Austerity failed to deliver promised wage declines and deficit cuts in the REBLLs.

Evidence

Private-sector wage cuts did not happen on the scale needed to allow the increase in cost competitiveness that the deflation engineered to be effective. Unit labor costs were downwardly sticky during austerity programs despite massive public-sector cuts. This means only wage increases in Western Europe would make REBLL relative wages fall to more competitive levels, and that is hardly likely to happen in Western Europe in the middle of an austerity-induced double-dip recession. Similarly, REBLL austerity packages did not cut budget deficits as abruptly as the theory said they should. Latvia, Lithuania, and Romania ran much higher budget deficits at the peak of their austerity programs in 2009−2010 than did either Greece or Spain. — Mark Blyth, Austerity, 607

Categorization

• XREF: Directly extends the book’s earlier critique chapters; connects to Mattei’s broader austerity literature on the failed internal-devaluation logic. — connects to: Austerity became self-defeating because it worsened the deficits it claimed to fix — Mark Blyth, Austerity: The History of a Dangerous…, 516; Repeated austerity in Europe is failing despite being tried again and again. — Mark Blyth, Austerity: The History of a Dangerous…, 262; Austerity logic ignores that growth, not cuts, may resolve debt — Mark Blyth, Austerity: The History of a Dangerous…, 53 (+2 more)
• QUESTION: Why were unit labor costs downwardly sticky in the Baltic states specifically — was it minimum wages, union density, or sectoral structure?

Broader Connections

• REBLL recoveries disprove expansionary austerity and left states deeper in debt #corroborates (0.92) — Mark Blyth, Austerity, 612
• Austerity became self-defeating because it worsened the deficits it claimed to fix #corroborates (0.84) — Mark Blyth, Austerity, 516
• Repeated austerity in Europe is failing despite being tried again and again. #corroborates (0.78) — Mark Blyth, Austerity, 262
• Austerity logic ignores that growth, not cuts, may resolve debt #expands (0.75) — Mark Blyth, Austerity, 53
• Austerity’s success cases are few and possibly wrong while its failures are demonstrable #corroborates (0.72) — Mark Blyth, Austerity, 479