Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Labor’

Weak Pay Raises in Europe Pose Political Threat

Posted by hkarner - 6. September 2017

Date: 05-09-2017
Source: The Wall Street Journal

Persistent wage issue has potential to boost anti-establishment parties in eurozone countries with weaker economies

The biggest puzzle in economics right now is the apparent breakdown in the inverse relationship between unemployment and inflation set out in a famous curve by New Zealand economist and sometime crocodile hunter A.W. Phillips.

In Japan, Germany and the U.S., unemployment has dipped below what economists think is a sustainable level, yet few signs suggest that workers are responding in the usual way and demanding higher wages.

In the U.S., limp pay growth gives the Federal Reserve a reason to delay interest-rate hikes. In Japan it raises the specter of a slide back into deflation. But in Europe, it is a more serious problem, and it exacerbates the political tensions that pose the biggest threat to the survival of the eurozone. Den Rest des Beitrags lesen »


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Labor Markets in the Age of Automation

Posted by hkarner - 8. Juni 2017

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Restoring Competition in the Digital Economy

Posted by hkarner - 18. Mai 2017

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Drivers of Declining Labor Share of Income

Posted by hkarner - 11. April 2017

Posted on by iMFdirect

By Mai Chi Dao, Mitali Das, Zsoka Koczan, and Weicheng Lian

After being largely stable in many countries for decades, the share of national income paid to workers has been falling since the 1980s. Chapter 3 of the April 2017 World Economic Outlook finds that this trend is driven by rapid progress in technology and global integration.


Labor’s share of income declines when wages grow more slowly than productivity, or the amount of output per hour of work. The result is that a growing fraction of productivity gains has been going to capital. And since capital tends to be concentrated in the upper ends of the income distribution, falling labor income shares are likely to raise income inequality.IMF.WEOChap3.Apr2017_chart2.jpg

Trending down

In advanced economies, labor income shares began trending down in the 1980s. They reached their lowest level of the past half century just prior to the global financial crisis of 2008, and have not recovered materially since. Labor income shares now are almost 4 percentage points lower than they were in 1970.

Despite more limited data, labor shares have also declined in emerging market and developing economies since the early 1990s. This is especially the case for the larger economies in this group. In China, for example, despite impressive gains in poverty reduction over the past two decades, labor shares still fell by almost 3 percentage points.

Indeed, as growth remains subpar in many countries, an increasing recognition that the gains from growth have not been broadly shared has strengthened a backlash against economic integration and bolstered support in favor of inward-looking policies. This is especially the case in several advanced economies.

Our study takes an in-depth look at the symptoms and drivers of this downward trend in labor share of income.

Technology: a key driver in advanced economies Den Rest des Beitrags lesen »

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China’s Shrinking Workforce Affects Economic Transition, Expert Says

Posted by hkarner - 24. November 2016

Date: 23-11-2016
Source: Caixin

The size of China’s labor force, including people between the ages of 16 and 59, has declined for three years since 2012. The total is 906 million workers, down from just over 910 million. The government anticipates the workforce shrinking to 700 million by 2050. The decline is especially sharp for semi-skilled blue-collar workers as more youth pursue college studies and prefer work in the service sector. A Chinese expert on labor economics reports that almost half of new entrants in China’s job market hold a college degree. Another challenge is low fertility rates. China only recently loosened restrictions on its strict one-child policy, but families have learned that limiting the number of children increases personal wealth. In a report for Caixin, Coco Feng interviews the head of the China Institute for Employment Research at Renmin University, who notes that such labor shortages could delay China’s transition from manufacturing economy to a service- and consumption-driven one. – YaleGlobal Den Rest des Beitrags lesen »

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Low wages are both a cause and a consequence of low productivity

Posted by hkarner - 19. März 2016

Date: 18-03-2016
Source: The Economist: Free exchange
Subject: Doing less with more

Labor Productivity GrowthCOUNTRIES grow richer when they learn how to produce more valuable stuff per person. Sadly, many advanced economies seem to have lost the knack. Except for a brief spurt around the turn of the millennium, productivity has grown painfully slowly in rich countries over the last four decades (see chart)—a factor, economists reckon, that has contributed to stagnant pay. Labour productivity in America fell at a startling 2.2% annual pace in the fourth quarter of 2015; growth of 0.6% for the year as a whole was better, but hardly impressive.

Orthodox explanations for the problem tend to fall into one of three categories. The first, championed by Robert Gordon, an economist at Northwestern University, suggests humanity has run out of big ideas.* Recent technological advances, the argument goes, lack the transformative power of the inventions of the 19th and early 20th centuries. Electricity and indoor plumbing, in Mr Gordon’s view, altered lives in a far more fundamental way than the digital revolution has managed. We were promised flying cars, to paraphrase Peter Thiel, a venture capitalist, but wound up instead with social networks.

There are several inconsistencies in this story, however. Recent developments in artificial intelligence and robotics look at least as transformative as the gains in software and computing that powered the productivity boom of the late 1990s. The breadth of the productivity slowdown also poses a problem for Mr Gordon’s thesis. Productivity growth has slumped not just in the rich world, but also in developing countries such as Mexico and Turkey, which should be able to boost efficiency easily by adopting the productivity-boosting technology that is already in use in wealthier places.

