Towards a high-wage, high-productivity economyLucile Crumpton, Ethan IlzetzkiMany commentators have understood the UK government’s proposed ‘high-wage, high-productivity’ model as suggesting that wage increases will themselves lead to innovation and higher productivity. However, many commentators have understood the government’s ‘high-wage, high-productivity’ model as suggesting that wage increases due to lower immigration and labour shortages will themselves lead to innovation and higher productivity. They cite evidence that wages lead to improved job performance, higher customer service quality, lower turnover rates, and higher quality of hires due to higher wages. This month’s Centre for Macroeconomics (CfM) survey asks the panel whether higher wages could lead to higher productivity. 21Wolfers, J and J Zilinsky (2015), “Higher Wages for Low-Income Workers Lead to Higher Productivity”, Peterson Institute for International Economics.

Source: The Times December 09, 2021 04:16 UTC