[lbo-talk] Labor union decline, not computerization, main cause of rising corporate profits

Wojtek S wsoko52 at gmail.com
Sun Jun 16 08:30:09 PDT 2013


Re: The other part is the distribution of national income, the total economic pie, between workers' compensation ('labor's share') and corporate profits. It's a zero sum game: whatever is not going to the workers goes to the corporations"

[WS:] Not quite. First, the value added by an enterprise has fundamentally three components - 1. compensation of employees (including executive salaries), 2. taxes, property income etc, and 3. and operating surplus which includes profits and savings (i.e. amount that is reinvested). Income inequality can result even if 3. remains constant in relative terms, i.e.when executive salaries grow faster than other salaries or when benefit costs grows faster than other salaries. What is more, an increase in the relative share of 3 does not necessarily lead to income inequality, it may result in increased savings i.e. investments. The latter is not necessarily a bad thing - for example in many socialist economies savings/investments were high and wages stagnant. When wages started to grow, investments declined and with them, socialist economies (my source of this information is Bernard Chavance).

More generally, if wages (individual consumption) remain stagnant, but collective consumption of public goods and services financed by taxes and benefit part of employee compensation goes up, this is beneficial for general social welfare due to the economies of scale.

On Sun, Jun 16, 2013 at 10:32 AM, c b <cb31450 at gmail.com> wrote:


> Labor union decline, not computerization, main cause of rising
> corporate profits
>
> http://www.eurekalert.org/pub_releases/2013-05/asa-lud052813.php#
>
> The full report is at this pdf:
> http://www.asanet.org/journals/ASR/Jun13ASRFeature.pdf
> ___________________________________
> http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
>

-- Wojtek

"An anarchist is a neoliberal without money."



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