by Summary:
Most stories told about this declining labor share of national income is about capital claiming it for themselves — and on the surface, that's essentially what is happening. A major surge in output in the 70s went disproportionately to capital instead of labor.However, let's take a step back and think about the cause of that surge in output: women entering the workforce (see links here or here). If that's the cause, then the difference in the shock to NGDP and to wages could be almost entirely accounted for by the fact that women make on the order of 70% as much as men for the same job. As women entered the workforce, the same output growth would go towards more income for capital by pocketing that extra 30%. A back of the envelope calculation shows it's the correct order of magnitude
Topics:
Mike Norman considers the following as important: capital share, discrimination, labor share
This could be interesting, too:
Most stories told about this declining labor share of national income is about capital claiming it for themselves — and on the surface, that's essentially what is happening. A major surge in output in the 70s went disproportionately to capital instead of labor.However, let's take a step back and think about the cause of that surge in output: women entering the workforce (see links here or here). If that's the cause, then the difference in the shock to NGDP and to wages could be almost entirely accounted for by the fact that women make on the order of 70% as much as men for the same job. As women entered the workforce, the same output growth would go towards more income for capital by pocketing that extra 30%. A back of the envelope calculation shows it's the correct order of magnitude
Topics:
Mike Norman considers the following as important: capital share, discrimination, labor share
This could be interesting, too:
Angry Bear writes The “Paid What You are Worth” Fairy Tale
Frances Coppola writes The true story of NI autocredits
Frances Coppola writes The true story of NI autocredits
Mike Norman writes Economic Policy Institute — Labor Day Series
Most stories told about this declining labor share of national income is about capital claiming it for themselves — and on the surface, that's essentially what is happening. A major surge in output in the 70s went disproportionately to capital instead of labor.Information Transfer Economics
However, let's take a step back and think about the cause of that surge in output: women entering the workforce (see links here or here). If that's the cause, then the difference in the shock to NGDP and to wages could be almost entirely accounted for by the fact that women make on the order of 70% as much as men for the same job. As women entered the workforce, the same output growth would go towards more income for capital by pocketing that extra 30%. A back of the envelope calculation shows it's the correct order of magnitude (about 5 percentage points). It's not declining unions or deregulation, but rather simply adding more people that are paid less because of sexism behind the decline in labor share of national income. At least that's the hypothesis.
Women in the workforce and labor share
Jason Smith