It was not only wages and working conditions that had to be put under pressure. So too did the various services provided by the state (and in some case by private firms) that make up the "social wage": healthcare, pensions, education. During the long boom these had been, as we have seen in Chapter Seven, by and large, paid for out of the taxes on the working class, as is shown by figures by Anwar Shaikh for what he calls "the net social wage"-the difference between what workers pay in and what they get out (see Graph A below).28 But the impact of recurrent crises, rising unemployment and an ageing population had been to push welfare expenditures upwards (Table B), until even in the US the cost could no longer always be covered by the taxation on workers and therefore tended to hit capital. The figures show enormous unevenness between the degree to which different states-and firms operating in those states-were hit by both the overall level of the "net social wage" and the rise in the welfare expenditures in the 1970s and 1980s. They responded by a series of "reforms" (in reality counter-reforms) which, under the label of "modernisation", aimed at reversing this trend.
OECD Employment Outlook, 2007, p 11723
The Years of Delusion
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