A major flaw in the argument against increasing wages is that it assumes that businesses have not already set prices for their commodities to maximise their profits. Those prices, as we see in China, often have little do with the price of labour. The converse has also been true in New Zealand where real wages for most workers were pushed down savagely during the late 1980s and early 1990s without the overall price levels falling. The end result was a massive boost to corporate profits and a decline in the wages share of Gross Domestic Product.
Posted on: Fri, 27 Jun 2014 09:52:43 +0000
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