Wage-led Growth: An equitable strategy for economic recovery

This original and extensive study examines the causes and consequences associated with the falling wage share and rising inequality in income distribution, relating to both aggregate demand and labour productivity. It presents new empirical and econometric evidence regarding the economic causes and potential impact of changing income distribution.

The volume argues that distributional shifts in favour of capital and the rise in income inequality have reduced economic growth and increased economic instability. It shows that that the risk of wage moderation is real and that the debt-led and export-led strategies pursued in many countries are related to these economic problems.

In turn, the book analyses the policy implications and strategies for a wage-led recovery that would alleviate the global problems associated with the rising household debt needed to sustain consumption expenditures and with new mercantilist policies based on wage moderation. Its findings point to the need to “rebalance” functional income distribution. This “rebalancing” in favour of wages will be an essential element of equitable and sustainable growth and will require strong policy coordination. Wage-led Growth provides an overarching framework that will prove invaluable to present and future researchers and policy-makers.

Co-published with Palgrave Macmillan as part of the Advances in Labour Studies series

List of tables and figures
Notes on contributors
1. Wage-led growth: Concept, theories and policies
2. Why have wage shares fallen? An analysis of the determinants of functional income distribution
3. Is aggregate demand wage-led or profit-led? A global model
4. Wage-led or profit-led supply: Wages, productivity and investment
5. The role of income inequality as a cause of the Great Recession and global imbalances
6. Financialization, the financial and economic crisis, and the requirements and potentials for wage-led recovery