http://www.bloomberg.com/news/2011-10-19/kaldor-s-facts-fall-occupy-wall-street-rises-commentary-by-peter-orszag.html
parapete:
"In Economics 101, students learn that the share of national income received by labor stays roughly constant with the share received by capital."
" This is the first of “Kaldor’s stylized facts,” articulated half a century ago by the Cambridge economist Nicholas Kaldor. "
"Recent experience betrays this lesson. Over the past two decades -- and especially since about 2000 -- the share of national income that flows into wages and other kinds of worker compensation has been plummeting in various countries"
so does petelicker have a econ 101 answer for this ??
no not really
firs the facts as pete reads em:
"In 1990, about 63 percent of business income in the U.S. took the form of wages and other types of labor compensation,
. By 2005, that figure had dropped to 61 percent.
And by 20011 it had fallen to 58 percent.
the loss of about 5 percentage points or so of private-sector income
amounts to more than $500 billion a year.
if labor’s share hadn’t fallen,
labor income would be $500 billion higher this year. "
"In Germany and France, the labor share fell about 4 percent from 1995 to today,
and it dropped about 6 percent in Australia andJapan during the same period"
"Interestingly, the labor share has also been declining significantly in China"
here's where petey bird does his back flip up his ass
"The two primary drivers (behind share decline)
are globalization and technological change
in "roughly equal roles"
tech change is a red herring
effective demand can "create " as much employment as u want
short of social explosions
"As automation reduces the demand for workers, the labor share initially falls, but in time, as people adjust their skills to suit the new technology, the effect is often reversed. "
bogus bogus bogus
structural unemployment is a myth destroyed by the arsenal of democracy years
so how 'bout globalization ?
"From 1980 to 2005, as the world became more integrated, the effective labor supply available on a global basis expanded by 100 percent to 300 percent (depending on how the estimates are done). That increased competition has pushed labor compensation down in the industrialized economies"
ah stopler samuelson a shift in relative factor "size "
yup labor is a factor like natural resources and machines
but how do we count here ?
we got unit problems
never mind we'll use "market values "
call it resouce rents / labor wages/ machines ? well lets wave a hand and say
" capital value "
yup we just went on a magic mystery ride ...
the change in wage share is caused by ...the change in ..well the relative scarcity
of labor versus ...capital ??
get it ?
in 101 eco we assume very special markets
we assume they are complete and all clearing at once
this is even more magical then u can imagine
take joe stgilitz word for that
pete the prophet of doom
"Unless we are somehow going to cut ourselves off from the world
we face the prospect of a continued downward trend in the labor share
No wonder the frustrated Wall Street protesters
lack any specific proposals for change: We are effectively missing $500 billion a year in wages,
and
no one has a credible set of ideas that would bring it back"
now if we were to get petey into a gilded cage ..and made a few suggestions
about what might get him back out
might he sing a happier tune ?
btw
here's wiki on kaldors stylized facts from the late 50's
"The shares of national income received by labor and capital
are roughly constant over long periods of time"
" the rate of growth of the capital stock per worker
is roughly constant over long periods of time"
"The rate of growth of output per worker
is roughly constant over long periods of time"
"The capital/output ratio
is roughly constant over long periods of time"
"The rate of return on investment
is roughly constant over long periods of time"
"The real wage grows over time at
the rate of productivity per laboring hour "
