The U.S. Net Social Wage in the 21St Century
DEPARTMENT OF ECONOMICS Working Paper Neoliberal Redistributive Policy: The U.S. Net Social Wage in the 21st Century by Katherine A. Moos Working Paper 2017-18 UNIVERSITY OF MASSACHUSETTS AMHERST Neoliberal Redistributive Policy: The U.S. Net Social Wage in the 21st Century Katherine A. Moos1 Assistant Professor of Economics, University of Massachusetts Amherst September 18, 2017 Abstract In this paper, I examine the trends of fiscal transfers between the state and workers during 1959 - 2012 to understand the net impact of redistributive policy in the United States. This paper presents original net social wage data from and analysis based on the replication and extension of Shaikh and Tonak (2002). The paper investigates the appearance of a post-2001 variation in the net social wage data. The positive net social wage in the 21st century is the result of a combination of factors including the growth of income support, healthcare inflation, neoliberal tax reforms, and macroeconomic instability. Growing economic inequality does not appear to alter the results of the net social wage methodology. JEL classification codes— H5 National Government Expenditures and Related Poli- cies, E62 Fiscal Policy, E64 Incomes Policy, B5 Current Heterodox Approaches Keywords— fiscal policy, net social wage, neoliberalism, social spending, taxation 1The author would like to thank Duncan Foley, Mark Setterfield, Anwar Shaikh, Jamee Moudud, Sanjay Ruparelia, and Noé M. Wiener for helpful feedback on earlier drafts of this paper. Any errors or omissions are my own. 1 1 Introduction The United States is not known for an unwavering commitment to redistributive social spending. Considered the prototypical liberal market welfare state, the United States is marked by its stingy contributory and means-tested social programs (Esping-Andersen 1990, 48).
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