econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 23 August 2015

A Bit Of A Miracle No More - The Decline Of The Labor Share

by Philadelphia Fed

-- this post authored by Roc Armenter

How is income divided between labor and capital? Every dollar of income earned by U.S. households can be classified as either labor earnings - wages and other forms of compensation - or capital earnings - interest or dividend payments and rent. The split between labor and capital income informs economists' thinking on several topics and plays a key role in debates regarding income inequality and long-run economic growth. Unfortunately, distinguishing between labor and capital income is not always an easy task.

Until recently, the division between labor and capital income had not received much attention. The reason was quite simple: Labor's share never ventured far from 62 percent of total U.S. income for almost 50 years - through expansions, recessions, high and low inflation, and the long transition from an economy primarily based on manufacturing to one mainly centered on services. As it happened, the overall labor share remained stable as large forces pulling it in opposite directions canceled each other out - a coincidence that John Maynard Keynes famously called "a bit of a miracle." But the new millennium marked a turning point: Labor's share began a pronounced fall that continues today.

Why did the labor share lose its "miraculous" stability and embark on a steep decline? To investigate this shift, economists must first be sure they are measuring the labor share correctly. Could measurement problems distort our understanding of what has happened to the labor share over time? In this article, I explain the inherent challenges in measuring the labor share and introduce several alternative definitions designed to address some of the measurement problems. As we will see, the overall trend is confirmed across a wide range of definitions.

[click on image to continue reading]

Source: https://t.e2ma.net/click/tffxk/tnpyyh/9rz9uc

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
Angst in America, Part 1: Aimless Men
News Blog
The U.S. Spends More On Defense Than All Other NATO Members Combined
What We Read Today 22 March 2017
February 2017 Headline Existing Home Growth Pace Slows
Trucking Data Mixed In February 2017
A Physical Therapist Explains The Best Time To Stretch
Bank Supervision And The Central Bank: An Integrated Mission
How Might Changes In Federal Policies Boost Innovation And Productivity?
Gauging Firm Optimism In A Time Of Transition
Infographic Of The Day: The Global War On Cash
Early Headlines: Asia Stocks Down, Dollar Down, Oil, Gold Flat, GOP Health Care, NASA Funded, EU Depressions, Brexit Fin Service Moves, Japan Exports Surge, Brazil's Bad Meat And More
Ancient Rome vs. Ancient China
John Stuart Mill In 1848: Tax Driven Money
Pros And Cons Of The Gig Economy
Investing Blog
Bull Market Still Intact ... For Now
Investing.com Technical Summary 20 March 2017
Opinion Blog
Might The GOP Impeach Their Own President?
Economics Isn't Ideology-free And It's Misleading To Suggest It Is
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
22Mar2017 Market Close: Stocks Closed Mixed, Oil Continues Decline, And Gold Trends Higher As The Dollar Index Remains Under 100
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved