| Technically, the point of this chart is that prices go up at about the same rate as labor costs, but no more. If you try to raise prices too much, competition will eventually force you to lower them. Likewise, if you try to push labor costs down, workers will go elsewhere and you'll eventually have to increase wages to attract new employees. Generally speaking, labor gets a fairly steady percentage of corporate profits, and as productivity goes up, wages go up. Until about 2000, that is, when wages began to stagnate but prices rose steadily anyway. Profits continued to increase, but none of the increase was going to workers. Karl's thesis is that the Industrial Revolution was a one-time deal and it's over now: We are returning to an environment where productivity gains do not accrue to unskilled labor because they are imbedded in the brains of the innovators. What this chart hides... |
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At motherjones.com
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