***** Working Paper No. 297
What's Behind the Recent Rise in Profitability?
by Edward N. Wolff
December 1999
...The movement of the rate of profit over time is due to two major effects: changes in the share of profits in value added and movements in the organic composition. The latter, in turn, is due to movements in sectoral organic composition levels and shifts in the employment shares among industries. On the basis of equations (8) and (16), we can separate out the effects of shifts in employment composition on the movement of the overall rate of profit. Results are shown in Panels C and D for the two profit rate measures.
The results show rather persuasively that structural shifts were an important offset to rising organic composition on the industry level. Over the entire half century, rising organic composition on the industry level would have caused the net rate of profit to fall by 10 percentage points and the gross rate of profit to fall by 14 percentage points if employment shares had remained constant. The shift in employment toward the more labor intensive industries almost fully counteracted the increase in the organic composition on the industry level -- by itself, responsible for an 9 percentage point increase in the net rate of profit and a 13 percentage point increase in the gross rate of profit. The employment effects were again strongest in the 1958-67 and 1977-87 periods. In the 1987-97 period, falling organic compositions on the sectoral level, coupled with employment shift effects and a rising profit share in income, led to a resurgence in the rate of profit (both net and gross)....
<http://www.levy.org/docs/wrkpap/papers/297.html> *****
The post-WW2 settlement between capital and organized labor (both male-dominated) deprived American women of wartime gains (women's employment in jobs & industries that had become male bastions) and pushed them out of manufacturing and into idealized motherhood and domesticity. Soon, however, women got re-recruited into the labor force (even before the rise of second-wave feminism), but not as unionized factory workers but as non-unionized, often part-time service workers (which the ideology of femininity & material conditions of the double burden induced women to settle grudgingly for). This re-gendering of work must have facilitated the "shift in employment toward the more labor intensive industries," which, according to Edward Wolff, "almost fully counteracted the increase in the organic composition on the industry level" and helped restore profitability. Liberal feminism in America has been an ambivalent social force in this employment shift, being simultaneously complicit with _and_ resistant to capital's strategy for overcoming periodic crises in profitability. That liberal feminism, not marxist-feminism, has been the dominant tendency in women's movements highlights the limitations of male-dominated organized labor that said "Good Riddance!" to the Reds & Rosie the Riveter.
Yoshie