About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

127 Int'l Lab. Rev. 1 (1988)
Would Revenue-Sharing Pay Cure Unemployment

handle is hein.journals/intlr127 and id is 15 raw text is: International Labour Review, Vol. 127, 1988, No. 1 Would revenue-sharing pay cure unemployment? Guy STANDING * W hen an idea suddenly takes hold of the popular imagination, it is well to examine its roots and ponder its probable effects. Recently, profit- sharing or revenue-sharing - giving workers part of their earnings in the form of a share in profits - has been widely advocated by economists, politicians, journalists and others, not on social or equity grounds but as a means of guaranteeing full employment and price stability. The economist who has pressed this claim most forcefully, M. L. Weitzman, has been hailed as a prophet, and his book on the subject has been described as the most important contribution to economics since Keynes's General theory. In it he affirmed that revenue-sharing would vaccinate capitalism against stagfla- tion.I With fixed wages, he argued, fluctuations in aggregate demand have been translated into changes in the level of employment, and have thus led to high unemployment in times of recession, whereas, if earnings were tied to profit levels, exogenous shocks would produce fluctuations in wages and prices, but not in employment. If this thesis were true, it would have enormous practical implications. Many influential people have accepted it, and in several countries legislation and tax incentives have been introduced to encourage a shift from fixed wage to revenue-sharing pay systems - a shift that is already under way in such countries as France, the United Kingdom, the United States and even in Sweden. It is against that background that the present article sets out to consider briefly the theoretical links between profit-sharing and unemploy- ment, identifying the assumptions and implications of what is becoming part of the supply-side approach to economic policy, and to examine the relevance and conclusions of available empirical research. The macro-economic claims The belief that profit-sharing might have beneficial effects on employ- ment at the macro-economic level is far from new, and was formally * International Labour Office. Copyright (P International Labour Organisation 1988

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most