The net social wage in different welfare regimes

Abstract

This article investigates empirically the net fiscal position of the working class in nine European countries for the 1995–2015 period. This is done through the estimation of the net social wage for wage and salary earners in those countries, characterized by different types of welfare states. The negative net social wage ratio in eight out of nine countries indicates that in advanced capitalism, the state budget redistributes income in such a way that the post-fiscal or true rate of exploitation is higher than the pre-fiscal or apparent one. Adverse economic conditions and ageing of the population have made the net social wage ratio less negative recently, while the accumulation of public debt and the increased obligations for interest payments on this public debt have acted in the opposite direction.

Introducing a Safety Net: The Effects of Neoliberal Policy on Welfare, Poverty, and the Net Social Wage during the Greek Crisis

“…Figure 5 depicts the variations of the net social wage ratio in Greece for a period that spans 2002 to 2017. Contrary to Maniatis and Passas (2019) results, these results offer quite a different picture that is consistent with my account of the ongoing transformation of the welfare state in Greece. Based on these calculations, the net social wage for the working class in Greece was negative for the years 2002 to 2009, when the crisis was typically initiated.…”

“…A cause of this difference may be due to the fact that in my calculations I have used the data for wage and payroll taxes published by the Ministry of Finance in Greece because the relevant data were not available in Eurostat. 11 Thus, in comparison to Maniatis and Passas (2019) calculations, the amount of labor taxes as presented here is particularly smaller.…”

“…Calculations are based on the methodology developed by Maniatis and Passas (2019), but the results presented herein differ in a significant way from theirs (figure 5). The working class is straightforwardly defined as the sum of salaried workers—either full-timers or part-timers—and the unemployed divided by the total labor force, which also includes the self-employed and all other types of employers and professionals.…”

“…Both Maniatis (2003, 2014) and Shaikh (2003) argue in favor of a differentiated methodology, showing that the role of the state on the distribution of income has tended to be negative. In the same spirit, Maniatis and Passas (2019) have paved the way for a radical analysis regarding the role of social welfare during the neoliberal phase of Greek capitalism that considers the net social wage for various EU countries. Herein, the net social wage approach is used to examine whether and to what extent the intervention of the state alters the distribution of income for the interests of the working class.…”

International Taxation and the Global Structure of Capitalism: The Influence of the OECD in the Design of the International Tax System

“…The net differences between the public spending received and the taxes paid constantly create new money holding positions. If we assume—even as a simplification—that capitalist society is divided into two large class categories, namely, capitalists and workers, we have that capitalists are the major beneficiaries of the effects that the taxes/public spending complex has on money endowments, even though there can be periods in which the workers’ position is enhanced with respect of the distribution generated by such complex (Maniatis and Passas 2019: 236 ff).…”