Labor Theory of Value

 

The Economic Policy Institute (EPI), an independent think tank, shows the growing gap between productivity and worker pay since 1979, during which productivity grew 3.5 times as much as pay.

 If wages had kept pace with productivity, then the median hourly wage (adjusted for inflation) in 2017 would have been $33.10. The actual median hourly wage in 2017 was $23.15, a gap of $9.95 per hour.

In 2017 alone, then, the average worker lost $17,385 — because wages have not kept up with productivity.

This means — in 2017 alone—the total amount of income lost to all production and nonsupervisory workers was $1.78 trillion.

 Total household debt has increased as workers take out loans to cover the wages they used to get.

Labor’s average share of GDP in the 1950s was 63.6%. In the 2010s, that share was 59.4% — a downward shift of 4.2 percent, about $1 trillion of lost labor compensation each year. 

 Corporate profits have been soaring. Companies have been paying employees an increasingly smaller share of the value their labor produces. they increased dividend payments to shareholders.

In 2017 alone, dividends paid by U.S. businesses totalled $1.5 trillion. Between 1979 and 2020, domestic corporations paid shareholders $27 trillion.

The wealth workers should have received has, arguably, instead been given to shareholders through dividends — a mechanism which functions like an upward distribution of wealth. 

Of the $1.8 trillion not paid to workers in 2017, $1.5 trillion went to shareholders instead. The richest 10% of Americans own 84% of the value of shares of stock.

For the 2017 tax year, aggregate data from the IRS shows that 83% of dividends went to filers with an adjusted gross income of more than $100,000 — roughly the top 18% of filers.

What’s more, 37% of all dividend income went to the top 0.3% of filers — those who took home more than $1 million. These individual tax filings don’t account for the dividends given to institutional investors — the primary shareholders of publicly traded companies, which include financial management companies and pension funds.

 In a Single Year, $1.78 Trillion Was Taken From the Working Class - In These Times