Devaluation of one's labor in labor-commodities-money-commodities-labor exchange as a cause of inequality growth
The inequality growth during the last quarter century is explained as caused by a decreasing labor-labor exchange rate, i.e. devaluation of one's labor in exchange for other's labor embodied in the commodities affordable for one's earnings. We show that the productivity growth allows employers to compensate workers with always a lower labor equivalent, i.e., in a sense increasingly underpay works, maintaining however an impression of fair pay due to an increasing purchasing power of earnings. This conclusion is based on the OECD 1990-2014 data for G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom and United States) and Denmark (known for the world least inequality). Finally, it is shown that the dependence between the degree of inequality and the degree of decline of the labor-labor exchange rate is statistically highly significant.
|Date of creation:||2016|
|Contact details of provider:|| Web page: http://www.wiwi.kit.edu/|
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- Schlenker, Eva & Schmid, Kai D., 2013.
"Capital income shares and income inequality in the European Union,"
FZID Discussion Papers
80-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).
- Eva Schlenker & Kai D. Schmid, 2014. "Capital income shares and income inequality in the European Union," Working Papers 329, ECINEQ, Society for the Study of Economic Inequality.
- Eva Schlenker & Kai Daniel Schmid, 2013. "Capital Income Shares and Income Inequality in the European Union," IMK Working Paper 119-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Adler, Martin & Schmid, Kai Daniel, 2013. "Factor Shares and Income Inequality. Empiral Evidence from Germany 2002 – 2008," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 133(2), pages 121-132.
- Martin Adler & Kai Daniel Schmid, 2012. "Factor Shares and Income Inequality: Empirical Evidence from Germany 2002-2008," SOEPpapers on Multidisciplinary Panel Data Research 460, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Martin Adler & Kai Daniel Schmid, 2012. "Factor Shares and Income Inequality - Empirical Evidence from Germany 2002-2008," IAW Discussion Papers 82, Institut für Angewandte Wirtschaftsforschung (IAW).
- Adler, Martin & Schmid, Kai Daniel, 2012. "Factor shares and income inequality - Empirical evidence from Germany 2002 - 2008," University of Tuebingen Working Papers in Economics and Finance 34, University of Tuebingen, Faculty of Economics and Social Sciences.
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