Two articles in today’s Guardian offer very different visions of how to respond to the current economic crisis. Unctad has issued a report warning that the widening pay gap, combined with workers’ anxieties about the future, are making it more difficult to get out of the slump:
Economists and politicians have become increasingly concerned about the impact of widening income inequality on an economy’s growth prospects. The share of GDP taken home by workers in wages has declined across developed economies: in Britain, from 70% in 1970 to less than 63% in 2010; and in the US, from 65.3% in 1970 to 59% in 2010.
By contrast, Liam Fox is calling for tax breaks funded by welfare cuts. He also wants further deregulation.
“We should simply throw down the gauntlet and say that we are cutting our taxes, we are making Britain more competitive, we are going to reform our labour laws, make hiring and firing easier and do what we know works because it’s worked before,” he said.
At the end of the article he is quoted claiming that such steps have to be taken to secure re-election. But I’m not sure hitting people’s benefits and rights at work, while further rewarding the rich, is going to go down too well with undecided voters.
The TUC is organizing a march against austerity on 20 October.
