The low wage growth promotes economic stagnation

The results of the study of the International Labour highlight the low or even no wage growth in developed economies, where those concentrates the highest rate of product marketing. This factor has led to a decline in consumption that is intimately linked with the phenomenon, growing deflation. Deflation, disease economic growth, which may not seem to be the same concerns that economic organizations reserve inflation, is one of the major reasons for the big slowdown in most developed economies. Fundamental component of deflation is just the wage stagnation plaguing the most industrialized countries. For example, with regard to countries like Spain, Greece, Ireland, Italy, Japan and the UK average wages are lower than those recorded in 2007; this figure significantly affects the values of average wage increases at a broader level, but always relative to the more developed economies, which recorded an increase of 0.1% in 2012 and a 0.2% in 2013. The area euro is strongly affected by this phenomenon and the effects on the global economy of what is one of the most important commercially impacted heavily on the global economy overall. The overall figure of wage growth is around 2%, while six years before the same level was 3%. Globally, the situation is far from uniform and records large disparities situations: Asia, driven by China and in general from Eastern countries recorded an increase of 6%, in Eastern Europe and Central Asia, the stars of a relocation production coming from European countries where the cost of labor is greater given the growth stood at 5.8% and the Middle East salaries rise by 3.8%; far the largest increases, but in other areas of the globe growth presents values very low: 0.8% more than in Latin America, while Africa recorded a modest increase of 0.9%. Growth was, therefore, those countries in developing who offered such a labor cheap, often used in processes that did not require great skills: this reason explains, at least in part, as, despite a slow but increasing convergence with wages in developed economies, the ratio of the value of wages is three to one in favor of the latter. Also workers in these economies enjoy greater legal protection and trade union, even if you register the increasingly frequent application of rules aimed at reducing these protections. One of the major causes of this decline in wage growth is the growing difference between labor productivity, more and more increased, and the distribution of wages; what registers is a significant discrepancy in favor of quotas allocated to capital, which are subtracted from their salaries. This scenario, very present in most developed economies, is favored by laws that penalize employment income by increasing taxation, unlike income and that focus on lowering indiscriminate labor costs, a legacy of liberalism return that grips Western democracies. These measures trigger perverse logic that allow investment capital shares subtracted to wages, in different countries, where the cost of labor is ridiculous and then producing the bleeding of jobs in the more mature economies. The consequence is that to be penalized are so domestic markets of these economies, the contraction of disposable income that prevents consumption and, closing the circle, generates deflation. If you do not want to consider the grounds of social equity, should be considered as economic reasons to study measures designed to promote greater economic equality, based on taxation and on the study and application of laws designed to favor the extension of employment supported by higher net wages, helped by lower taxes. Only this way can we achieve a more harmonious economic growth, without being tainted by anti economic inequalities evident, from which even the state coffers will clearly benefit.