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Wallstreet Journal Opion - Article Example

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Your editorial “Closing the Productivity and Pay Gap” (Politics and Ideas, Feb.19) addresses an invalid, but widespread, belief that wages should follow productivity gains in a particular firm or industry. Mr. Galston argues that industries have to share their productivity…
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Wallstreet Journal Opion

Download file to see previous pages... Mr. Galston refers to the BLS report but forgets to consider that the measures stated in the report do not measure the specific contribution of capital, labor, or any other factor of production but do reflect changes in technology, capital investment, managerial skills, effort of workforce, level of output and material. Moreover, he fails to explain role of workers to share losses and stresses of ownership in relation to sharing of productivity gains. Firms already share gains from increased productivity with their shareholders and for those workers who desire for the surplus value has to purchase the company’s stock.
The implementation and enforcement of a productivity-to-pay method would draw a number of implications such as diverse effects on capital investment and hiring, and avoidance of tax penalties by businesses. Furthermore, the challenge in our economy is neither shortage of capital nor weakness of demand but an environment full of regulations and laws that tend to discourage investment. Thus, the argument by Galston is not only erroneous but also impractical in any ...Download file to see next pagesRead More
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