Last week, I provided a graph in this blog post – The Left/Right distinction is as relevant as ever as corporations gouge profits out of pushing inflation (May 2, 2022) – which showed negotiated wages growth in Europe was declining and real negotiated wages had fallen sharply over the last several months. I am continually on the lookout for evidence that the current inflationary episode, no matter how alarming, is not being driven by structural forces in the labour market even though unemployment rates have fallen somewhat. A music segment follows.The basic equation is the relationship of capital (ownership) share and labor (individual employee) share of profit. This depends on labor bargaining power, since capital is largely in control of setting the wage owing to its generally superior
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Last week, I provided a graph in this blog post – The Left/Right distinction is as relevant as ever as corporations gouge profits out of pushing inflation (May 2, 2022) – which showed negotiated wages growth in Europe was declining and real negotiated wages had fallen sharply over the last several months. I am continually on the lookout for evidence that the current inflationary episode, no matter how alarming, is not being driven by structural forces in the labour market even though unemployment rates have fallen somewhat. A music segment follows.The basic equation is the relationship of capital (ownership) share and labor (individual employee) share of profit. This depends on labor bargaining power, since capital is largely in control of setting the wage owing to its generally superior market power. owing to ownership being in a position to set the wage. This can be seen as a type of monopsony.
Bill Mitchell – billy blog
With corporate profits booming, business can afford to pay higher wages
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia