<story><title>Technology Change Not the Culprit in Wages Falling Behind US Productivity Gains</title><url>https://www.nakedcapitalism.com/2018/02/technology-change-not-culprit-wages-falling-behind-us-productivity-gains.html</url></story><parent_chain><item><author>padobson</author><text>&lt;i&gt;At the opposite end of the spectrum – which we call ‘strong linkage’ – it’s possible that productivity growth translates fully into increases in typical workers’ pay, but even as productivity growth has been acting to raise pay, other factors (orthogonal to productivity) have been acting to reduce it.&lt;/i&gt;&lt;p&gt;&lt;i&gt;At the same time, non-purely technological hypotheses for rising mean-median inequality include the race between education and technology (Goldin and Katz 2007), declining unionisation (Freeman et al. 2016), globalisation (Autor et al. 2013), immigration (Borjas 2003), and the ‘superstar effect’ (Rosen 1981, Gabaix et al. 2016). Non-technological hypotheses for the falling labour share include labour market institutions (Levy and Temin 2007, Mishel and Bivens 2015), market structure and monopoly power (Autor et al. 2017, Barkai 2017), capital accumulation (Piketty 2014, Piketty and Zucman 2014), and the productivity slowdown itself (Grossman et al. 2017).&lt;/i&gt;&lt;p&gt;All of the non-technological reasons, to me, boil down to globalization.&lt;p&gt;I&amp;#x27;d love to see the productivity-wage divergence chart in China and other developing countries. I wouldn&amp;#x27;t be surprised if the divergence is inverted in those places that have seen unprecedented wage growth over the last forty years.&lt;p&gt;I guess what I&amp;#x27;m saying is that I don&amp;#x27;t think productivity and wages have diverged as much as people think, it&amp;#x27;s just that a national analysis is insufficient in a global labor market.</text></item></parent_chain><comment><author>mirimir</author><text>This seems like the obvious answer. There was a consensus after WW II to push globalization. The theory being that international economic relationships would reduce chances of war. Plus dramatic improvements in shipping efficiency, through containerization and attendant automation. So yes, &amp;quot;a national analysis is insufficient in a global labor market.&amp;quot;&lt;p&gt;Also, globalization has necessarily depended on reducing protectionism. And it&amp;#x27;s arguably been associated with declining nationalism. In a collective sense. As in, for example, American firms and their employees being loyal to each other. I believe that this sense of nationalistic loyalty peaked in the 40s and early 50s. Reflecting the war effort, of course.</text></comment>
<story><title>Technology Change Not the Culprit in Wages Falling Behind US Productivity Gains</title><url>https://www.nakedcapitalism.com/2018/02/technology-change-not-culprit-wages-falling-behind-us-productivity-gains.html</url></story><parent_chain><item><author>padobson</author><text>&lt;i&gt;At the opposite end of the spectrum – which we call ‘strong linkage’ – it’s possible that productivity growth translates fully into increases in typical workers’ pay, but even as productivity growth has been acting to raise pay, other factors (orthogonal to productivity) have been acting to reduce it.&lt;/i&gt;&lt;p&gt;&lt;i&gt;At the same time, non-purely technological hypotheses for rising mean-median inequality include the race between education and technology (Goldin and Katz 2007), declining unionisation (Freeman et al. 2016), globalisation (Autor et al. 2013), immigration (Borjas 2003), and the ‘superstar effect’ (Rosen 1981, Gabaix et al. 2016). Non-technological hypotheses for the falling labour share include labour market institutions (Levy and Temin 2007, Mishel and Bivens 2015), market structure and monopoly power (Autor et al. 2017, Barkai 2017), capital accumulation (Piketty 2014, Piketty and Zucman 2014), and the productivity slowdown itself (Grossman et al. 2017).&lt;/i&gt;&lt;p&gt;All of the non-technological reasons, to me, boil down to globalization.&lt;p&gt;I&amp;#x27;d love to see the productivity-wage divergence chart in China and other developing countries. I wouldn&amp;#x27;t be surprised if the divergence is inverted in those places that have seen unprecedented wage growth over the last forty years.&lt;p&gt;I guess what I&amp;#x27;m saying is that I don&amp;#x27;t think productivity and wages have diverged as much as people think, it&amp;#x27;s just that a national analysis is insufficient in a global labor market.</text></item></parent_chain><comment><author>malvosenior</author><text>I would add women entering the workforce en bulk, essentially doubling it. Between that and globalization it would seem the supply&amp;#x2F;demand ratio significantly changed to have downward pressure on salaries.</text></comment>