Posted on 06/03/2011 4:39:19 PM PDT by Nachum
Probably the most imprtant secular trend in recent employment data, one that has a far greater impact on the macroeconomic themes than Birth/Death and seasonal adjustment manipulated month to month shifts in the employment pool per either the household or establishment surveys, is the labor share of national income. In a 2004 paper from the St. Louis Fed, the authors make the following statement: "The allocation of national income between workers and the owners of capital is considered one of the more remarkably stable relationships in the U.S. economy. As a general rule of thumb, economists often cite labor’s share of income to be about two-thirds of national income—although the exact figure is sensitive to the specific data used to calculate the ratio. Over time, this ratio has shown no clear tendency to rise or fall." It would be wonderful if this was true, and thus if the US population really had a stable distribution of income between laborers and capital owners. Alas it is dead wrong. In fact, as the latest note from David Rosenberg points out, the "labor share of national income has fallen to its lower level in modern history - down to 57.5% in the first quarter from 57.6% in the fourth quarter of last year, 57.8% a year ago, and 59.8% when the recovery began." And here is where the Marxist-Leninist party of the US should pay particular attention: "some recovery it has been - a recovery in which labor's share of the spoils has declined to unprecedented levels."
(Excerpt) Read more at zerohedge.com ...
You think this is a good thing? it is a result of outsourcing all our manufacturing.
NOT GOOD
That is part of what is going on, no doubt. But it is also happening because so many people are at home sitting on their butts rather than working. And the lion’s share of those people would love to be at work but this Administrations policies has discouraged job creation.
The oligarchs shall stuff their faces with champagne and caviar on this news.
Not entirely true, or exclusively outsourcing.
Less labor comes from more use of technology (robotics, automation, etc.) and productivity (typically non-union shops).
Logical outcome of official government policy. If you make it expensive to hire people, fewer people will get hired.
Remember, to the leftist, if the income of the "poor" is doubled, but the income of the "rich" is tripled, that's bad. The leftist is satisfied only when the income of the "rich" goes down, even if the income of the "poor" goes down as well.
What’s the definition of “labor”?
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