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Competitiveness and wages in the Eurozone

POSTED ON August 16th  - POSTED IN Labour & Wages
From rippedoffbritons.com

From rippedoffbritons.com

Martin Sandbu has a useful piece in the Financial Times entitled Free Lunch: getting real about competitiveness. It makes many points that we regularly make here: most fundamentally, that we should not confuse the competitiveness of companies with the so-called ‘competitiveness’ of countries. (To get a first sense of this, ponder the difference between a failed company and a failed state.)

Sandbu’s focus is not on ‘tax competitiveness‘ or on the ‘competitiveness’ of a country’s financial sector policies, but on exchange rate and wage issues, and the Eurozone. He describes the ‘conventional wisdom’ going like this: countries in the Eurozone with large trade deficits cannot adjust their currencies so they have to restore ‘competitiveness’ by driving down wages. Then he sets about challenging the conventional wisdom, on several fronts.

Wages and national competitiveness: getting real

POSTED ON August 16th  - POSTED IN Labour & Wages
From rippedoffbritons.com

From rippedoffbritons.com

Martin Sandbu has a useful piece in the Financial Times entitled Free Lunch: getting real about competitiveness. It makes many points that we regularly make here: most fundamentally, that we should not confuse the competitiveness of companies with the so-called ‘competitiveness’ of countries. (To get a first sense of this, ponder the difference between a failed company and a failed state.)

Sandbu’s focus is not on ‘tax competitiveness‘ or on the ‘competitiveness’ of a country’s financial sector policies, but on exchange rate and wage issues, and the Eurozone. He describes the ‘conventional wisdom’ going like this: countries in the Eurozone with large trade deficits cannot adjust their currencies so they have to restore ‘competitiveness’ by driving down wages. Then he sets about challenging the conventional wisdom, on several fronts.

Why the Competitiveness Agenda is likely to mean slower growth

POSTED ON October 2nd  - POSTED IN Blog, Labour & Wages, The Harms
Matthew Watson, Professor of Political Economy, University of Warwick

Matthew Watson, Professor of Political Economy, University of Warwick

Update: now re-published at Naked Capitalism.

The purveyors of the modern-day Competitiveness Agenda exhibit pronounced Panglossian tendencies. They see only positive things for everyone if their advice is followed. A ‘competitive’ economy will boast high levels of growth, they say, and the whole of society will benefit when the trickle-down effects impact on their lives.

As Matthew Watson argues, however, this Panglossian scenario elevates optimism over evidence. The modern-day Competitiveness Agenda can be turned on its head in the interests of a more progressive social settlement by exploring its fundamental anti-growth dynamics.

This post has been added to our relatively new page called The Harms which outline the range of different ways in which the Competitiveness Agenda tends to hurt those countries that practise it.

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The Anti-Growth Dynamics of the Competitiveness Agenda

By Matthew Watson

Labour standards and the race to the bottom

POSTED ON July 3rd  - POSTED IN Blog, Labour & Wages
Labour competition

From rippedoffbritons.com

From The Economist, in November 2013:

“Globalisation sceptics often warn of the pernicious effects on labour standards of international competition for investment. In the race for foreign business, the argument goes, countries cut back on regulation and enforcement of decent working conditions in order to lower labour costs.”

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