Inequality in America
From 1990 to 2000, productivity grew at an annual rate of 2.1 percent, and workers’ compensation rose by 1.5 percent. In the period from 2000 to 2009, workers’ annual productivity rate rose 2.5 percent, but raises got smaller, with compensation rising by only 1.1 percent annually. In practical terms, this means that a worker whose productivity was substantially higher in 2000-2010 than in 1990-2000 – raising his employer’s profit margin – received a smaller raise despite his improved performance.
.. The authors argue that import competition is the driving factor:
“Our data yield one robust correlation: that declines in payroll shares are more severe in industries that face larger increases in competitive pressures from imports.” This accounts for “3.3 percentage points of the 3.9 percentage-point decline in the U.S. payroll share over the past quarter century.”
.. One of the most striking findings in the CNBC/Burson-Marsteller survey is that corporations and the free market are viewed far more favorably in developing countries, where capitalism is just emerging, than in advanced countries.
On a basic question, “How favorable are you toward corporations?” the general public in emerging economies was markedly favorable, 72-24, while those in advanced economies were far more ambivalent, 52-40.