Monday Morning Links

Miscellaneous material to start your week.

- Brian Nolan examines the relationship between inequality and median incomes in developed countries, and concludes that there's little basis to view inequality as an inevitable outcome of international forces:

Globalisation and technological change are often portrayed as exogenous forces sweeping across the rich countries, inexorably driving up inequality and forcing workers to accept wage stagnation (and often less security) if they are to hold on to their jobs. Instead, the variation in country experiences shows how much institutions and policy responses matter to how these forces – themselves subject to human agency rather than God-given – play out in the job market and affect household disposable incomes. Wage-setting institutions clearly have a critical influence. The Belgian combination of wages indexed to inflation, collective agreements covering most workers, and a high minimum wage underpinned significant wage growth across the distribution. In Australia, the extension of collectively negotiated employment terms and conditions over much of the work force, together with a very high minimum wage, play a key role. By contrast, the remarkably poor earnings performance of the UK over the last decade is in a context where wage bargaining has become individualised.

Broader welfare state institutions also play a critical role in levels and patterns of employment. Countries with reasonably strong income growth over recent decades have generally combined some increase in real wages with a rise in the overall employment rate and especially female employment. Recent UK and much longer US experience shows, however, that rising female employment when combined with very weak real wages still equates to stagnating living standards. The welfare state is also key to whether the costs associated with increasing women’s employment are borne by the families themselves or socially, with implications for their welfare generally missed by current metrics. Furthermore, countries have made very different choices with respect to the regulation of employment contracts and conditions, offsetting or accelerating the effects of forces making work more precarious.

Country contexts really matter, and policy responses must be framed in light of the institutional point of departure and distinctive challenges each country faces. Promoting economic growth and ensuring that its benefits are transmitted to middle and lower income households need equal attention; redistribution can be strengthened, while wages generated in the market remain fundamental. The current political salience of inequality and stagnation provides a window of opportunity for a fundamental reassessment of how growth and prosperity are being pursued; the US experience should not however dominate in the search for explanations and effective responses. 

- And Salvatore Morelli studies (PDF) the shape of income concentration around financial crises, concluding that market shocks don't have any lasting effect in equalizing income unless paired with meaningful public policy changes.

- John Vandermeer and Ivette Perfecto point out how privatization and financialization set Puerto Rico up for the humanitarian disaster resulting from Hurricane Maria.

- Alexi White warns that the Doug Ford PCs are likely just getting started in slashing programs needed to support the most vulnerable people in Ontario. And Alissa Tedesco, Jon Herriot and Katie Boone discuss how Ford's attacks against basic social benefits will endanger the health of the public at large, while Farrah Merali notes that the PCs' threats to safe injection sites similarly stand to end lives to accomplish nothing more than political posturing. 

- Finally, Zack Beauchamp reports on new research which examines terminations arising out of public commentary at U.S. universities, and finds both that any concern about speech is overblown, and that it's left-wing speech that's actually more likely to result in reprisals.