No. of Recommendations: 24
There is a way and I believe it’s partly responsible for the current trend in rising profit rates: growing inequality. Wages have been stagnant or declining for s as large segment of the workforce for 40+ years even as productivity has increased. There is no reason why this trend cannot continue.
Sure there is!
The cycle can continue a bit longer, but the trend can not continue indefinitely. If the profits keep going up and the wages keep going down as fractions of GDP, at some point people would be paying their employers to go to work. You'd probably have very widespread strikes and social upheaval even in the US long long before that.
Besides, the US labour share of GDP hasn't fallen as much as some people think. It fell from 61.7% to 60.4% in the ~2 decades 2004-2020, not exactly a crash. The rise in corporate profitability as a share of the pie came more at the expense of the government (falling taxes) and bondholders (lower interest) than from crushing the workers.
Jim
