Because labors in China are extremely cheap. And they are getting cheaper and cheaper in last decade, despite the GDP growth.
The labor share of income in the US is at its lowest post-war level
241–250 of 573 posts
Re: The labor share of income in the US is at its lowest post-war level
#242Earlier quoted context omitted.
I own a Medicaid home care agency in 13 states. We serve low income families and our caregivers, who earn $12-18hr which is higher than minimum wage, absolutely struggle. We have created food banks and housing assistance because even working people are a few sick days or one car repair away from homelessness. I would encourage you to go work with average Americans in average towns. The facts on the ground are stark a…
>I own a Medicaid home care agency in 13 states. We serve low income families and our caregivers There's an extreme selection bias there. If you run an agency that works with low income families you're not going to see a representative sample of the overall population.
> There's an extreme selection bias there.
Maybe. Unfortunately, what digitaltrees wrote here is ambiguous. It could also be read as this:
Our caregivers serve low income families. Those caregivers, who are our employees, earn $12-18/hr which is above minimum wage. Our employees absolutely struggle. Our employees are the ones using food banks and housing assistance because many are one car repair away from homelessness.
digitaltrees: which interpretation is correct?
Re: The labor share of income in the US is at its lowest post-war level
#243Earlier quoted context omitted.
Except for all the companies that issue shares and options as part of employee compensation.
this is mostly in tech. starbucks barista is not going to get any stocks
Starbucks sells its stock to its baristas at a 5% discount every 90 days through payroll deductions.
https://www.starbucksbenefits.com/en-us/home/stock-savings/s...
Re: The labor share of income in the US is at its lowest post-war level
#244I find this metric misleading. Where is the extra money going? To whom? Turns out most of it is not going to billionaires. Bulk of it is going to future investments. If we choose not to do that, we lose out on future gains.
Speculation or actual investment? Assuming that the allocation of capital is somehow aligned with what’s optimal for the economy/society seems naive
It's not naive, it's near optimal. The system rewards people who've done well at capital allocation with more capital to allocate, and takes capital away from those who've done poorly at it. And there's no better predict of future performance at allocating capital than past performance.
Re: The labor share of income in the US is at its lowest post-war level
#245Earlier quoted context omitted.
It's just rent. Rent for the homes we live in (including "rent" as mortgage payments to the bank) Rent passed through as costs to the consumer for the businesses we patronize. We're stuck at home more affording to be able to do less so the people who own don't have to work.
I have a similar PoV. I think rent seeking without sufficient checks is one of the biggest problems in our economy. But the underlying problem that people aren't paid enough is still true. Outside a few fields, most people are underpaid. It's even more stark when measured against productivity increases during the same time periods. That wealth went somewhere. It wasn't to most people. People have a tendency to get up…
Restaurant operations is one of the places where it's most clear the rent is the biggest problem.
You can say restaurant workers need to be paid more, and ok sure, but where is that money coming from? You pay labor, food suppliers, rent, utilities, taxes, and... where exactly is the money to pay workers more coming from?
With the number of empty storefronts in my city (not to mention restaurant closures) it's clear owners aren't making money hand over fist or there would be many more restaurants.
Restaurant workers in my experience are more likely to go to more restaurants and they can't because... their rent is too high and the price of food at restaurants is too high.
The common denominator with all of it is money being sucked away from people doing work and people hiring work by... rent seekers.
The "labor share of income" is exactly this. How much money is getting sucked out of the rest of the economy to prop up the do-nothing class. Retired people whose retirement investment was selling a house for much more labor than they bought it for and real estate owners doing as little as they can to maximize income they aren't earning.
Re: The labor share of income in the US is at its lowest post-war level
#246Earlier quoted context omitted.
> but an orthopaedic surgeon being paid the $300k USD-equivalent in Germany instead of his $750k USD income today at median would be very unhappy. I'm sure he'll manage.
