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The question though is why shouldn't those workers receive a larger share of their own productivity gains? As we work harder, we should receive more. But since

by Lendal 6y ago

The question though is why shouldn't those workers receive a larger share of their own productivity gains? As we work harder, we should receive more. But since the mid-1970's workers have received only a fraction of their own productivity gains. Most of that value is being sucked upward. It wasn't always this way.

dcolkitt 6y ago
Average worker compensation has nearly doubled in the past 20 years.[1] Almost exactly in line with aggregate productivity levels.[2] What I'm guessing you're referring to is median household income. Which is a quite different number than mean worker income. The former has stagnated relative to the latter primarily because a massive number of prime-aged workers, in particular young men, have dropped out of the labor pool.[3] Why that's happened is an entire question all on its own. But one thing is clear, the reason for it certainly can't be big businesses exploiting labor, because by definition the unemployed aren't working for anybody at all. [1] https://www.statista.com/statistics/243846/total-compensation-per-employee-in-the-us/ https://www.statista.com/statistics/243846/total-compensatio... [2] https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-productivity-slowdown-since-the-great-recession.htm https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-pro... [3] https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-participation-what-has-happened-since-the-peak.pdf https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-pa...
- alisonkisk 6y ago
  Adjusted for inflation, income growth is 0. Capital is capturing all the productivity gains. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
  - dcolkitt 6y ago
    The link you're citing is citing median wages. Productivity is measured in terms of mean output. You're comparing apples to oranges. Mean wages have closely tracked productivity metrics. Median wages have fallen relative to mean wages. That strongly implies that the issue isn't decoupling between wages and productivity, but faster growth in the output of high-skilled workers relative to low-skilled workers. This is confirmed by the empirical research[1], which shows that 61% of the divergence between median wages and productivity has come from income inequality between workers. Only 25% has come from rising corporate profits. [1]https://www.epi.org/publication/ib330-productivity-vs-compensation/ https://www.epi.org/publication/ib330-productivity-vs-compen...

by Lendal 6y ago

dcolkitt 6y ago

Average worker compensation has nearly doubled in the past 20 years.[1] Almost exactly in line with aggregate productivity levels.[2] What I'm guessing you're referring to is median household income. Which is a quite different number than mean worker income. The former has stagnated relative to the latter primarily because a massive number of prime-aged workers, in particular young men, have dropped out of the labor pool.[3] Why that's happened is an entire question all on its own. But one thing is clear, the reason for it certainly can't be big businesses exploiting labor, because by definition the unemployed aren't working for anybody at all. [1] https://www.statista.com/statistics/243846/total-compensation-per-employee-in-the-us/ https://www.statista.com/statistics/243846/total-compensatio... [2] https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-productivity-slowdown-since-the-great-recession.htm https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-pro... [3] https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-participation-what-has-happened-since-the-peak.pdf https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-pa...

alisonkisk 6y ago
Adjusted for inflation, income growth is 0. Capital is capturing all the productivity gains. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
- dcolkitt 6y ago
  The link you're citing is citing median wages. Productivity is measured in terms of mean output. You're comparing apples to oranges. Mean wages have closely tracked productivity metrics. Median wages have fallen relative to mean wages. That strongly implies that the issue isn't decoupling between wages and productivity, but faster growth in the output of high-skilled workers relative to low-skilled workers. This is confirmed by the empirical research[1], which shows that 61% of the divergence between median wages and productivity has come from income inequality between workers. Only 25% has come from rising corporate profits. [1]https://www.epi.org/publication/ib330-productivity-vs-compensation/ https://www.epi.org/publication/ib330-productivity-vs-compen...