No. of Recommendations: 19
I’m saying this might be what we’ve witnessing, and that the high rates of return occurring since Reagan declared open season on unions. Amazon’s suit to kill the NRLB would effectively end unions in America.
I would suggest that the union bashing wasn't really a big factor in the crushing of the share of US GDP going to workers.
The two bigger effects were, I believe--
* Monopolization. In most US industries, concentration has soared along with margins, seemingly due to "lassez faire" regulation of M&A. The share of business and gross profit going to the largest 2-3 firms in an industry has risen almost without exception. Why compete when you don't have to? Merge with that rival and everybody wins!
* Competition from non-US workers. In effect, the typical worker in the US was historically not forced to compete with non-US workers, but now they do. Even very small firms are multinationals now: it's easy to get components from the global marketplace.
It isn't all bad. This raises the income of a whole lot of very poor people in the world, and reduces the income of some people in the rich world, as the two converge a bit. If you think about it, there is no rational reason in the long term to think that (say) an auto worker in Detroit should be able to purchase with an hour's wages something at Walmart that took someone in another country with comparable skills 8 hours to make, let alone assume that it is his/her birthright.
Rails are of course an exception. The guy working on a US train is a US worker. His job is more affected by Baumol's cost disease. If the productivity of some sectors soars (say, tech bros), that drives up the wages of people in industries where productivity is stagnant (usual examples are things like teaching, orchestra musicians, nursing, cleaning, and (so far) drivers). Consequently it would be rational to expect the real wages in rails to rise over time at a rate comparable to the "good" industries, even if rail productivity goes nowhere.
Jim
