Attention Marxists: Labor's Share Of National Income Drops To Lowest In History

Tyler Durden's picture

Probably the most imprtant secular trend in recent employment data, one that has a far greater impact on the macroeconomic themes than Birth/Death and seasonal adjustment manipulated month to month shifts in the employment pool per either the household or establishment surveys, is the labor share of national income. In a 2004 paper from the St. Louis Fed, the authors make the following statement: "The allocation of national income between workers and the owners of capital is considered one of the more remarkably stable relationships in the  U.S. economy. As a general rule of thumb, economists often cite labor’s share of income to be about two-thirds of national income—although the exact figure is sensitive to the specific data used to calculate the ratio. Over time, this ratio has shown no clear tendency to rise or fall." It would be wonderful if this was true, and thus if the US population really had a stable distribution of income between laborers and capital owners. Alas it is dead wrong. In fact, as the latest note from David Rosenberg points out, the "labor share of national income has fallen to its lower level in modern history - down to 57.5% in the first quarter from 57.6% in the fourth quarter of last year, 57.8% a year ago, and 59.8% when the recovery began." And here is where the Marxist-Leninist party of the US should pay particular attention: "some recovery it has been - a recovery in which labor's share of the spoils has declined to unprecedented levels."

Like Rosie, Zero Hedge is not a marxist blog: quite the opposite, but like him we come to the same troubling conclusion: "extremes like this, unfortunately, never seem to lead us to a very stable place." We would go further: not only does the US already have the core elements, should one be so inclined, to provoke a (rather active) anti-fascist movement based on some interpretations of pro-corporatists policies adopted by the administration, but should another be so inclined, the country also has the groundwork in place for another neo-Marxist revolution: just take this chart, add some slogans, mix, and simmer. And who will be the natural enemy? Why only look at the great October revolution in Russia for ideas. History always rhymes.

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downwiththebanks's picture

Go back to Europe, you Land-Grabbing White boy.

The hemisphere went to hell when your kind began their raping and pillaging.

GeneMarchbanks's picture

I'm sure the time for social change is now. All economists (like Prechter) who pretend to have broad sociological "understanding" are not to be trusted.  

merehuman's picture

contractor for 30 years, am now sleeping outside on concrete, learning about cardboard, eating at the mission with the loonies and other homeless. No housing leaves many of us without income. Still i refuse foodstamps and other government aid. hurahh , i have a shopping cart and am asked questions  by the police often now. Damn nice to get some attention!

Turns out i am still the happiest homeless person i have seen all day, and there are a lot of homeless.

Vendetta's picture

you have an internet connection in a van down by the river?  cool

Dirtt's picture

The sooner this country accepts wage deflation - in conjunction with growing the Life Sentence Industry (Trumka & Banksters) - the sooner we recover.

TheGoodDoctor's picture

You can't be serious? If there is wage deflation everything will have to deflate since no one will be able to afford anything. They are only affording it now due to credit.

Quixotic_Not's picture

Again, Welcome to the New Feudalism...

You, serf, must prepare to live accordingly!

Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are inevitably ruined. ~ Patrick Henry

Al Gorerhythm's picture

Everything else is just frosting on a dog turd.

Reese Bobby's picture

"It can not be emphasized too strongly or too often that this great nation was founded, not by religionists, but by Christians, not on religions, but on the gospel of Jesus Christ!" - Patrick Henry

mr. mirbach's picture

illegal aliens = wage deflation

Wake up Sheeple!  That is exactly why there is no control at the border and CONgressional colamoring for "amnesty" or "guest worker" legislation!

downwiththebanks's picture

Go back to Europe, you genocidal land thief.

Your kind has fucked this hemisphere.

snowball777's picture

chinese workers and the erosion of manufacturing in america == wage deflation (at least when you trade a $20/hr union job making something for a $7/hr job making burgers).

Yen Cross's picture

 Miss the BLUE HELMUT!

          YEN CROSS!

   My Best to your loved ones.

US Uncut's picture

Recover? Recover to WHAT pray tell????? More of the same? Where exactly are you going with accepting a third world lifestyle for the majority of Americans?  You can't have that AND "recover" in the same sentence. Just not possible.

chet's picture

Workers actually make things.  Our "American" companies want Chinese people to do that instead.

