If the election programmes are to be believed, the parties see the solution more in instituting minimum wages. That will not make it easier to find a new job. I remain sceptical about minimum wages. They are a very imprecise instrument for fighting poverty, for example, and they largely entail risks and problems for future employment trends.
We saw considerable strength in demand in the United States in the 1990s, when productivity accelerated, and we are beginning to see it in China, where rising demand for imports is eroding the country’s large trade surplus and boosting the economies of some of its trading partners. People experiencing much brighter economic prospects will want much more in the way of consumer goods.