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The difference between the median and the average strikes again! The popular comparison is that median real wages have only risen slightly from the 70s while av
by ls612 7y ago
The difference between the median and the average strikes again! The popular comparison is that median real wages have only risen slightly from the 70s while average productivity (because by definition the labor productivity numbers are averages) has risen substantially. But much of that is due to the increases in productivity from high productivity individuals, say maybe those whose job it is to tell fancy electronic machines how to do low skill repetitive tasks. Some of those people might even browse this forum!
There is actually fairly weak data to support the popular theory of a decreasing labor share of income (and thus an increasing capital share) causing more inequality and to the extent such an effect could exist its size is only a few percent of GDP over the past few decades.
- pmiller2 7y agoHow does median vs mean matter here? Maybe only 50% of people are completely fucked? Big deal; I know the CEOs and software engineers are doing fine.
- ls612 7y agoBecause high skilled workers have seen both their productivity and income rise substantially. The median and other lower skilled workers have not. This will lead to an increasing average but a stagnant median, but it doesn’t mean that the idea people are mostly paid based on productivity is wrong.
- pmiller2 7y agoI never claimed that. I claimed that workers generally are no longer reaping the benefits of increased productivity. If you want to offer income inequality as an explanation, then I'd be interested to hear how you work that all out, and if the math adds up. But, my contention that all the gains from increased productivity are going to those at the top seems to be exactly what you are espousing, yes? Are you agreeing with me in different words, or am I misunderstanding?
- imtringued 7y agoIt doesn't matter if you compare incompatible measures. As long as past values are better than present values we are on a downwards trend.