The Wage Share: Why is Labour such a lousy investment?

This data from the NY times does a good job of showing how the wage share has not increased as productivity has increased.

If you think labour is like any other commodity, you should wonder why the return on labour has not appreciated as it has increased in productivity. If I invested in the development of any other commodity, like say software or a machine, and its productivity increased at the rate labour’s productivity has increased – I would expect the returns on investment to increase accordingly – because, I would have had to invest into that piece of capital in order to increase its productivity.

This data shows how workers have been forced to invest in themselves in training they pay for, but then the corresponding increases in productivity are not in fact being paid back to them in higher wages.


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