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"In the popular imagination workers’ share of the economic pie has room to grow at the expense of profits. But recent research suggests that labour’s share of t
by rossdavidh 5y ago
"In the popular imagination workers’ share of the economic pie has room to grow at the expense of profits. But recent research suggests that labour’s share of the value created by firms has in fact been fairly stable in most rich countries during recent decades."
My guess is, part of the problem is how much of the economy is in the different sectors. Certain sectors (finance, software) have rather few employees relative to revenue, and they are (by definition) not the ones where most people are working. So, perhaps agricultural and industrial employers don't have much room to raise wages, AND too big a slice of the pie is going to employers, because it's not the same companies. The employers with lots of employees perhaps cannot raise wages much, while the employers with the room to pay more aren't employing many people.
So, the solution? Uh, hmmmm...lemme get back to you on that.
- coralreef 5y agoGonna be controversial but one idea is the universal basic income, financed in part by capturing the value from the means of production (capital owners, technology creators) as they replace labour with machines.
- rossdavidh 5y agoWell, I'm not sure UBI really solves the issue. Also, replacing labour with machines is not really the problem here; agriculture and industry still require lots of people, it's just that those sectors aren't the ones making the profits. The profits are going to software and finance, but we still need the agriculture and industry to run, and they still need lots of people.
- coralreef 5y agoDrones, automated harvesting, self driving trucks, software etc. will make their way into those industries eventually. If wage growth isn't coming organically for whatever reason, then some form of wage subsidy will need to occur. Or, you just have large swaths of lower middle class people in a growing state of contempt for the city dwelling elites.
- cscurmudgeon 5y ago> Drones, automated harvesting, self driving trucks, software etc. will make their way into those industries eventually. We can't sit around starving till then while paying people to do no work. Well-intention but top down policies meeting agriculture has almost always resulted in mass starvation. https://en.wikipedia.org/wiki/Great_Chinese_Famine https://en.wikipedia.org/wiki/Great_Chinese_Famine https://en.wikipedia.org/wiki/Soviet_famine_of_1932–1933 https://en.wikipedia.org/wiki/Soviet_famine_of_1932–1933 https://en.wikipedia.org/wiki/North_Korean_famine https://en.wikipedia.org/wiki/North_Korean_famine https://en.wikipedia.org/wiki/Shortages_in_Venezuela https://en.wikipedia.org/wiki/Shortages_in_Venezuela
- germinalphrase 5y agoOur agriculture industry is heavily subsidized throughout by “top down policies”.
- cscurmudgeon 5y agoSubsidies are very different from micromanagement. Also, the US is not even the top country when it comes to agri subsidies. https://www.hinrichfoundation.com/research/article/protectionism/agricultural-subsidies/ https://www.hinrichfoundation.com/research/article/protectio...
- antifa 5y ago"Only communists try to solve problems" is not a good argument.
- cscurmudgeon 5y agoYes, and that was not my argument. The argument was "only communists try to solve OTHER people's problems for them and end up creating more problems for OTHER people than they started with"
- 5y ago
- onlyrealcuzzo 5y ago> it's just that those sectors aren't the ones making the profits. Coincidentally - they're also the most competitive / not monopolies.
- thereare5lights 5y ago> Well, I'm not sure UBI really solves the issue. You can't just say that and then not say why you think that.
- mensetmanusman 5y agoAll of those technologies had extremely low investment due to the competition with an oft-abused migrant worker class sacrificing for their families. This was short term thinking because the human race would have been better off with more investment here.
- throwaway6734 5y agoAgree. We already essentially do this with social security.
- fennecfoxen 5y ago"Capturing the value from the means of production" unfortunately but unsurprisingly leads to chronic under-investment in the means of production, as those who would otherwise invest in capital are uninterested in seeing its value captured. This road leads to poverty, not prosperity (and more inflation as more money chases fewer goods produced in fewer factories by fewer workers).
- danaris 5y agoCry me a river for the people who will be making only 300 million dollars a year in net profit, rather than 500 million. This is the kind of thinking that has gotten us into this hole: "We have to do everything we can to appease the wealthiest, or they'll stop gracing us with jobs!"
- fennecfoxen 5y agoAh yes, this would be the “supply side doesn’t even exist” economics of 21st century meme politics.