Some optimists argue instead that the problem is one of measurement. Technological progress often raises productivity in ways that statistical agencies struggle to detect. The tumbling cost of digital media (vast amounts of which are in effect free) subtracts from measured GDP, for example. Meanwhile, huge improvements in the quality of goods like smartphones can be difficult for statistical agencies to capture.

Yet mismeasurement probably plays only a small role in the slowdown. Chad Syverson of the University of Chicago estimates that the productivity slump has cost America about $2.7 trillion in lost output since 2004, or about $8,400 for every American. That is far more than most estimates of the unmeasured gains from information technology. New research presented at the Brookings Institution, a think-tank, by David Byrne and John Fernald of the Federal Reserve and Marshall Reinsdorf of the IMF suggests there is little reason to think that the official data are worse now than in the late 1990s, when measured productivity growth was much higher. Indeed, the data ought to have improved, since the smartphones and computers that give statisticians such headaches are no longer made in the rich world.

A third, more worrying possibility is that ossifying rich economies are getting worse at shifting people from obsolete firms and stagnant towns to more productive ones. In America, for instance, the rate of startup formation has fallen steadily since the late 1980s, according to work by Jorge Guzman and Scott Stern of MIT. That is not as disconcerting as it sounds: the authors find that the American economy is still producing plenty of the right sort of firms, with lots of growth potential. Worryingly, however, fewer of those firms seem to grow big.

A few, high-growth startups account for most new jobs created in the private sector. But over the past 15 years America’s high-growth companies have not expanded much faster than their plodding peers. Flagging competitive pressures could be to blame. Profitable firms are increasingly likely to bank their earnings than to plough them back into the business. Regulation may also be a problem. Messrs Guzman and Stern find that entrepreneurial potential in some places, such as San Francisco and its hinterland, is far larger than in others, such as Detroit. Yet restrictions on construction constrain the movement of people from stagnant places to dynamic ones. A paper published in 2015 by Chang-Tai Hsieh of the University of Chicago and Enrico Moretti of the University of California, Berkeley, suggested that if it were easier to build in and around San Francisco, and thus cheaper to live there, employment in the area would rise by more than 500%, while many cities in the Rust Belt would all but vanish.

Waste not, want not
Orthodox economics suggests plenty of ways to nurture productivity growth—and, with luck, wages—such as boosting support for research and cutting red tape. But some in the profession are also beginning to ask whether the link between low productivity and low wages may run in both directions. Low pay allows firms to employ workers profitably in marginal jobs and to continue to use workers even though robots or software could replace them. Investments in automated checkout machines, for example, are less attractive when there are lots of cheap humans around.

Some economists, such as João Paulo Pessoa and John Van Reenen of the London School of Economics, reckon low British wages, which tumbled during the Great Recession, help account for weak productivity growth during the subsequent recovery, since firms felt less pressure to economise. Similarly, abundant, cheap labour may help explain how the American economy has managed to produce the unusual combination of soaring employment and weak wage growth in recent years.

By allowing economies to operate with lots of labour-market slack and by relying on falling pay to boost competitiveness, governments have enabled firms to make careless use of low-wage labour. By prioritising a return to full employment, politicians could give a much-needed kick to both wages and productivity.


“The Rise and Fall of American Growth: The US Standard of Living Since the Civil War”, Robert Gordon, 2016.

“Challenges to mismeasurement explanations for the US productivity slowdown”, Chad Syverson, NBER Working Paper 21974, January 2016.

“Does the United States have a productivity slowdown or a measurement problem?”, David Byrne, John Fernald and Marshall Reinsdorf, Brookings Papers on Economic Activity, Spring 2016.

“The state of American entrepreneurship? New estimates of the quantity and quality of entrepreneurship for 15 US states, 1988-2014”, Jorge Guzman and Scott Stern, 2016.

„Where has all the skewness gone? The decline in high-growth (young) firms in the US“, Ryan Decker, John Haltiwanger, Ron Jarmin and Javier Miranda, NBER Working Paper 21776, December 2015.

“Why do cities matter? Local growth and aggregate growth”, Chang-Tai Hsieh and Enrico Moratti, NBER Working Paper 21154, May 2015.

“The UK productivity and jobs puzzle: Does the answer lie in labour market flexibility?”, Joao Paulo Pessoa and John Van Reenen, Centre for Economic Performance Special Paper, June 2013.

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Arbeitsmarkt – Deutschland als Vorbild für die Schweiz?

Posted by hkarner - 26. Januar 2016

26. Januar 2016 l l Flassbeck Economics

Ein Blick auf die deutsche Lohnstatistik macht alles klar. In puncto Lohnpolitik ist Deutschland nicht Vorbild, sondern ein Schreckgespenst.

