It’s our old friend Karl Marx who called the thing about the workers’ wages right. Full employment is indeed the workers’ best friend and now that we’ve got it we can see wages rising at their strongest rate for a decade, 3.1% year on year. We can also run this the other way around, if we’re seeing such strong wage growth then we’ve got to be pretty much at full employment.
We can also use this as an example of both classical and neoclassical economics being right.…
See MoreThere’s a standard piece of economics, so standard that even Karl Marx got it right, concerning the unemployment rate and wage growth. The lower that unemployment rate then the higher will be wage growth – the higher the unemployment rate then the lower wage growth. This has held since whenever and yet it seems not to right now. That’s something that needs to be explained of course.
A possible, possibly even a correct and possible, solution to the conundrum being immigration.…
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