Capitalists Are Hogging The Gains From Rising Productivity

The chart above (from the Global Wage Report 2014/2015) shows a stark reality of what is happening to worker wages -- not just in the United States, but in the developed world as a whole. The productivity of American workers continues to rise, but the benefits and gains from that rising productivity are no longer being shared with American workers -- which contributes greatly to the stagnation of worker wages (and actual reduction of wages once inflation is taken into account).

Here is how Professor Richard D. Wolff puts it in an article for Truthout:

In the developed countries, while real wages stagnated throughout the crisis since 2007, the productivity of workers continued to rise. That explains the deepening inequalities of income and wealth in those countries.

Productivity measures the quantity of goods and services that workers' labor provides to their bosses. The chart shows how labor productivity has kept rising (because of computers, more equipment, better training, speed-up of work etc.). The chart also shows how much less wages have risen. Wages are what capitalists pay workers for their labor.

There is thus a growing gap between what workers give capitalists (productivity) and what capitalists give workers (wages). That gap measures profits. They have grown the fastest of all. Major capitalist corporations gather those exploding profits into their hands. They pay their top executives huge salaries and bonuses, pay rich dividends and deliver huge capital gains to their shareholders. Those top executives and major shareholders are most of the super-rich who have taken so much of the nation's wealth.

There is much more in Professor Wolff's article, including at look at how the export of jobs from developed countries to undeveloped countries is seriously hurting worker wages. I urge you to read the entire article.

NOTE -- Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst where he taught economics from 1973 to 2008. He is currently a Visiting Professor in the Graduate Program in International Affairs of the New School University, New York City. He also teaches classes regularly at the Brecht Forum in Manhattan.