So we grow the financial sector where people produce zero which is tangible.  They move bits from one spreadsheet to another.  Running out of bits to move around?  The financial industry extends credit and then adds it as "money" to their spreadsheets.  Take a percent.  Create some more "money."

If workers wonder aloud what the fuck has happened to their earning power, call them communists.

God bless America.

mr. mirbach's picture

too bad there are so few US based manufactures - "Workers actually make things." name 3 things other than hamburgers, cars and military aircraft.

Prometheus418's picture

Guilty on the military aircraft here, though we do other things as well.

Personally, I spend about half my time making surgical instruments, mainly prototypes.

In my town, to keep the list short, manufacturers produce:  Steel doors and windows, air filters for Caterpillar machines, Farm equipment, silica, beer, and (barbeque) grills.  There are also dozens of productive beef, dairy and produce farms.  That is a town of 3000 people.  If you move out to a larger area, we have 100+ precision machine shops, at least 20 sheet metal shops, 2 foundries, a circuit board manufacturer, hundreds of fabrication job shops, a couple dozen cabinet makers, a manufacturer of fire-engine pumps and a major furniture manufacturer.  How do we do it?  (drumroll.......) No unions.

Anyhow, just because it's not done on your block doesn't mean "we" don't make anything any more.  It just means that "you" don't.

That being said, we do need to bring a whole lot back to our shores to bring our country back from the edge.  Just tired of being ignored in these discussions- Wisconsin still makes all the stuff the rest of the US decided was not for them.  I can count on one hand the number of people I know who *don't* make something for a living- as a rule, we call those folks "unemployed."

scatterbrains's picture

wow and this is before the pump and dump operation is completed.

cosmictrainwreck's picture

bizzaro world.... did ya see the bitches still try to goose at the end of the day (3:20 - 3:40) to squeeze out a few more fractions-of-cents on their fuckin' HFT's.... with a FAIL... assholes = too kind a word

Stuck on Zero's picture

It can only happen with a continuously inflating currency.  Inflation drives all the wealth to the core.

Quixotic_Not's picture

Can I has Unexpected for $800 billion?

A long habit of not thinking a thing wrong gives it a superficial appearance of being right." ~ Thomas Paine

TorchFire's picture

The sheep sleep. I would ask them if they were awake: Can you challenge yourself to discover the catalyzing aspects of atrocities past, present and threatening and the commonalities therein? Are you hiding behind the false security of casual denial, a victim of your own normalcy bias? Have you given sanction to evil by way of your ambivalence to emerging tyrannies? Do you find yourself to be distinct from the legions of past civilizations whose citizens sat passively as innocents were thrown to the lions or marched to the train stations?


Azannoth's picture

It's a myth the people 'sleep' and don't see what's happening, I'd say in 95% of cases it's willful ignorance, as long as they can collect their unemployment check buy a sixpack and watch some Big Brother(how ironic) the're content enough not to revolt

Vic Vinegar's picture

Big Brother starts July 7.  I am looking forward to the new season – it’s a fun show.

Re: Sheep Sleep, what did our boy Aldous Huxley have to say on this matter:

“Most ignorance is vincible ignorance. We don’t know because we don’t want to know.”

As much as I wish he were not, he was right.  Why not listen to Al, stop complaining and consider if CBS is a buy?  Or at least enjoy Big Brother?

TorchFire's picture

"It's a myth the people 'sleep' and don't see what's happening....the're content enough not to revolt"

Well yes I agree in principal but you assume they would revolt under conditions that deprived them of their "comforts".  I am not so sure.

downwiththebanks's picture

And when they do wake up, you can count on the Banker-Gangsters at ZeroHedge to attack them with unprecedented vigor.

mayhem_korner's picture

Adjusted for food stamps, it's probably a push...

downwiththebanks's picture

Except it's not, you disgusting fucking shill.  Go back to hand-jobbing your Banker-Gangster bosses.