Das Thema taucht immer wieder auf. Vor ein paar Wochen etwa hat die Meldung die Runde gemacht, dass Deutschlands Arbeitslosenquote gemäss ILO-Definition mit 4,4 Prozent erstmals unter dem Wert der Schweiz von 4,9 Prozent liege. Bei der nach (unterschiedlichen Kriterien gemessenen) nationalen Definition liegt die Schweiz mit bloss 3,7 % hingegen deutlich besser als Deutschland mit 6.1 %. Das wiederum liegt nicht zuletzt daran, dass die Schweiz die Ausgesteuerten (also die Arbeitslosen, die statt Arbeitslosengelder Sozialhilfe beziehen) nicht mitrechnet. Das löste eine heftige Diskussion um die richtige Statistik aus, deren Ergebnis die Berner Zeitung wie folgt zusammenfasste: „Deutschland hat die Schweiz nur scheinbar entthront.“

Neuerdings hat nun die Verlagerung von Industriearbeitsplätzen (siehe Astom) und der Stellenabbau im Einzelhandel die Diskussion um das Arbeitsmarktmodell Deutschland neu befeuert. So lobt etwa die NZZ die deutschen Hartz 4-Reformen: „Damit stieg die Motivation, auch einen schlechter bezahlten Job anzunehmen.“ Und weiter: „Durch die Franken-Stärke ist die Schweiz nun in eine Situation geraten, die der von Deutschland in den 1990er Jahren gar nicht so unähnlich ist. Die Schweizer müssen um ihre Wettbewerbsfähigkeit kämpfen, so wie damals die Deutschen um die ihrige.“ Den Rest des Beitrags lesen »

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Reshaping the Labor Landscape

Posted by hkarner - 19. Januar 2016

Photo of Jonas Prising

Jonas Prising

Jonas Prising is Chairman and CEO of ManpowerGroup.

JAN 18, 2016, Project Syndicate

DAVOS – As the global economy changes at an ever-quickening pace, the labor market in many countries is not merely struggling to keep up, but seems to have broken down in important ways. High unemployment coexists with unfilled jobs. Rising productivity fails to translate into higher wages. And, for many, upward mobility is beyond reach, even though the economy has begun to recover.

Fortunately, change seems to be underway. Four global trends are reshaping the world of work, helping to resolve contradictions and overcome dysfunction in the labor market as companies, workers, and governments adapt to a new demographic, technological, and economic environment.

The first trend is demographic. In much of the world, aging societies and declining birth rates mean that the days of abundant labor are coming to an end. Some 60% of the world’s population lives in countries with stagnant or shrinking workforces. China’s working-age population peaked in 2010; by 2050, more than a quarter of its people will be over 65 (today, just 8% are). In Germany, the labor force is projected to shrink by six million over the next 15 years.

As labor becomes increasingly scarce, employers and policymakers are being forced to think differently about sourcing talent. In Japan, where a quarter of the population is older than 65, Prime Minister Shinzo Abe has championed a major effort to bring more women and older workers into the labor market. As a result, even though Japan’s working-age population, traditionally defined, has shrunk 8% over the past decade, the labor force decline totaled just 1%. Den Rest des Beitrags lesen »

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The World Economy’s Labor Pains

Posted by hkarner - 5. Januar 2016

Photo of Kaushik Basu

Kaushik Basu

Kaushik Basu, Senior Vice President and Chief Economist of the World Bank, is Professor of Economics at Cornell University.

JAN 4, 2016, Project Syndicate

WASHINGTON, DC – The ongoing global economic slowdown, which began in 2008 with the financial crisis in the United States, could set a new endurance record. What is certain is that with growth stalling in Japan and slowing in China, and with Russia in deep crisis and the eurozone still barely recovering, the world economy is not yet out of the woods.

This “persistent recession,” as well as some of the world’s political conflicts, are manifestations of a deeper shift in the global economy – a shift driven by two kinds of innovations: labor-saving and labor-linking.

Although labor-saving innovation has been with us for a long time, the pace has picked up. Global sales of industrial robots, for example, reached 225,000 in 2014, up 27% year on year. More transformative, however, is the rise of “labor-linking” technology: digital innovations over the last three decades now enable people to work for employers and firms in different countries, without having to migrate. Den Rest des Beitrags lesen »

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What’s Wrong With Labor Markets?

Posted by hkarner - 27. Oktober 2015

Photo of Mauro F. Guillén

Mauro F. Guillén

Mauro F. Guillén is Director of the Lauder Institute at the Wharton School.

OCT 26, 2015, Project Syndicate

PHILADELPHIA – Around the world, labor markets are in disarray. Unemployment is high in many countries, especially among the young. At the same time, many companies report having trouble finding qualified workers. Record numbers of people are going into retirement, but many would prefer to work, at least part-time. Information technology has displaced workers even as it has created new jobs.

These conflicting signals and trends are a symptom of a series of fundamental mismatches between what employers need and the talents of those they would like to hire. There have never been so many highly educated people in the world; yet the crises in Europe, the slow recovery in the United States, and the rise of emerging economies are revealing previously hidden flaws in the labor market. Addressing them will require a broad range of policy interventions. Den Rest des Beitrags lesen »

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