Wage-led growth and the political aspects of wage-led recovery
Professor Özlem Onaran, University of Greenwich
Room G.15, 15-19 Tyndalls Park Road.
This paper presents the empirical evidence about the impact of the simultaneous race to the bottom in labour’s share on growth after taking global interactions into account based on the Post-Kaleckian theoretical framework. The world economy and large economic areas are likely to be wage-led; and parameter shifts in different periods are unlikely to make a difference in this finding. The effects that can come from a wage-led recovery on growth and hence employment are positive, however they are also modest in magnitude. We then present an alternative scenario based on a policy mix of wage increases and public investment. A coordinated mix of polices in the G20 targeted to increase the share of wages in GDP by 1%-5% in the next 5 years and to raise public investment in social and physical infrastructure by 1% of GDP in each country can create up to 5.84% more growth in G20 countries. The final section addresses policy proposals and the political aspects and barriers to a wage-led recovery.
Here are the two papers for the talk:
Özlem Onaran is Professor of Economics at the University of Greenwich and the director of the Greenwich Political Economy Research Centre. She has done extensive research on issues of inequality, wage-led growth, employment, globalization, gender, and crises. She has directed research projects for the International Labour Organisation, the Institute for New Economic Thinking, the Foundation of European Progressive Studies, the Vienna Chamber of Labour, the Austrian Science Foundation, and Unions21. She is member of the Scientific Committee of the Foundation of European Progressive Studies, Scientific Advisory Board of Hans Boeckler Foundation, and the Policy Advisory Group of the Women's Budget Group. She has more than seventy articles in books and peer reviewed journals such as Cambridge Journal of Economics, World Development, Environment and Planning A, Public Choice, Economic Inquiry, European Journal of Industrial Relations, International Review of Applied Economics, Structural Change and Economic Dynamics, Eastern European Economics, and Review of Political Economy.