> This reminds me of the old political cartoon of the fat cat factory owner sitting on the table with the white worker and the immigrant, hoarding a huge pile of cash and telling the white worker "careful, I think he wants to take your money".
Then that cartoon should be reversed, because most of national income (GDP) is wages - profits and rents are a much smaller fraction. Wage inequality driven by skill differentials and technical change explains the bulk of income inequality since the 1980s. The literature is fairly unambiguous on that point.
In fact, those market sectors where labor costs are pushed uniformly higher by distortionary policies without compensating gains in efficiency (such as education, healthcare and general administration) are the ones that exert the highest burden on the rest of the economy, leading to inflation and pushing real incomes down; this is what Baumol's cost disease is all about.
Wealth is not income - wealth is a stock, income is a flow. This is a really basic point, people really should educate themselves when thinking about this stuff. You don't need obscure sources, any textbook will do. Then you can learn about the shares of GNI.
"The labor share of income in 35 advanced economies fell from around 54 percent in 1980 to 50.5 percent in 2014." - Ownership is overtaking working.
and within that, income to the top 0.1% is rising faster than the bottom half.
The rich are getting richer, faster and faster.
See also Pikketys capital in the 21st Century. (https://www.hup.harvard.edu/catalog.php?isbn=9780674430006)
The original cartoon emphasised the fat cat factory own "hoarding a huge pile of cash". As I referenced: "the bottom 80% owning 7%" in the US.
That is wealth, he is talking about the derivative of wealth or income. Most companies pays out way more in salaries than they pay out in profits, so more money goes to workers than to owners. Giving all profits to workers would increase their income by maybe 10-20% in most cases, modern capitalism don't exploit workers that hard.
Average workers are worse off today since more and more money is going to relatively small (in terms of employment) high value companies like hospitals, tech companies etc. So it isn't that low skill workers are giving up more and more to capitalists, it is that more and more money is going to other parts in the economy and never even going to the company the low skill worker is working for.
To add to this, in the US at least, a lot of that income is paid in the form of various benefits such as health insurance and retirement contributions that aren't immediate liquid cash, so it feels like less on the receiving end.
Then that cartoon should be reversed, because most of national income (GDP) is wages - profits and rents are a much smaller fraction. Wage inequality driven by skill differentials and technical change explains the bulk of income inequality since the 1980s. The literature is fairly unambiguous on that point.
In fact, those market sectors where labor costs are pushed uniformly higher by distortionary policies without compensating gains in efficiency (such as education, healthcare and general administration) are the ones that exert the highest burden on the rest of the economy, leading to inflation and pushing real incomes down; this is what Baumol's cost disease is all about.