| Austerity causes wage repression in the following ways: * Cuts in benefits make people more reliant upon income from their jobs and give them less leverage. * Cuts to the public sector workforce increases the supply of labor. When the supply of available labor goes up, wages come down. * Cuts to public sector wages reduces competition from the public sector, so wages in the private sector come down too. The strongest effect of this can be seen today in Greece where wages fell ~20%. In Weimar, Bruning actually also issued a direct order to suppress wages (which I'm surprised the authors didn't mention). This did not go down well. People who have suffered from wage repression tend to look for somebody to blame. Extreme nationalism provides targets for that blame. And, the Nazis did end austerity and wages went up again, and of course they provided a scapegoat. Weimar also violently crushed the left wing opposition (the KPD), so people were left with "centrists" vs. "the (Nazi) alternative" and of course a lot of the people who wanted "an alternative" supported the alternative that was available to them, just because it was there. |