They knew that minimum wage laws would hurt lower-skilled workers and the lower-skilled black South Africans who opposed the laws knew that wage competition and capital accumulation were the real paths to higher pay.
Wage rates and large capital expenditures are the primary driver of this.
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The mayor said paying the London Living Wage helps to boost the capital's economy.
When wage taxes are high and capital taxes are low, firms simply shift compensation from salaries to stock options and dividends, cutting revenue without boosting growth.
Both policies severely distort the market the former has contributed to slower wage growth, and the latter has drawn capital away from the business sector into the housing sector.
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Moreover, if the minimum wage cuts into profits, there will be less capital investment and job growth will slow.
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Sandeep Muthangi of Indian brokerage IIFL Capital says the draft provisions could increase wage costs for Indian companies by 12-15 percent and bring profit margins down by a full percentage point.
There is strong ideological resistance to the policies that make decent wages in a full employment economy feasible: capital controls, allowing strong trade unions, wage subsidies, and protectionism.
Compared to the estate tax provisions in current law, and after all economic adjustments, repeal of the estate tax would increase GDP by about 2.25 percent, private sector output and labor income (hours worked times hourly wage) by about 2.34 percent, and capital stock by 6.1 percent.
Moreover, most income from executive stock options is now reported as W-2 wage income, while before tax reform it was reported as capital gains when exercised.
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Individual income taxes as well as corporate taxes are now far more rooted in the shifting sands of volatile business income and capital profits rather than in the terra firma of wage income that stabilizes payroll taxes.
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"If you have 3% inflation rate, businesses will have to keep pace in terms of wage growth, " said Yuuki Sakurai, chief executive of Fukoku Capital Management.
The UN calculates a population's human capital based on its average years of schooling, the wage its workers can command and the number of years they can expect to work before they retire (or die).
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Lower capital investment in the U.S. means less wage growth, and so the people hurt most by this tax hike would be workers, according to a study by the Institute for Research on the Economics of Taxation.
If labor and other markets are allowed to function without government intervention, there will be a tendency toward market-clearing prices, including relative wage rates and interest rates that reflect time preferences and the productivity of capital.
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This is another thing not explained well in the campaign that taxes on capital reduce the potential capital to labor ratio, limit labor productivity gains, and thus limit wage gains.
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Mr Miliband suggested firms could offered tax relief on training or capital investment, or lower business rates, in return for paying the living wage.
And it questions whether Western incomes will remain flat: recent wage rises in America and pay claims in Europe and Japan may start to reverse the balance back away from capital.
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