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Text size [+][-]  Saturday March 20 2010GLOBAL EDITION

Considered view
11 Nov 2009 09:18

Wages of profligacy

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The US unemployment rate in October rose from 9.8% to 10.2%, the highest since 1983. 7.3m jobs have been lost since December 2007 compared with 2.1m in 2001-02, 1.7m in 1990-91, 2.0m in 1981-82 and 2.0m in 1974-75.

US non-farm labour productivity increased at a 9.5% annual rate in the third quarter of 2009 after a 6.9% annual rate of increase in the second quarter.

The US trade deficit in goods and services was $30.7bn in August, down $30.2bn from August 2008.

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Globalisation should lead to a convergence of US and emerging market labour costs. High US unemployment and stellar productivity growth suggest this may be occurring with painful speed. US wages are too high for the new reality. A less valuable greenback would push them down.

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More stories by:  Martin Hutchinson






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