the different models of capitalism or economic growth embedded in different countries. In-depth comparative and UK-focused analyses also focus on wages and the labour market and on the role of redistribution. Going beyond income, other indicators and aspects of living standards are also incorporated including non-monetary indicators of deprivation and financial strain, wealth and its distribution, and intergenerational mobility. By looking across this broad canvas, the book teases out how ordinary households have fared in recent decades in these critically important respects, and how that should inform the quest for inclusive growth and prosperity.
Mark B. Stewart
- Published in print:
- 2011
- Published Online:
- April 2015
- ISBN:
- 9780199605439
- eISBN:
- 9780191806803
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:osobl/9780199605439.003.0009
- Subject:
- Business and Management, Political Economy
The UK introduced the National Minimum Wage (NMW) in April 1999 with an adult rate of £3.60 per hour and as of October 2010 stands at £5.93. This chapter looks at a decade of the NMW in action. It ...
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The UK introduced the National Minimum Wage (NMW) in April 1999 with an adult rate of £3.60 per hour and as of October 2010 stands at £5.93. This chapter looks at a decade of the NMW in action. It examines how the initial rate was set and how upratings have compared with general wage growth. It asks how many employees have directly benefited from the NMW, and how the rate compares with rates in other countries. It provides an overview of the different approaches that have been used to estimate the employment effects of the NMW and reviews the evidence provided by this research. It determines whether the initial rate was set too low and where the rate should be set now.Less
The UK introduced the National Minimum Wage (NMW) in April 1999 with an adult rate of £3.60 per hour and as of October 2010 stands at £5.93. This chapter looks at a decade of the NMW in action. It examines how the initial rate was set and how upratings have compared with general wage growth. It asks how many employees have directly benefited from the NMW, and how the rate compares with rates in other countries. It provides an overview of the different approaches that have been used to estimate the employment effects of the NMW and reviews the evidence provided by this research. It determines whether the initial rate was set too low and where the rate should be set now.