The effect of reducing wages of remote workers on society. A preliminary assessment

Edoardo Beretta, Marco Desogus and Soorjith Illickal Karthikeyan ()
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Soorjith Illickal Karthikeyan: Indian Institute of Management Udaipur, Rajasthan, India

PSL Quarterly Review, 2023, vol. 76, issue 307, 373-392

Abstract: Remote work has represented 'the' alternative to office work during the COVID-19 pandemic as it has (while enabling employees to fulfill tasks from home) prevented or broken contagion chains. Though not a new approach to work, the recent emphasis on telework has come with pleas to reduce the wages of remote workers. By means of a logical-analytical approach, the article analyzes why such policies are not only unjustifiable in terms of keeping average wages at an at least stable level, but even more if the final sales prices would not shrink accordingly and would boost the share of corporate profits to GDP. Even cutting wages and final sales could be "deflationary" first and "recessionary" then (i.e., impoverish the economy). The article preliminarily analyzes the economic impact of such proposals on countries with a large ICT sector contributing to GDP (i.e., where remote work is facilitated due to the wide diffusion of tools such as Internet connections, computer devices, etc., enabling it) and an underperforming labor market in terms of female participation.

Keywords: Average wages; COVID-19 pandemic; income inequality; remote work (search for similar items in EconPapers)
JEL-codes: E24 J8 (search for similar items in EconPapers)
Date: 2023
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