Saturday, September 03, 2016

Saturday Afternoon Links

Assorted content for your weekend reading.

- Brendan Duke examines the connection between wage growth and worker productivity, and makes the case that the former may lead to the latter:
The 1929–1950 increase in wages was at first a result of several policies that directly raised workers’ wages, including the first federal minimum wage, the first federal overtime law, and the National Labor Relations Act, which made it easier for workers to join a union and bargain with their employers. The entry of the United States into World War II further drove investment higher, as the economy converted into what Gordon describes as a “maximum production regime.”

It is striking that during this period of rapid productivity growth, wages for production workers grew even faster than productivity growth did. The current debate about whether a typical worker’s compensation has kept track with the economy’s productivity typically envisions productivity growth as the precondition for wage growth. But Gordon’s research implies that the relationship can go both ways: Not only can productivity growth raise wages, but higher real wages also can boost productivity growth—the main reason for slow gross domestic product growth—by giving firms a reason to purchase capital.

Can higher wages raise productivity growth in 2017? Basic economic theory and common sense suggests that an increase in the price of labor—wages—achieved through higher labor standards will cause firms to invest in more capital, raising the economy’s productivity.
- Guy Caron points out that international tax agreements which should serve to facilitate enforcement are instead allowing the greedy rich to evade meaningful taxes everywhere, while the Star argues that no corporation should be able to avoid social responsibilities through sweetheart tax deals. And James Wright warns of an impending deal on services which may tie the hands of governments seeking to work in the public interest more directly than any existing trade agreement.

- James Walsh reports on the devastating effects of the UK Conservatives' efforts to push people out of social housing - which will of course sound far too familiar for many in Saskatchewan.

- Finally, Michelle Chen comments on the gigantic ecological deficit being imposed on future generations through unchecked climate change, while David Roberts discusses the environmental devastation (and cleanup costs) which figure to be borne by the public as the coal industry ceases to be viable. And Brent Patterson highlights a noteworthy study on the lasting effects of the Husky oil spill in the North Saskatchewan River.

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