Thursday, June 01, 2017

Wage Cuts

 In a decade, wages’ share of national income (value added) declined six percent on average: 
from 63 to 57 percent in USA;
from 64 to 59 percent in Germany; 
from 63 to 57 percent in the UK; 
from 62 to 56 percent in Japan and 
from 66 to 54 percent in China.

Symmetrically, profits grew all over and inequality rose inside almost all countries.

One of the main factors used to explain such phenomena is globalization. With economic borders eroding and capital flowing all over searching for the highest yield, the rate of profit tends to equalize and any increase here, brought through wages’ decline, is replicated everywhere.