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The effect of reducing wages of remote workers on society. A preliminary assessment

Author

Listed:
  • Edoardo Beretta

    (Universita' della Svizzera italiana, Lugano, Switzerland)

  • Marco Desogus

    (University of Sassari, Italy)

  • Soorjith Illickal Karthikeyan

    (Indian Institute of Management Udaipur, Rajasthan, India)

Abstract

Remote work has represented 'the' alternative to office work during the COVID-19 pandemic as it has (while enabling employees to fulfill tasks from home) prevented or broken contagion chains. Though not a new approach to work, the recent emphasis on telework has come with pleas to reduce the wages of remote workers. By means of a logical-analytical approach, the article analyzes why such policies are not only unjustifiable in terms of keeping average wages at an at least stable level, but even more if the final sales prices would not shrink accordingly and would boost the share of corporate profits to GDP. Even cutting wages and final sales could be "deflationary" first and "recessionary" then (i.e., impoverish the economy). The article preliminarily analyzes the economic impact of such proposals on countries with a large ICT sector contributing to GDP (i.e., where remote work is facilitated due to the wide diffusion of tools such as Internet connections, computer devices, etc., enabling it) and an underperforming labor market in terms of female participation.

Suggested Citation

  • Edoardo Beretta & Marco Desogus & Soorjith Illickal Karthikeyan, 2023. "The effect of reducing wages of remote workers on society. A preliminary assessment," PSL Quarterly Review, Economia civile, vol. 76(307), pages 373-392.
    • Handle: RePEc:psl:pslqrr:2023:44
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    File URL: https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18063/17124
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    References listed on IDEAS

    as
    1. Agostina Brinatti & Alberto Cavallo & Javier Cravino & Andres Drenik, 2021. "The International Price of Remote Work," NBER Working Papers 29437, National Bureau of Economic Research, Inc.
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    3. Marianne Bertrand, 2018. "Coase Lecture – The Glass Ceiling," Economica, London School of Economics and Political Science, vol. 85(338), pages 205-231, April.
    4. Heejung Chung & Tanja Lippe, 2020. "Flexible Working, Work–Life Balance, and Gender Equality: Introduction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 151(2), pages 365-381, September.
    5. Silva-C, Alejandro & Montoya R, Iván A. & Valencia A, Jhoany A., 2019. "The attitude of managers toward telework, why is it so difficult to adopt it in organizations?," Technology in Society, Elsevier, vol. 59(C).
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    More about this item

    Keywords

    Average wages; COVID-19 pandemic; income inequality; remote work;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J8 - Labor and Demographic Economics - - Labor Standards

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