: Does Good Marketing Cause Bad Unemployment?

Steven M. Shugan ()
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Steven M. Shugan: Warrington College of Business, University of Florida, 201B Bryan Hall, P.O. Box 117155, Gainesville, Florida 32611

Marketing Science, 2007, vol. 26, issue 1, 1-17

Abstract: Questionable methods for increasing nominal wages reduce real wages (i.e., buying power) by creating inflation, shortages, lower quality, and long-term unemployment. To increase real wages (i.e., the ability to buy more), economic principles prescribe increasing productivity (i.e., greater output from less input). In contrast, marketing principles prescribes increasing the value of output (i.e., greater customer benefits) through innovation. Beyond increasing real wages, innovation spawns new occupations better matching individuals with skills and providing greater nonmonetary benefits (i.e., job satisfaction). Unfortunately, threatened entrenched incumbents often solicit protectionist legislation claiming negative externalities (e.g., short-term unemployment, lower wages, and burdens on society). Innovation does require labor to move from inferior to superior organizations (i.e., unemployment). However, protectionism only delays and dramatically aggravates the inevitable trauma associated with progress, as worker skills, firm practices, and buyer welfare fall further behind. Recent attacks demonizing Wal-Mart (e.g., the dubious Vlasic pickle claim) epitomize this situation—they are archaic vanilla protectionism, menacing both imperiled consumers and every consumer-driven business.

Keywords: Wal-Mart; low-prices; unemployment; wages; benefits; customer-driven orientation; market-based economy; consumer-driven organizations; trade unions; marketing principles; marketing theory; low prices; unemployment; wages; inflation (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (3)

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