Friday, June 7, 2013

The Share Of Income Going To Labor Is Falling Everywhere

Labor's share of income has been declining across the world, while the share of income going to capital has been increasing.  The implication is that the policies of any single nation are not responsible for the large shift in income from labor to capital.  Since income inequality has also been rising everywhere, labor is being hit with a double whammy.  Its share of income has decreased, and it gets a smaller share of the labor income that is generated. 

Its not easy to determine the factors that have contributed to the global shift of income from labor to capital.  The trend, however, is accompanied by the financialization of the global economy and by the rapid globalization of the economy.  This has been enabled by changes in technologies and communication which are not the direct cause of the shift in labor's share of income.

No comments:

Post a Comment