- SantalBlush 5y agoMeme politics is pretending that only a binary exists between laissez-faire and communism.
- aeternum 5y agoThe sad part is most of the presidential candidates seem be trying their hardest to turn that pretend into reality.
- coralreef 5y agoI don't buy this. Trickle down economics is bullshit. Investment happens anywhere there is a chance of positive return. Investing in new technology either as an inventor/entrepreneur or dumb money still offers returns exponentially higher than anything else, should it work out. There is a point where excessive taxation/regulation hurts innovation, but I don't think we're anywhere near that.
- ZoomerCretin 5y agoIf there is not enough profit within a sector to pay for necessary wage increases, the money can come from increased prices. This allows money to be redistributed from rich sectors to poorer sectors.
- newacct583 5y ago> So, the solution? Uh, hmmmm...lemme get back to you on that. Tax the excess from the wealthy industries and redistribute via whatever reasonably fair set of programs you happen to like. I know, I know, communism, yada yada. But that's the solution, and it's trivially proven to work. Basically every economy (including the USA) does this in a zillion ways already. It's just that "finance and software" haven't been among the victims so far so it seems like a disruption. The point here isn't to provoke an argument about SoCIaLisM or whatever, just to point out that your feigned ignorance of working solutions isn't correct. We know how to fix this.
- brigandish 5y ago> I know, I know, communism, yada yada. But that's the solution, and it's trivially proven to work work is doing a lot of, erm, work in that sentence. If it means "impoverish and oppress" then you're right. Otherwise, I can't for the life of me think of a single example where it has "worked".
- imtringued 5y ago> Otherwise, I can't for the life of me think of a single example where it has "worked". Because you didn't live during those times. They are what resolved the great depression. They have been abolished since the 70s which means they haven't been done for the last 50 years. Why else do you think has the economy been stagnant for 20 years?
- brigandish 5y ago> Because you didn't live during those times. History is recorded in increasing detail over time. By the 1930s there was a lot of recording being done and a lot of it is still extant. Communism did not resolve the Great Depression anywhere, let alone the United States, and if you're wondering why communism has had such a bad rap since the 70s, I can give numerous examples for that. I have to wonder why you don't know, for example, about the killing fields of Cambodia.
- handrous 5y ago> So, the solution? Uh, hmmmm...lemme get back to you on that. Third decree: no more... rich people... and poor people From now on, we will all be the same... ummm, I dunno I gotta think about that... — Tenacious D, "City Hall"
- vannevar 5y ago>In the popular imagination workers’ share of the economic pie has room to grow at the expense of profits. But recent research suggests that labour’s share of the value created by firms has in fact been fairly stable in most rich countries during recent decades. It's unfortunate they didn't include any references for this claim, which seems pretty bold in the face of voluminous evidence that income inequality has increased dramatically in those same "recent decades". (See e.g., https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/ https://www.pewresearch.org/social-trends/2020/01/09/trends-..., https://ourworldindata.org/income-inequality https://ourworldindata.org/income-inequality, https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality https://www.cbpp.org/research/poverty-and-inequality/a-guide..., etc.) The only way I can see to conclude that labor's share of value created has remained anywhere near stable is to either lump executives in with labor, or exclude passive income from the definition of value created.
- outsidetheparty 5y agoLabor's share has been stable because it's been kept artificially low while capital profits soared. "Stable" is a misdirect here.
- jaxn 5y agoIf your income is from working a job, then it can only go up via a raise, a different job, or an additional job. But you can only reasonably work 2-3 jobs. The gains are linear and do not compound. If the income comes from investments,we'll, there are no limits. Each increase compounds. So yeah, the rich get richer. The system is broken, but it is working as designed.
- dcolkitt 5y agoYou’re comparing apples to oranges. Inequality is not the same as labor vs. capital. There are many rich laborers (surgeons, investment bankers, software engineers) and there are many poor capital holders (pensioners, widows, orphans). Inequality has primarily increased because the wages of high earners has pulled away from median wages. Returns to capital have if anything declined, in contrast. And no, these high earners are not all or even majority executives. CEOs of public companies only make a very small fraction of wage earners in the top one percent. Far more common are physicians, attorneys, tech workers, financial managers, and other professionals. Nor is it an issue that these are high earning workers are “not paying their fair share”. Almost all of their income is taxed as ordinary income at high marginal rates. Many live in high tax states like California or New Jersey and are paying well over 50% marginal rates. Once you account for post tax-and-transfer income, inequality in the United States has not increased at all in the past 50 years.
