Re: the conservative mind
Jeffrey Fisher wrote:
so, the common sense conclusion here is that there is a causal relationship between the low wage growth and the high profit growth, ie, that profit growth is so robust precisely because wage growth has been suppressed. right?
can one actually make that case? or do we think there’s something else going on?
One can absolutely make that case. In fact, it’s the only reasonable explanation for where the productivity gains of the last 4 years have gone. Into profits and upper-managerial pay.
Robert Gordon has a paper on this (which I haven’t read yet): http://faculty-web.at.northwestern.edu/economics/gordon/BPEA_Meetingdraft_Complete_051118.pdf.
Doug