Krugman: the great wealth transfer
A recommended article by Paul Krugman on US inequality trends appears in the Rolling Stone Review of Economics, The Great Wealth Transfer.
A recommended article by Paul Krugman on US inequality trends appears in the Rolling Stone Review of Economics, The Great Wealth Transfer.
Someone should give Krugman a copy of the Life and Times of Liberal Democracy by C. B. Macpheron, and he could take the theme of economic inequality leads to political inequality and develop a radical critique of U.S. political economy. In the meantime since he found himself with an audience, this mainstream economists has become the best social critic to appear in the NYT. This piece deserves wide circulation.
I don’t see how Krugman can compare manufactoring wages with those of the service industry. Manufactoring wages have always been higher. I’m also not sure what unionizing Walmart would do for low income people. They have razor thin profit margins, and make money by selling on mass. They keep prices low and afforadble for low income Americans, and they increase their buying power. By unionizing, they would have to pass the new costs onto the consumers, which would increase prices. Looks like an insider-outsider advantage.
(When I say manufactoring wages have always been higher, I mean in the lower level positions of the organization.)
Faced with a unionized workforce, Wal*Mart may well pass along all of the cost increase to prices, though prices are so low that this prospect does not concern me. But they may also choose to reduce the share going to senior executives and owners. In the end it could be a bit of both. I suggest that this would be a good bargain: higher wages for workers paid for by slightly higher prices at Wal*Mart and lower incomes for the fabulously wealthy Walton family.