August 19, 2020
THUS THE THIRD WAY:
The triumph of capital over labor (Felix Salmon, 8/19/20, Axios)
Historically, about two thirds of economic output went to workers in exchange for their labor, with the other third being retained by owners. But since 2000, that ratio has been plunging.Now that America's workforce has been decimated by the COVID-19 pandemic, the share of national income being kept by workers could hit a new record low.The bottom line: It's unclear how or whether workers will be able to regroup and reclaim more of the fruits of their labor. So long as capital retains the upper hand, an increasing share of corporate revenues will show up as profits. Which is good news for anybody owning stocks.
The point of an economy is to generate wealth and the lower you can get the labor input the more it generates. The question now is how to get capital into the hands of the citizenry without boondoggle employment. That's a political question, not an economic one.
Posted by Orrin Judd at August 19, 2020 5:39 AM