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'Living’ Wage, Class Conflict and Ethnic Strife

Dasgupta, I.

Authors

I. Dasgupta



Abstract

We examine how group-specific differences in reservation wage, arising due to asymmetries in social entitlements, impact distribution via the joint determination of class conflict between workers and employers, and ‘ethnic’ conflict among workers. We model a two-dimensional contest, where two unions, representing different sections of workers, jointly but non-cooperatively invest resources against employers in enforcing an exogenously given rent, while also contesting one another. The rent arises from a ‘living’ wage, set above reservation wage rates via labour regulations. We show that high reservation wage workers gain, and employers lose, from better social entitlements for low reservation wage workers. The latter however benefit, with employers and against the former, from weak labour regulations. When minority/immigrant workers are marginalized both in the labour market and in non-wage entitlements, improving job access and expanding ‘social support’ has contradictory effects on class and ethnic conflicts. ‘Trade unionism’, i.e. political articulation of shared economic interests alone, appears insufficient to temper ethnic conflicts among workers.

Citation

Dasgupta, I. (2009). 'Living’ Wage, Class Conflict and Ethnic Strife. Journal of Economic Behavior and Organization, 72(2), 750-765. https://doi.org/10.1016/j.jebo.2009.07.009

Journal Article Type Article
Publication Date Nov 1, 2009
Deposit Date Nov 6, 2009
Journal Journal of Economic Behavior and Organization
Print ISSN 0167-2681
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 72
Issue 2
Pages 750-765
DOI https://doi.org/10.1016/j.jebo.2009.07.009
Keywords Class conflict, Ethnic conflict, Living wage, Labour regulation, Social entitlement, Affirmative action, Distribution.

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