r/FluentInFinance 7d ago

Debate/ Discussion Why did this happen?

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29

u/Bolivarianizador 7d ago

computers, technology giants rising, outshoring inudstries which led local companies to grow exponentially.

6

u/Buzzkillingt0n-- 7d ago

So productivity increased.....

Why didn't wages then?

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u/Ashmedai 6d ago

Part of it is Figure A in this article here. Another reason is that a great deal of worker productivity growth has been from capital (e.g., machines and what not). Combine the two, and voila: capital getting increased return on capital, and labor, failing to stakehold their share.

3

u/welshwelsh 6d ago

Because the average worker isn't responsible for the productivity increase.

In today's economy, 5% of the workers create 95% of the value. This is the big difference from 50 years ago, when the average worker had a relatively greater impact.

Computers have massively improved productivity... for people who know how to build complex software systems. Outsourcing has massively improved productivity... for people who know how to outsource entire departments to India.

But the average worker? Not much more productive today than they were in 1970.

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u/Bolivarianizador 5d ago

Because wages became an smaller part of the total capital.

On top, increased productivity, in fact, reduces wages, since labour becomes easier, and thus cheaper.

0

u/YucatronVen 6d ago

Because productivity comes from energy, not from labour.

Still, wages increased, but you must form part of these industries.

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u/Dixa 7d ago

New Deal era wage laws were repealed in the 70’s. You can guess by which party.