Slides from today’s talk at the AFL-CIO

June 14th, 2016 at 3:26 pm

Some attendees asked for my slides so here they are.

A few explanations for those who weren’t there.

NIWG=non-inflationary wage growth, which I argued equals the the three factors you see there. What I’m calling “Bivens x” is Josh Bivens estimate that at current or even somewhat faster wage growth rates it would take a few years before the compensation share of national income was back to its pre-recession peak. This is another source, an underappreciated one, of NIWG.

The pictures in slide 5 just show my analysis of how wage growth is not bleeding into price growth. Details here.

The last slide mentions the FEPM: full employment productivity multiplier, explained here.


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2 comments in reply to "Slides from today’s talk at the AFL-CIO"

  1. Smith says:

    “years before compensation share of national income was back to its pre-recession peak”?
    Back of the envelope calculation, $15 trillion national income ($18 trillion GDP less various items like imputed rent and I forget what else), the %2 delta from 2007 is then about $300 billion from 125 million working = $2,500 which isn’t bad when the median is $50,000. But if this comes out of the pocket of the top 10%, you’re taking $25,000 from them (and they only make about $125,000 on the low end). But the real decision makers running things are the .1% served by the 1%. Especially for the .1%, the $25,000 may be $250,000 or $2.5 million, but an even bigger reason they’d be affected is this. Their $10 and $20 million dollar salaries depend on showing increased profits, and earning growth. Their compensation packages don’t distinguish between lower profits from lower sales or rewarding their own workers, or in fact just letting workers catch up to where they were previously. Giving workers back their share will eat into that year’s profit growth and year over year comparison.

    Also true wage growth could easily trigger price increases because the economic power over prices is even more concentrated than the 1990s. Oligarchy and pricing power, lack of competition and anti-trust enforcement helped create 1970s stagflation.

  2. Juan says:

    Totally concur.