The falling wage share: NIDL, deindustrialization, neoliberalism and beyond

JUAN M. GRAÑA

Conferencia; The 36th International Labour Process Conference 2018 ?Class and the labour process?; 2018

Wages and labour market reforms are back in the agenda of right wing parties specially -but not exclusively- in Latin America. After a decade where some progressive policies were followed and positive trends in employment, wages and social welfare where accomplished, the region has fallen back to an agenda similar to the ?Washington consensus?. Their spokesman stated that the slow and volatile growth in the region is the consequence of rigid labour markets, high wages and labour unions that leave little incentive for investment.However, these is only the extreme regional expression of the labour market trends experienced in the developed world since the seventies with the emergence of the New International Division of Labour when jobs fled to Southeast Asia looking for lower labour costs. But a difference remains, in the ?developed? world only low skilled jobs fled and highly skilled continued a fairly good trend, while in the rest of the ?global south? the deterioration took place for all labour classes. This paper looks at the functional distribution of income as a starting point for the study of, at least, two key aspects of the economic trends of any country. In fact, it reveals, on one hand, the way in which labour force is employed, by analysing the relationship between real wage and productivity. On the other, how income (wages and surplus) is used in the acquisition of consumption or investment goods, and therefore shapes aggregate demand trends.In this context, the aim of the present paper is to analyse the long term stagnation ?in the best case scenario- of workers living conditions in Latin America taking into account what has happened in ?developed? countries in order to distinguish which factors are domestic, which regional and, finally, which are the result of changes in global economic trends. For that objective, we choose two types of countries: the so-called ?developed? ones, and the Latin American ones. In the first group, we will work with the United States, Japan and France (which have some differences between them) while for the second group we will focus on the largest regional economies: Argentina, Brazil, Chile and Mexico. As these transformations are long term based, our analysis starts in the 1950s.