The Gilded Wage: Profit-Sharing Institutions and the Political Economy of Trade

Abstract

Scholars of international political economy often argue that workers automatically share the same trade policy preferences as their employers. However, this approach assumes that trade policies that increase profits necessarily lead to increases in wages. In contrast, I argue that capital and labor are more likely to share the same trade policy preference when "profit-sharing institutions" permit capital to credibly commit that an increase in profits will lead to an increase in wages. In support of my argument, I present a structured, focused comparison of the American textile and steel workers' unions during the late nineteenth century. Both unions supported the high tariffs that protected their industries when credible profit-sharing institutions were in place, but did not support high tariffs when such institutions were absent.

Power over Profits

“…86 Rather, understanding the creation of such cross-class coalitions requires closer attention to domestic labor markets and what I have elsewhere called "profit-sharing institutions." 87 Last, this article has implications for recent debates concerning income inequality. When workers' wages do not increase along with gains in worker productivity, profits increase at the expense of workers' incomes.…”

Conditions Influencing Salary of the Automotive Industry in Mexico City—A Linguistic Fuzzy-Set Approach

“…The first one, consisting of four items, deals with items on the employee's general information. The second section includes (a) freedom of association or right to bargain, (b) access to social or job security, and (c) development of intra-and inter-industry trade [34].…”

Historical International Political Economy

“…vi Dean (2016) has similarly highlighted key problems in these comparative historical accounts of US trade policy in the late nineteenth century. vii Moggridge's several books and Sayers's 3-volume history work through these questions.…”