Wednesday, September 26, 2012

Upward Redistribution

There has been some labor unrest in China. I'm sadly kind of surprised they haven't been massacred. But that isn't the point. A mainstream, allegedly "Left" economics writer, Matt Yglesias, doesn't seem to understand what he's talking about.

Why are workers rioting in China? Because, says Matt, of the large gap between labor productivity and labor compensation there, which is similar to how things once were in the US and Western Europe but is unlike anything in the contemporary US.
Oh really? Since 1973, labor productivity in the US has risen 80.4 percent. Yet median wages have increased only 4 percent, and median compensation as a whole—which includes benefits—has only increased 10.7 percent.

Workers are more productive than ever, and the substantial reward goes to the top. If you think this is unrelated to the decline in Union membership and power, you are silly.

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