40 Years of Class Warfare in One Chart.

[georgephillip]

"Productivity in the economy grew by 80.4 percent between 1973 and 2011 but the growth of real hourly compensation of the median worker grew by far less, just 10.7 percent….

"The pattern was very different from 1948 to 1973, when the hourly compensation of a typical worker grew in tandem with productivity.

"Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt."

40 Years of Economic Policy in One Chart CounterPunch Tells the Facts Names the Names

In the 1970s wages detached from productivity and the richest among us began using their newly acquired wealth to reduce taxes on capital, role back regulations, break unions, "and induce their shady Central Bank buddies to keep interest rates locked below the rate of inflation so they could cream hefty profits off gigantic asset bubbles."

Mission Accomplished?

 

[SwimExpert]

Very good post.

Now, the question is this: Why did compensation deviate from productivity and what will it take to change this, and realign compensation with productivity?

I would submit that the deviation occurred because workers became complacent and apathetic toward their own pay and began settling for pay that was lower in value than their production. The best way to counteract this trend is for workers to be more assertive and advocate for their own compensation.

 

[rightwinger]

"Productivity in the economy grew by 80.4 percent between 1973 and 2011 but the growth of real hourly compensation of the median worker grew by far less, just 10.7 percent….

"The pattern was very different from 1948 to 1973, when the hourly compensation of a typical worker grew in tandem with productivity.

"Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt."

40 Years of Economic Policy in One Chart CounterPunch Tells the Facts Names the Names

In the 1970s wages detached from productivity and the richest among us began using their newly acquired wealth to reduce taxes on capital, role back regulations, break unions, "and induce their shady Central Bank buddies to keep interest rates locked below the rate of inflation so they could cream hefty profits off gigantic asset bubbles."

Mission Accomplished?

What happened in 1980?

We made a comittment to supply side economics

 

[danielpalos]

I believe we merely need to reserve labor from that market at the rock bottom cost of a form of minimum wage for wages to better correlate with productivity, with that form of full employment of resources in that market.

 

[danielpalos]

"Productivity in the economy grew by 80.4 percent between 1973 and 2011 but the growth of real hourly compensation of the median worker grew by far less, just 10.7 percent….

"The pattern was very different from 1948 to 1973, when the hourly compensation of a typical worker grew in tandem with productivity.

"Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt."

40 Years of Economic Policy in One Chart CounterPunch Tells the Facts Names the Names

In the 1970s wages detached from productivity and the richest among us began using their newly acquired wealth to reduce taxes on capital, role back regulations, break unions, "and induce their shady Central Bank buddies to keep interest rates locked below the rate of inflation so they could cream hefty profits off gigantic asset bubbles."

Mission Accomplished?

What happened in 1980?

We made a comittment to supply side economics

Yes, but the right had it commuted to simply bailing out the wealthiest and then letting the rest trickle down.

 

[USNavyVet]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

 

[rightwinger]

"Productivity in the economy grew by 80.4 percent between 1973 and 2011 but the growth of real hourly compensation of the median worker grew by far less, just 10.7 percent….

"The pattern was very different from 1948 to 1973, when the hourly compensation of a typical worker grew in tandem with productivity.

"Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt."

40 Years of Economic Policy in One Chart CounterPunch Tells the Facts Names the Names

In the 1970s wages detached from productivity and the richest among us began using their newly acquired wealth to reduce taxes on capital, role back regulations, break unions, "and induce their shady Central Bank buddies to keep interest rates locked below the rate of inflation so they could cream hefty profits off gigantic asset bubbles."

Mission Accomplished?

What happened in 1980?

We made a comittment to supply side economics

Yes, but the right had it commuted to simply bailing out the wealthiest and then letting the rest trickle down.

Seems like instead of trickling down, the rich just kept the money

 

[georgephillip]

ow, the question is this: Why did compensation deviate from productivity and what will it take to change this, and realign compensation with productivity?

I think automation played a huge role, jet engines and computers, for example, make it possible for management to control a workforce on the opposite side of the planet nearly as efficiently as one on the opposite side of the street. I suspect all the productivity gains of the past forty years have gone to capital because of the basic architecture of capitalism itself. What is to become of millions of workers displaced by technology?