AladdinSaneGirl's picture

Was thinking about the collapse of the Weimar republic today. If the dollar devalues much more, isn't a swing to the right also probable? Needs watching particularly re: QE3.

mayhem_korner's picture

Not necessarily.  Dollar crash will take out fiat-denominated wealth stores, but the impact on income levels (essentially wages) is more nuanced.  Wages have remained pretty flat while corporate coffers have remained flush with $.  That trend would have to break.

Id fight Gandhi's picture

All the work of the Jewish bankers

Quixotic_Not's picture

Bad men cannot make good citizens. A vitiated state of morals, a corrupted public conscience are incompatible with freedom. ~ Patrick Henry


Arms discourage and keep the invader and plunderer in awe, and preserve order in the world as well as property... Horrid mischief would ensue were the law-abiding deprived of the use of them. ~ Thomas Paine

Caviar Emptor's picture

Yes, Biflation is what we have here folks, as I've been sayin' here on ZH for a while. 

Deflation? We got it. But not everywhere, not in Donald Trump's underwear. We got it in real wage growth and real net worth (plunging with housing). We're gonna get it in retirement benefits as the government cuts them. Yup, we got deflaiton.

If that were all we had, that would be one thing. But wait. there's more!

We got INflation too! We got it in the cost of living, the cost of working and the cost of doing business. It squeezes margins and it squeezes the middle class boy and girl into the working poor. The causes are several, but reckless stupid Fed tricks with expantionary monetary policy is a prime cause. There is an ocean of dollars floating out there and it's chasing too few goods in many cases. And after 3 decades of trying to export inflation, the chickens are coming home to roost


Lotsa Luck, sheeple!

Monedas's picture

If you include government employees, contractors and entitlement recipients as part of the non-capital you should...."Labor's" share of the national pie can't be going down ! The Socialists squeeze the producers then complain when they can't be as generous as government employers ? Government workers earn twice the pay and benefits of private workers ! There is your unfairness ! Monedas 2011 Monedas salutes his brothers and sisters of the "gay" persuasion who are dedicated to freedom ! He despises Barney Frank because he considers Barney an enemy of human freedom !

downwiththebanks's picture

What stupid, nonsensical propaganda.  The utter and total failure of CAPITALISM has created this Depression, and no amount of sophistry can erase that.

"Fuck my neighbor, it's all about me!"  

What a motto!

GoinFawr's picture

"I`m all right, so fuck all the rest!"

I know it`s a bit ironic, but lately whenever I see people who live the above quote as their creed get royally fucked by some unforeseen circumstance, I've been deriving a bit of a sense of satisfaction from their suffering; it`s a guilty pleasure, I`ll admit.

Ah well, if the cross worshippers are right at the very least I'll be smoking a few turds in purgatory anyway, c'est la mort and all that cal.

Yen Cross's picture

 I caught your post. Don't get me wound up.  Speak with 777.  He is ready to take the top of of life as we know it. Ya gotta settle that boy down! He is on FIRE!

GoinFawr's picture

You seem to have a serial junker on your tail YC... it isn't me, just so you know.

snowball777's picture

The earn twice the AVERAGE pay, but that farce of a comparison is based on including every Wal-Mart greeter and burger flipper on the private side of the equation and every well-heeled MIC trough-lapper contracted through Xe on the government side.

Apples, mangos, kiwis.

The 'producers' share of tax revenue is at low-tide, slick; the big multinationals aren't being 'squeezed' by anything but congress-folk fondling their balls every couple of years.

You want to point some fingers over the shitty options available in private employment? Try looking at the mofos that helped ship every manufacturing job somewhere else and let the corporate cocksuckers repatriate on the sly for a piece of the pie.

Yeah, SS and Medicare are expensive for a graying race, but so is tromping around the desert lookin' for WMD and playing snipe hunter in AfPak.


IdioTsincracY's picture

Very much so ... since the 80s .... Reaganomics, anybody?!?

Monedas's picture

Shorter version....the rich are the beneficiaries of money taken by the threat of force (taxes) and yes they are consuming more of societies life blood every day !

Quixotic_Not's picture

Remember that a government big enough to give you everything you want is also big enough to take away everything you have. - Davy Crockett

Well sheeple, are you happy with your chicken in every pot thinking now?

Well are you (D)&(R) suckers?

Enjoy your hopium & chains, I hope you dopes wear them well...

QN Out!