[lbo-talk] Fitch and Brenner

Doug Henwood dhenwood at panix.com
Mon Feb 23 11:02:11 PST 2009


On Feb 23, 2009, at 1:40 PM, SA wrote:


> Plus, frankly, I was a little shocked that Brenner didn't seem to
> know, or make the connection, that empirically, U.S. wages have not
> been cut to the benefit of profits.

Sure they have. There are some problems with using the wage & salary figures from the NIPAs. One is that the aggregate measure includes fringe benefits, which accrue mainly to the top half of the income distribution. And another is that they include managerial pay, most of which is conceptually a return to capital rather than a pure wage. And a third is that the W&S total includes public sector workers. A proxy for working class earnings in the private sector can be computed by multiplying the average weekly wage times the number of production workers times 52. That measure peaked at 30.2% of GDP in 1972. It fell raggedly through the rest of the 1970s, to 27.6% in 1979, when Volcker took office. It fell to 23.1% at the 1990 peak, and stayed fairly steady through the 1990s - *despite an acceleration in productivity growth*. It then resumed falling after 2000, to 20.9% last year.

The last expansion saw a massive increase in profits, and a minuscule one in labor income.

Doug



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