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Why is the labor share of income declining? An informal meta-analysis

jzmazlish.substack.com · 12,817 words · saved by 1 readers

Seven years ago, Thomas Piketty’s Capital in the Twenty-First Century landed on coffee tables across the English-speaking world. With his proclamations about the rise of the rentier class, newfound attention was devoted to the divergent incomes of laborers and capitalists. Google trends data confirms the post-2008 surge in focus upon terms like inequality, labor income, and the median wage. Within this broad category of “concerns about the income distribution,” there are three primary issues: 1) The declining labor share of income. 2) Rising income inequality. 3) The growing gap between productivity and the median-wage. Each of these phenomena deserves its own investigation; here I’m going to focus on the first issue — labor’s share of income — though there is inescapable entanglement between all three. What is the “labor share of income”? It is Marx’s favorite economic statistic: it indexes the division in economic reward between toiling labor and idle, acquisitive capital. The idea b

Why is the labor share of income declining? An informal meta-analysis J. Zachary Mazlish Sep 20, 2021 46 8 10 Share Seven years ago, Thomas Piketty’s Capital in the Twenty-First Century landed on coffee tables across the English-speaking world. With his proclamations about the rise of the rentier class, newfound attention was devoted to the divergent incomes of laborers and capitalists. Google trends data confirms the post-2008 surge in focus upon terms like inequality , labor income , and the median wage . Within this broad category of “concerns about the income distribution,” there are three

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