The Global Union Research Network (GURN) has published a report from Stefan Kühn who uses the IILS Global Economic Linkages (GEL) model to have a closer look on the macroeconomic effects of a change in the labour share. Assuming that labour shares play a key role in economic growth, he finds that changes are the results of the dynamics of wages, employment and productivity growth. Vice versa they are affecting the dynamics by providing growth opportunities through higher domestic demand. Therefore, a change of current austerity policies imposed on Eurozone countries in favour of a wage-led approach is needed. This is what sustainable policies of releasing pressures on fiscal balances could look like as higher consumption, employment and real wages translate e.g. to higher tax revenues. An increase in labour shares would foster employment growth while avoiding a spiral of competitive wage reductions and slow demand.
English: http://www.ilo.org/wcmsp5/groups/public ...
For more information, please contact the editor Jan Cremers, Amsterdam Institute for Advanced Labour Studies (AIAS) cbn-aias@uva.nl or the communications officer at the ETUI, Mariya Nikolova mnikolova@etui.org. For previous issues of the Collective bargaining newsletter please visit http://www.etui.org/E-Newsletters/Collective-bargaining-newsletter. You may find further information on the ETUI at www.etui.org, and on the AIAS at www.uva-aias.net.