Tags: Govt | Slaughter | globalization | wages

Dartmouth's Slaughter: Govt Should Promote Globalization to Raise Wages

By    |   Wednesday, 22 January 2014 12:06 PM

Global-oriented companies pay the best compensation, and the government should promote policies needed for these companies to thrive, says Matthew Slaughter, a business school professor at Dartmouth College.

"Research has long documented that workers at globally engaged companies tend to earn more than workers at purely domestic companies," he writes in The Wall Street Journal.

"Exporters tend to pay about 15 percent more. Multinational companies, which not only export and import but also undertake international investment, tend to pay even more."

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The reason is that globalization goes hand in hand with innovation and productivity growth, says Slaughter, a member of President George W. Bush's Council of Economic Advisers.

But globally engaged companies have ceased growing in the United States as they did in the past, he says.

"The leaders of these companies continue to struggle against poor U.S. policies — substandard infrastructure, flawed immigration rules, failing schools and complex taxation — that erode their ability to profitably hire and invest here."

How should the government respond?

It should improve trade, investment, immigration and tax policies, Slaughter says. "Liberalize trade and investment through initiatives like the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership."

Pay increases have been disappointing for the work force as a whole recently. Private sector workers' hourly earnings have advanced only 2 percent a year on average since 2011, or hardly at all when adjusted for inflation, Bloomberg reports.

Paychecks are "probably going to be the last area of the labor market to see a pickup," Mike Feroli, chief U.S. economist at JPMorgan Chase, tells the news service.

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Global-oriented companies pay the best compensation, and the government should promote policies needed for these companies to thrive, says Matthew Slaughter, a business school professor at Dartmouth College.
Govt,Slaughter,globalization,wages
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2014-06-22
Wednesday, 22 January 2014 12:06 PM
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