Some obstacles to wage-led growth

J.E. King
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J.E. King: La Trobe University, Melbourne and Federation University Australia, Mt Helen, Australia

Review of Keynesian Economics, 2019, vol. 7, issue 3, 308-320

Abstract: I begin by providing a non-technical summary of the Post-Keynesian model of wage-led growth. I then summarise the work of microeconomists and industrial relations researchers on the reasons why real wages have failed to keep pace with labour productivity, leading to a steady decline in the wage share of GDP. These include the decline of trade unions, the erosion of the welfare state and (especially) the increasing ability and willingness of employers to evade and avoid labour market regulation. I conclude that these microeconomic problems need to be solved for a macroeconomic strategy of wage-led growth to be possible.

Keywords: deregulation; inequality; labour markets; trade unions; wage-led growth (search for similar items in EconPapers)
JEL-codes: E11 E64 J30 J40 J80 J88 (search for similar items in EconPapers)
Date: 2019
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