Technical change, globalisation and the labour market: British and American experience since 1620

This study is part of the [Institute for Fiscal Studies] IFS Deaton Review of Inequalities, chaired by Angus Deaton, which aims to assemble the evidence on the causes and consequences of different forms of inequalities in the UK and the ways that they can best be reduced or mitigated. There will be two phases of work: commissioned studies and commentaries on a large number of key themes; the development of comprehensive and practical policy guidance. The UK economy is not performing well. GDP is growing slowly. Labour productivity lags behind most of western Europe. Inequality is also...  [+] Show more

This study is part of the [Institute for Fiscal Studies] IFS Deaton Review of Inequalities, chaired by Angus Deaton, which aims to assemble the evidence on the causes and consequences of different forms of inequalities in the UK and the ways that they can best be reduced or mitigated. There will be two phases of work: commissioned studies and commentaries on a large number of key themes; the development of comprehensive and practical policy guidance.

The UK economy is not performing well. GDP is growing slowly. Labour productivity lags behind most of western Europe. Inequality is also rising, real wages have been growing less rapidly than output per worker, and labour's share of the national income has dropped substantially. In addition, regional inequality has become extreme. Only London performs well in a European context, while most of the country has sunk to central European levels of income and performance. How has the country that pioneered the first Industrial Revolution come to such a pass? This report addresses that question by tracing the history of wages, technology and globalisation over the past four centuries. Today is not the first time that inequality has increased and become a great social problem. The Industrial Revolution is another example. Other periods have witnessed more favourable outcomes.

Edited excerpts from publisher's website.