- rafale 5y agoThe Unabomber suggested a solution... I'll show myself the door now. (joking btw)
- forgotmyoldname 5y agoSeems like we're reverting to an old class divide. Aristocrats who get paid for having money, and peasants working the fields and told there's no money with which to pay them. People might end up finding a solution by looking at history. France in the late 1700s and Russia in the early 1900s might end up being a reference point for some country in the mid 2000s.
- adventured 5y agoExcept today's supposed peasants (the bottom 50% of labor? who do you mean exactly?) have absolutely nothing in common with the peasants you're referencing. To claim otherwise is something far beyond hyperbolic. The closest thing to peasants today do zero work in fact. That's how much your scenario is fraudulent. Hilariously fraudulent. They do nothing. They're the forever welfare classes in the US and Europe. People that go half their lifetimes or more and don't bother to work, just because they don't want to. For $15 / hr they can't be bothered to scan bar codes at CVS or Target in zero skill entry level jobs, it's just not a high enough wage. They can't be bothered. Oh those poor peasants doing absolutely nothing in the fields, getting free healthcare (bottom ~28% in the US today), free food, and housing subsidies - all paid for by the top 50% that actually do work and cover all the taxes, and primarily paid for by the top 25% that pay more than their fair share of taxes vs the income they take home.
- forgotmyoldname 5y agoI think you're responding to the wrong post. I said none of whatever you're aimlessly rambling about.
- nicoffeine 5y agoSpoken like someone who doesn't have a fucking clue about being poor. Educate yourself. "Target Workers Unite recently released a survey of more than 500 Target workers around the US, representing 382 different stores in 44 states. Only 12.7% of the workers who responded said they could survive on the wages from Target alone, with 56% of workers citing they have ran out of food while employed at Target, and 12.8% of workers reported experiencing homelessness." https://www.theguardian.com/business/2020/feb/27/target-cuts-hours-leaves-workers-struggling https://www.theguardian.com/business/2020/feb/27/target-cuts... "In most countries in the Western world, it’s assumed governments will one way or another make sure basic facilities like clean running water, sewage, and sanitation are available,” said Philip Alston, the United Nations Special Rapporteur on extreme poverty and human rights, who in 2017, traveled to Lowndes County for a report on U.S. poverty. “What was striking to me in Alabama was the extent to which there’s no sense that a government should be working towards providing basic infrastructure,” Alston said. “If you happen to live in one of the big cities, you will get access, but if you don’t — and particularly if you live in one of the poor counties like Lowndes — there isn’t any obligation and there are no plans in place.” https://www.montgomeryadvertiser.com/story/news/local/alabama/2018/07/06/story-first-series-ways-communities-addressing-rise-poverty-related-tropical-diseases-poor-sewage/754311002/ https://www.montgomeryadvertiser.com/story/news/local/alabam... "Stan Brock, who founded RAM in 1985 to fly American doctors and dentists to treat people in some of the world’s poorest and most remote areas, told me during an interview under one of the many M.A.S.H.-like tents on the fairgrounds site that the urgent need for dental care is not specific to Wise. Regardless of the location of RAM’s U.S. clinics—most of the organization’s expeditions are now held on U.S. soil because of this country’s large and growing number of uninsured and underinsured people—60 percent or more come first and foremost for dental care." https://tarbell.org/2018/08/people-travel-hundreds-of-miles-for-free-medical-care-in-appalachia-but-there-are-never-enough-doctors-to-meet-the-need/ https://tarbell.org/2018/08/people-travel-hundreds-of-miles-...
- imtringued 5y ago>So, the solution? Uh, hmmmm...lemme get back to you on that. There are three. Either you do the usual: income sharing (welfare and progressive taxation). You do the next best thing: Let people spend all their money and if they don't do it themselves, let the government borrow money to do it. Or you do the best thing that is impossible to implement: Work sharing. Make people work exactly as much as they demand work for themselves. You're a billionaire and have too much money? Easy, let someone else who wants to become a billionaire do the job and become a billionaire too.