The Political Economy of Income Stagnation: How Do Political Elites and Social Actors Make Sense of Falling Income Shares

Joshua Cova

Over the past years, the growth model perspective in comparative political economy has sought to introduce a greater focus on the way in which the drivers of economic growth differ across economies. However, as economic growth has become increasingly elusive for advanced capitalist democracies, policymakers and growth coalitions have scrambled to identify sustainable sources of long-term growth. Their efforts must nevertheless be positioned against the reality that incomes have been stagnant or, in real terms, even falling and that this fact has political consequences (e.g., greater support for populist parties, lower electoral turnout). The project will seek to examine how policymakers and social actors make sense of this phenomenon. First, it will leverage quantitative text analysis methods and regression techniques to examine the way in which policymakers discuss stagnating incomes through a comparative lens. Second, it will leverage new comparative, longitudinal administrative-level data that allows us to examine the extent to which different growth models have been subject to income stagnation. Third, it will examine the recent inflationary episode of 2021/22, which has contributed to a fall in real incomes, and the role that trade unions and collective bargaining institutions have played in mitigating real wage losses across different growth models.