Thanks for this article. Wow, a negative savings rate! The wealthy have adopted the middle class' spending habits, woohoo!
Yeah, economic policy has to place a sharp focus on reversing this hyperaccumulation of wealth. My hunch on how we got here is that positive changes in worker productivity have been far greater than positive changes in the real wage in most cases, for a very long while: rank-and-file workers produce lots of awesome stuff that leads to giant revenues, and then upper management pockets a disproportionate share, or else it's being used to do whatever stock market voodoo businesses do.
To visualize where I'm coming from here, check out the BLS data on
worker productivity versus
wage increases lately.
In the first quarter of 2010, worker productivity rose 2.8%, whereas average wages increased by -- being generous and using the federal minimum wage of $7.25 an hour in the US -- 1.4%, or 10 cents on the $7.25 assuming everyone were working for minimum wage.
This is only a conceptual demonstration of what I'm trying to get at; there's all sorts of deflators one can choose from to account for inflation (and economists even differ on which ones to use), yadda yadda yadda.
I'm not qualified to do it yet because I still need to learn how to properly handle time series data, but sometime I'd like to go through and run some regressions comparing the difference between productivity growth and wage growth year by year, to available measurements of income inequality during those years, just to see if and how trends in productivity rewards have changed over the years.
What's curious to me is how little the media and even economic academia discuss the wage vs. productivity issue -- I feel incredibly ignorant about it let alone how these data are compiled exactly, and yet it seems as if it should be important for citizens to understand. Looks like there were
some articles about this written circa 2006 now that I look.
