Monday, December 10, 2012
There Has Been A Strong Recovery From Recession For The Well Off
Output per worker in the US in increased but wages declined. That is because all of the growth in income went to the top 10%. There was even greater inequality within that group. The top 1% received 93% of the growth in income. There are lots of explanations for this result but clearly the loss of labor power is part of the explanation. The decline in union membership, and the threats by many firms to export jobs overseas, unless they receive wage concessions, is part of the explanation. Lower wages mean higher profits and an increasing return on capital. The GOP is working hard to weaken the bargaining power of labor even further. Public employee unions are the largest remaining unions in the US. GOP governor's and legislatures are doing what they can to reduce their membership and negotiating power as well. Unless we address the power imbalance in the US, wages will continue decrease as a share of national income.