> There is a fall in wages relative to profits in the OECD countries. But
> wages command a greater mass of commodities, because these are produced
> more cheaply. To say that living standards have stagnated in the OECD
> countries is just not true. In life expectancy, longevity, quality of
> life and so on, it is unavoidably the case that my generation have lived
> better than my parents'.
>From Doug's stat section on his LBO website, I read this about the US:
Note that the decline in real earnings - which ran with little interruption from 1973 through 1995 - was unprecedented in U.S. history. Over the two years, growth in real earnings per hour has been positive, and growing stronger - until recently. This has pushed the decade's average into positive territory, undoing the sluggishness of the early 1990s. We'll see if this upturn is sustained...
It's possible also that the real wage upturn is an artifact of adjustments made to the consumer price index by the Bureau of Labor Statistics to accommodate those who've argued that the index overstated inflation. If the index wasn't overstating inflation, then probably the actual real wage gain is from 0.7-1.0 percentage points lower than the chart inset shows. ________________________________________ Of course I think that the real earnings gains have resulted mostly from massive and exceptional capital inflows that has given rise to unsustainable contradictions in the form of trade deficits, unreal equity inflation, debt taken out on those portfolios, a top down consumption boom as a result that would have caused supply side problems if not for distress exports from all over the world. . So I don't think the real earnings gains will and can be sustained (moreover, they have been concentrated in the mid to upper echelons of the finance industry, so broad based real earnings gain has been weak and at times negative at best over the last 25 years.
I think the impressive real earnings gains experienced in the NICS has been terminated even if growth resumes on a stable basis. This is what I meant by the collapse of the 'miracle' economies.
So if you take out the last two exceptional years, real wages in the US have been stagnant since Keynesianism collapsed in the mid 70s. And don't forget that intensity has increased due to decreases in down time and surveillance allowed by new technologies. By the way, this is what Grossmann meant by absolute immiseration--not the reduction of wages to a biological level but wage increases not keeping not only with historico-moral standards but also with the real level of effort that had to be expended to secure them.
More later, Rakesh