Economic ‘recovery’ leaves most citizens behind¹ – David Ruccio and Jamie Morgan

What we’re seeing then, especially in the U.S., is a self-reinforcing cycle of high profits, low wages, and then even higher profits. That’s why the labour share of business income has been falling during the so-called “recovery”: ² Eric Levitz in a July 2018 article in New York Magazine states that in the endthis is political, as “American policy- makers have chosen to design an economic system that leaves workers desperate and disempowered, for the sake of directing a higher share of economic growth to bosses and shareholders.”³

Productivity, automation, etc. on which economists focus are simply issues within that system. American workers (and workers in general) are being “ripped off”. Nowhere is this seen more clearly than in ratios of CEO-to-average-worker-pay. For further information, see our longer article 4.

 

 

References:

1. https://rwer.wordpress.com/2018/11/20/economic-growth-leaves-many-americans-behind/

2. https://anticap.files.wordpress.com/2018/07/fredgraph.png. The graph maps the precipitous decline in the labor share during the past decade (from 103.3 in the first quarter of 2008 to 97.1 in the first quarter of 2018, with 2009 equal to 100), but the trend is longer: from 114 in 1960 or 112 in 1970 or even 110.2 in 2001.
3. http://nymag.com/daily/intelligencer/2018/07/oecd-study-labor-conditions-confirms- that-u-s-workers-are-getting-ripped-off.html

4. http://www.paecon.net/PAEReview/issue85/RuccioMorgan85.pdf