What's Causing Wage Stagnation?
In the winter issue of International Economy magazine, Adam Posen - newly returned from Bank of England to run the Peterson Institute for International Economics - offers this account of wage stagnation in the US and other developed countries:
[T]he size of the world labor force doubled at the low-skill, low-wage end by bringing China, Eastern Europe, and parts of India into the global economy. This put huge downward pressure on some wages. …
The second cause is there basically was a corrupt capture of a big chunk of our political and economic system where a lot of legislation, regulation, and corporate decisions were directed to maximizing the benefits for the few people in charge of financial firms at that particular time.
About the Author
David Frum
David Frum is a contributing editor at Newsweek and The Daily Beast and a CNN contributor. He is the author of eight books, including most recently the e-book WHY ROMNEY LOST and his first novel Patriots, published in April 2012.
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