By showing that the (inter-regional) pay structure of the United States is substantially more egalitarian than Europe, James K. Galbraith argues for a strategy of economic convergence and egalitarian growth in Europe. He explains why such a strategy, following the experience of the American New Deal, should work to reduce European unemployment. His proposals aim at developing middle-class jobs in the poorer countries of European periphery and include the European integration of welfare policy, the creation of a European Pension Fund, a negative income tax for low wage employees in the poor regions, with these policies being financed by a public deficit run at the European level.
Galbraith, James K.. 2006. Maastricht 2042 and the Fate of Europe. UTIP Working Paper No. 39. Austin: University of Texas Inequality Project.
Full text: utip.gov.utexas.edu/papers/utip_39.pdf