Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129129
Authors: 
Tanguiane, Andranick S.
Year of Publication: 
2016
Series/Report no.: 
Working Paper Series in Economics, Karlsruher Institut für Technologie (KIT) 86
Abstract: 
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.
Subjects: 
inequality
productivity
hourly earnings
consumer prices
housing prices
labor-labor exchange rate
JEL: 
D31
D63
E31
E64
J24
J3
O47
Document Type: 
Working Paper

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