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2017 m. rugpjūčio 20 d., sekmadienis

Where all the political instability comes from?

Wages increase (nominaly by 2.2 per cent between 2008 and 2016). But it remains a strange case: wages rise to a lesser extent than in earlier times of declining unemployment, as the Würzburg economist Norbert Berthold noted on his blog "Economic Freedom".  "At a historically low level," the rate of change in wages in the euro area is, according to the ECB.
 
The share of employees in the product of their labor has declined for about three decades: in the Americas, this share is now below 60 percent. In Germany it decreased from 74 to today's 66 per cent.


Even with the falling employees' share the economists argue bitterly about the reasons. A particularly prominent - but also depressing - explanation comes from a group of young MIT economists  David Author and David Dorn, who now teaches at the University of Zurich. They observe in the economy a concentration on a few "superstar companies" worldwide and in many industries. You have to think not only about Google and Amazon, but also about Walmart in the trade. Large corporations pay better wages than small ones, but they also tend to get higher profits, especially to the capital. "The Winner takes it all" is called this asymmetrical distribution principle: "The winner gets everything." Winner is clearly the capital - the successful entrepreneur or shareholder (more about this - here). 


Using corruption in the government these winners block small inventive companies using red tape of regulations, and this way blocking the growth of the productivity. No growth of the productivity - no significantly higher wages. This leads to the political instability and to danger to the survival of the winners.

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