 

[georgephillip]

Seems like instead of trickling down, the rich just kept the money

If land, labor, and capital are the only three factors of production, that would seem to guarantee those who own the capital are entitled to all of the fruits of constantly improving technology.

 

[georgephillip]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

Some would argue that women entered the work force because a declining share in the productivity pie meant households could no longer stay afloat with only a single spouse employed.

 

[rightwinger]

Seems like instead of trickling down, the rich just kept the money

If land, labor, and capital are the only three factors of production, that would seem to guarantee those who own the capital are entitled to all of the fruits of constantly improving technology.

Why?

 

[USNavyVet]

Seems like instead of trickling down, the rich just kept the money

If land, labor, and capital are the only three factors of production, that would seem to guarantee those who own the capital are entitled to all of the fruits of constantly improving technology.

Why?

Money talks and bullshit walks.

 

[danielpalos]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

You haven't argued with with many bookkeepers have you?

a large supply of persons with disposable income also creates a large supply of consumers with wants.

 

[danielpalos]

Seems like instead of trickling down, the rich just kept the money

If land, labor, and capital are the only three factors of production, that would seem to guarantee those who own the capital are entitled to all of the fruits of constantly improving technology.

Why?

Money talks and bullshit walks.

I am with the Russians on this one. "When money talks, the truth keeps silent."

 

[danielpalos]

"Productivity in the economy grew by 80.4 percent between 1973 and 2011 but the growth of real hourly compensation of the median worker grew by far less, just 10.7 percent….

"The pattern was very different from 1948 to 1973, when the hourly compensation of a typical worker grew in tandem with productivity.

"Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt."

40 Years of Economic Policy in One Chart CounterPunch Tells the Facts Names the Names

In the 1970s wages detached from productivity and the richest among us began using their newly acquired wealth to reduce taxes on capital, role back regulations, break unions, "and induce their shady Central Bank buddies to keep interest rates locked below the rate of inflation so they could cream hefty profits off gigantic asset bubbles."

Mission Accomplished?

What happened in 1980?

We made a comittment to supply side economics

Yes, but the right had it commuted to simply bailing out the wealthiest and then letting the rest trickle down.

Seems like instead of trickling down, the rich just kept the money

should we ask them to practice abstinence and just saying "no"?

 

[USNavyVet]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

You haven't argued with with many bookkeepers have you?

a large supply of persons with disposable income also creates a large supply of consumers with wants.

Do the basics of supply and demand confuse you? More people going for the same jobs is an increase in supply. Figure the rest out on your own.

 

[danielpalos]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

You haven't argued with with many bookkeepers have you?

a large supply of persons with disposable income also creates a large supply of consumers with wants.

Do the basics of supply and demand confuse you? More people going for the same jobs is an increase in supply. Figure the rest out on your own.

you have to increase supply if you have more demand.

 

[USNavyVet]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

You haven't argued with with many bookkeepers have you?

a large supply of persons with disposable income also creates a large supply of consumers with wants.

Do the basics of supply and demand confuse you? More people going for the same jobs is an increase in supply. Figure the rest out on your own.

you have to increase supply if you have more demand.

Great. Now back to the subject of the OP.

 

[danielpalos]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

You haven't argued with with many bookkeepers have you?

a large supply of persons with disposable income also creates a large supply of consumers with wants.

Do the basics of supply and demand confuse you? More people going for the same jobs is an increase in supply. Figure the rest out on your own.

you have to increase supply if you have more demand.

Great. Now back to the subject of the OP.

I believe we merely need to reserve labor from that market at the rock bottom cost of a form of minimum wage for wages to better correlate with productivity, with that form of full employment of resources in that market.

 

[USNavyVet]

Basic supply and demand. In the late 60s women and minorities were being educated more and more and entering the workforce. The addition of women in many formerly male jobs created a large supply.

You haven't argued with with many bookkeepers have you?

a large supply of persons with disposable income also creates a large supply of consumers with wants.

Do the basics of supply and demand confuse you? More people going for the same jobs is an increase in supply. Figure the rest out on your own.

you have to increase supply if you have more demand.

Great. Now back to the subject of the OP.

I believe we merely need to reserve labor from that market at the rock bottom cost of a form of minimum wage for wages to better correlate with productivity, with that form of full employment of resources in that market.

Try reading the OP again.