The High Road and the Low Road to International Competitiveness

Abstract

Is there an alternative to wage- and benefit-cutting in the face of the heightened competitive pressure created by globalization? This paper explores the possibility that even in a more globalized economy, there may be alternative paths to successful performance in the international economy--a “low road” that emphasizes cost-cutting, conflictual labor relations and a narrow set of social programs, and a “high road” that requires rapid productivity growth and innovation based on cooperative labor relations and generally stronger and more centralized labor unions, high quality production and higher wages, as well as greater state-supported social protection