Sure, but the rare type of person capable of becoming an orthopedic surgeon has other career options. There are some who are drawn to it as a calling because they love caring for patients and would do it regardless of wages. But most respond to economic incentives, so at the margins some will choose to go into technology or finance or something and make more money there. When we fix the price of something below the m…
If you as a person are turned off of a career because you can only make a mere, paltry peasant wage of $300k per year, then I think that's really a you problem there.
And as to your comments about shortages, we already have shortages.
Re: The labor share of income in the US is at its lowest post-war level
#247Earlier quoted context omitted.
The US has historically been quite opposed to the workers becoming shareholders.
Except for all the companies that issue shares and options as part of employee compensation.
More accurate to say that the US has been opposed to workers controlling the firms they work for. But the capitalists dangling just enough of a morsel to get the workers to dance 80 hours a week, but without the ability to actually control anything, and without majorly diluting? Chef's kiss.
Re: The labor share of income in the US is at its lowest post-war level
#248People are misreading the conclusion - the Covid related drop is normal and matches previous episodes, but the massive overall drop since 2000 is not. The situation on the ground is unchanged - the amount of labor being generated per person has not really changed, but the overall pie has grown massively around us.
> amount of labor being generated per person has not really changed not true, labor productivity has been steadily increasing: https://fred.stlouisfed.org/series/OPHNFB workers are simply capturing less of the economic value generated by their labor.
Chart goes up, but you really need to look at percent change. Over the last 25 years it's averaged about 2%
observation_date OPHNFB_PC1
2000-01-01 2.99256
2001-01-01 2.58092
2002-01-01 4.27146
2003-01-01 3.68422
2004-01-01 2.97991
2005-01-01 2.18582
2006-01-01 0.99665
2007-01-01 1.58927
2008-01-01 1.30737
2009-01-01 4.07061
2010-01-01 3.15513
2011-01-01 -0.02491
2012-01-01 0.93870
2013-01-01 0.59941
2014-01-01 1.00795
2015-01-01 1.27023
2016-01-01 0.61567
2017-01-01 1.49513
2018-01-01 1.40965
2019-01-01 2.13337
2020-01-01 5.30657
2021-01-01 2.06281
2022-01-01 -1.46786
2023-01-01 2.13277
2024-01-01 2.91010
2025-01-01 2.25154
Re: The labor share of income in the US is at its lowest post-war level
#249Earlier quoted context omitted.
the top 1% have nearly as much income as the bottom 80% https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
>the top 1% have nearly as much income as the bottom 80% >link for "Distribution of Household Wealth in the U.S. since 1989" income =/= wealth
The linked view of the chart is distributed by income percentile, the title is "Wealth by income percentile"
Re: The labor share of income in the US is at its lowest post-war level
#250Earlier quoted context omitted.
I strongly agree that socializing the healthcare industry will not help in any way. To the extent that healthcare costs have skyrocketed, it's precisely because of government intervention in the U.S. Healthcare industry has massively increased over the last 50 years, especially in the form of tax incentives for employers to compensate employees by way of health insurance. Anyway, with respect to the labor share of in…
> To the extent that healthcare costs have skyrocketed, it's precisely because of government intervention in the U.S. Healthcare industry has massively increased over the last 50 years, especially in the form of tax incentives for employers to compensate employees by way of health insurance. It fails to follow logically that one specific way the government got involved that drove costs up means that any possible inte…
The problem is, quite simply, insurance.
When something is paid for from a big nebulous ball of money rather than straight out of people's pockets, the downward pressure on prices just isn't there in the same way. The conversations between practitioners and insurers are about whether something is necessary, not about whether or not the practitioner is charging too much for it.
Here in the UK we see it, too - not so much in human healthcare since we have the NHS - but very definitely in animal healthcare; vets' bills have skyrocketed over the last couple of decades, in a mutually-reinforcing feedback loop with the rise in pet health insurance.