Seidel, T: The Impact of Globalisation with Rigid Labour Mar

Produktbeschreibung

The fall of the Iron Curtain and the opening of China toglobal markets has fundamentally changed the economic landscape forWestern societies. One implication is that low-skilled labour inadvanced OECD countries become exposed to low-wage competition. Toavoid a too uneven income distribution, many Western societies haveinstalled welfare systems interfering with labour market forces.One of the most popular instruments for this is minimum wages. Thisbook studies the implications of increased integration withlow-wage countries if labour markets in advanced economies arerigid. The autor argues that protecting wages of low-skilledworkers againstthe forces of globalisation deteriorates thesituation rather than improves it. Ironically, the income groupthat should be protected from income cuts bears the burden entirlyalone due to higher unemployment. The suggested optimal policy isthus to provide a minimum income by paying public wage supplementsrather than enforcing minimum wages.