Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • 2019 Federal Budget Analysis February 27, 2019
    Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis  Aim high, spend low: Federal budget 2019 by David MacDonald (CCPA) Organizational Responses Canadian Centre for Policy Alternatives Canadian Union of Public Employees Public Service Alliance […]
    Canadian Centre for Policy Alternatives
  • Boots Riley in Winnipeg May 11 February 22, 2019
    Founder of the political Hip-Hop group The Coup, Boots Riley is a musician, rapper, writer and activist, whose feature film directorial and screenwriting debut — 2018’s celebrated Sorry to Bother You — received the award for Best First Feature at the 2019 Independent Spirit Awards (amongst several other accolades and recognitions). "[A] reflection of the […]
    Canadian Centre for Policy Alternatives
  • CCPA-BC welcomes Emira Mears as new Associate Director February 11, 2019
    This week the Canadian Centre for Policy Alternatives – BC Office is pleased to welcome Emira Mears to our staff team as our newly appointed Associate Director. Emira is an accomplished communications professional, digital strategist and entrepreneur. Through her former company Raised Eyebrow, she has had the opportunity to work with many organizations in the […]
    Canadian Centre for Policy Alternatives
  • Study explores media coverage of pipeline controversies December 14, 2018
    Supporters of fossil fuel infrastructure projects position themselves as friends of working people, framing climate action as antithetical to the more immediately pressing need to protect oil and gas workers’ livelihoods. And as the latest report from the CCPA-BC and Corporate Mapping Project confirms, this framing has become dominant across the media landscape. Focusing on pipeline […]
    Canadian Centre for Policy Alternatives
  • Study highlights ‘uncomfortable truth’ about racism in the job market December 12, 2018
    "Racialized workers in Ontario are significantly more likely to be concentrated in low-wage jobs and face persistent unemployment and earnings gaps compared to white employees — pointing to the “uncomfortable truth” about racism in the job market, according to a new study." Read the Toronto Star's coverage of our updated colour-coded labour market report, released […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Recovery Demands Increase in Labour’s Share

The just-released 2011 ILO World of Work Report is a must read for progressive economists.

Released on the eve of the G-20 meetings, the report underlines the gravity of the current global employment situation and warns of the need to put job creation first if we are to avoid a very extended period of high unemployment and rising incidence of precarious work. It emphatically calls for demand side measures to create jobs, along with job friendly labour market policies.

Most important is the theoretical argument and the empirical research which underlies the report. It argues – based on a great deal of new empirical research  – that the way out of the jobs crisis lies in RAISING wages, especially in the economies with large trade surpluses. Moreover,  Chapter 2 documents  the large shift in income from labour to capital in the decade leading up to the crisis, which is mainly attributed to the rising GDP share of financial profits in the advanced economies.

The rise in the profit  share was not accompanied by a rise in real economy job creating capital investment, but rather by increased dividend payouts and accumulation of surplus cash in financial assets. Replicating Jim Stanford’s  important work on the Canadian case, they find that the main drivers of real investment are on the demand side, and that  pro capital policies have not yielded results.

It is argued that higher wages might in fact boost real investment by sustaining and increasing effective global demand and helping resolve global trade imbalances.

In an accompanying editorial, Raymond Torres writes,

“It is time to reconsider “wage moderation” policies. Over the past two decades, the majority of countries have witnessed a decline in the share of income accruing to labour …Nor has wage moderation translated into higher real investment: between 200 and 2009, more than 83% of countries experienced an increase in the share of profits in GDP, but those profits were used increasingly to pay dividends rather than invest. And there is no clear evidence that wage moderation has boosted employment.”

At pages 62-63, it is argued that collective bargaining and minimum wages can help raise the labour share without negatively impacting on employment.

Enjoy and share:

Comments

Comment from Brian Dell
Time: November 1, 2011, 12:08 am

The wedge between wages and the opportunity cost of labor is still there, meaning unions still create a deadweight loss measured by the surface of the usual Harberger triangle.

Comment from Darwin O’Connor
Time: November 1, 2011, 4:29 am

The purpose of the economy is to serve people, not the other way around. Without unions the ecomony frequently fails to provide jobs at livable wages. It is not unions that should change, but the economy should be changed.

Comment from Glen
Time: November 1, 2011, 7:08 am

Higher wages will have no effect on the BoP via BoT so long as mercantilist countries have other tools at their disposal. One only needs to look at Germany and Japan to verify that. The current acount must be protected by force.

Comment from Purple Library Guy
Time: November 2, 2011, 2:18 pm

In any case, the current issue is far from being opportunity cost. The issue is markets. Doesn’t matter what the cost of labour is if nobody’s buying your product. And guess what, nobody’s buying the product if nobody’s getting paid enough to afford it. That’s why corporations are sitting on tons of uninvested cash–it’s not that the investment opportunities would be there if only they could find a cheap enough workforce, it’s that the investment opportunities would be there if only they paid the workforce enough for markets to exist.

Comment from Darwin O’Connor
Time: November 3, 2011, 5:46 am

Could one of the reason that corporations are sitting on so much cash is to invest it in derivatives and other financializationisms because that is more profitable the investment in real things.

Write a comment





Related articles