Onaran, Özlem ORCID: 0000-0002-6345-9922 and Stockhammer, Engelbert (2016) Progressive policies for wage-led growth in Europe. [Working Paper]

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Abstract

Results of two new projects for FEPS and TASC by Onaran and Obst (2015) and Stockhammer and Wildauer (2015) show that the decline in the wage share was associated with a weaker and more volatile growth performance in the EU as a whole as well as in the vast majority of countries including the UK and Germany; this is what we call a wage-led demand regime. Stimulating wages in the EU would not only improve economic performance but would also help tackle unsustainable growth that is either driven by debt or by an excessive reliance on exports. While a higher wage policy can be implemented in a large single country with a large domestic market such as the UK or Germany, the impact would be stronger if coordinated at the European level. This finding has significant policy implications ahead of the EU referendum in the UK: the UK should see the EU membership as an opportunity and lead high road labour market policies in the EU as opposed to its current position of promoting low road policies, and use every chance to improve the cooperation among the pro-labour forces.

Item Type:	Working Paper
Uncontrolled Keywords:	Wage share, growth, Europe, UK referendum
Subjects:	H Social Sciences > H Social Sciences (General)
Faculty / School / Research Centre / Research Group:	Faculty of Business Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Greenwich Political Economy Research Centre (GPERC)
Last Modified:	04 Aug 2021 16:33
URI:	http://gala.gre.ac.uk/id/eprint/15527

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