10/12/98 A LARGE WAGE GAP IS A FUNCTION OF LIBERALISM (int'l edition)

A LARGE WAGE GAP IS A FUNCTION OF LIBERALISM (int'l edition)

The level of credit Aaron Bernstein grants to James K. Galbraith's book Created Unequal: The Crisis of American Pay is surprising (''Can government narrow the wage gap?'' Books, Sept. 14). Assertions like ''chronic high unemployment rates'' being ''a fundamental underlying cause'' for the increasing wage gap in the U.S. are difficult to sustain, certainly as seen from a global perspective.
Even focused on low-skilled workers and considering the recessions faced during the past 30 years, the U.S. has always been among the countries with the lowest unemployment rates. It is true that, even in a sustained growth conjuncture, a shortage in domestic low wage workers is unlikely to happen. Availability of job seekers and acceleration of technological progress and globalization will indeed leave the have-nots with almost no real wage benefit from the economic leverage.
The wage-gap size is very much dependent on the level of liberalism of government policy. Countries with ultraliberal track records (like Britain) traditionally have a large wage gap. Is this fair or not? It is at least part of the price of keeping unemployment as low as possible. The careful way Tony Blair deploys his Labour policy shows clearly that he wants to continue to cherish entrepreneurs, rather than push up low wages. Blair will stick to some of the proven Tory recipes, even if they are irritating to more orthodox socialist countries in Europe.
The large wage-gap problem is one of the drawbacks of ultraliberal economies. Asking Washington to tackle the problem by acting on unemployment sounds somewhat inappropriate, the more so as it just hit low levels.

Pierre Becquart
Waterloo, Belgium