A ‘lost decade’ for pay may be a taste of things to come

• ? The failure of pay growth to respond to falling unemployment is less of a puzzle when allowance is made for structural changes in the jobs market. But the same developments make it hard to see where a pay revival will come from.
• ? In real terms, the average weekly wage in the UK is below the level of 10 years ago, an unprecedentedly poor performance. This is despite joblessness dropping to a 42‐year low and employment at a record high.
• ? The responsiveness of pay to falling unemployment has dwindled. A shift towards less secure forms of employment, the tightening up of eligibility for benefits and the consequences of globalisation have all made workers more compliant and less willing and able to push for higher wages.
• ? The result has been a decline in the ‘equilibrium’ rate of unemployment. The Bank of England currently judges this rate to be around 4.5%. But that earnings growth is so subdued despite unemployment being in line the Bank's estimate suggests that the sustainable rate of joblessness may well be much lower.
• ? With unemployment forecast to plateau at current levels, the odds of a revival in pay growth look slim, despite possible upsides from strong corporate profitability and rises in the National Living Wage. This would not be a new development – a secular decline in earnings growth has been apparent over the last 30 years in both nominal and real terms, with pay growth in successive periods of economic expansion failing to return to pre‐recession norms.
• ? This suggests that a serious revival in pay growth is unlikely to happen without the economy operating at significantly higher pressure and with a substantially lower unemployment rate. But this would require a recognition of, and a more accommodative policy response to, the historically weak economic expansion since the financial crisis. Neither seems likely.

     

Emerging Markets Kablooie risk — likelihood and impact

The evidence for asset booms in larger emerging markets is camouflaged by the negative price impact of the sustained economic slowdown. Risk compression is far more conspicuous in smaller and lower‐rated EM sovereigns, where economic disappointment has not set in to the same degree. Typically, the riskier the sovereign, the stronger the rally, and reversals in recent weeks barely chip away at the gains of recent years. We therefore pitch our tent in “Camp Nervous”. We attach a 10% probability of major outflows from EM, and 25% to a lesser but still painful downturn. We illustrate the results from a scenario of EM capital outflows run on our global macroeconomic model. All eyes on the Fed: and the risk that that one of the most anticipated tightenings in the history of central banking still manages to throw up some big surprises.     

A Look at the ‘Hidden Side’: Turkish Women in Berlin’s Ethnic Labour Market

Recent studies show that ethnic economies are an increasingly vital part of the larger national economy. This is especially true in the case of the Turkish ethnic economy in Germany. This article sheds light on a ‘hidden aspect’ of Berlin’s Turkish ethnic economy: the structure and role of Turkish female labour and female self-employment. It begins with a general discussion on the significance of the gender concept in the international debate on ethnic economies – including findings on minority and immigrant women in self-employment in Europe. The second section of the article focuses on Berlin, using an analysis of the official labour market data at hand to sketch the gendered structure of Berlin’s labour market. The third section presents exploratory empirical data concentrating exclusively on female Turkish entrepreneurs and employees. The results indicate that some of the gendered traits of the ethnic economies described in the international literature also appear in the Berlin survey: the under-representation of women as entrepreneurs and their difficult position in the overall labour market. Furthermore, the data suggest that the concept of ‘ethnic business’ as typically presented in the literature turns out to be a ‘male’ concept and is hardly applicable to the case of the Turkish women in Berlin. The common features of the concept (ethnic clientele, suppliers, labour or involved kin, orientation towards the ethnic community) applied only partially to the Turkish women entrepreneurs. — Des études récentes ont démontré que les économies ethniques sont une partie de plus en plus vitale de l’économie nationale. Ceci est particulièrement vrai dans le cas de l’économie ethnique turque en Allemagne. Cet article explore un ‘aspect caché’ de l’économie ethnique turque à Berlin: la structure et le rôle de la main d’oeuvre féminine turque et des femmes travailleuses indépendantes turques. Il commence par une discussion générale sur la signification du concept du genre dans le débat international sur les économies ethniques – y compris les données concernant les travailleuses indépendantes immigrantes et de minorité ethnique en Europe. La seconde partie de l’article est consacrée à Berlin, et donne un aperçu de la structure du marché du travail de Berlin par rapport au genre grâce à une analyse des données disponibles du travail officiel. La troisième section présente des données empiriques exploratoires concernant les employées et les femmes entrepreneurs turques exclusivement. Les résultats indiquent que certains des traits de genre des économies ethniques décrits dans les bibliographies internationales se retrouvent dans l’enquête sur Berlin: la sous-représentation des femmes entrepreneurs et leur position difficile dans le marché du travail dans son ensemble. De plus, les données suggèrent que le concept de ‘commerce ethnique’, comme il est habituellement présenté dans les travaux sur ce sujet, est un concept ‘masculin’ et qui ne peut guère ? tre appliqué au cas des femmes turques de Berlin. Les points communs du concept (la clientèle ethnique, les fournisseurs ethniques, la place de la famille ou des employés ethniques, une orientation vers la communauté ethnique) ne s’appliquent que partiellement aux femmes entrepreneurs turques.