Haiku Politics

In an article by Louis Uchitelle, published in the Sunday New York Times, titled "Seizing Intangibles for the G.D.P.", we find the following juicy little quote:

The numbers show that the profit portion of the gross domestic product has risen mildly in recent years, while the wage-and-salary share has shrunk slightly. There is evidence, however, that because of the way the G.D.P. is calculated, the actual shift is much more pronounced.

"We know that income inequality is quite substantial," said Harry J. Holzer, a labor economist at Georgetown University, "and this new evidence suggests that it is worse than we thought."

The article delves into the complexities of the way the G.D.P. is calculated, specifically detailing one small change that is being experimentally proposed by the government bureau that produces the quarterly G.D.P. report. This change, involving how R&D expenditures will be calculated, has the interesting effect of exposing a fact that has been at least partially masked up to now:

This reclassification leaves no doubt that workers are being left behind as the G.D.P. expands. When R & D is counted as profit, the employee compensation share of national income drops by more than one percentage point. In a $12.5 trillion economy, that's big money.

Here we have yet further confirmation of a trend that other signs are also pointing to--namely, that in the US economy, the disparities in wealth between the riches and the rest of us are increasing. The article concludes with this comment: "Then, too, most of the nation's workers are bereft of bargaining power. Unless that returns, labor's share of national income seems likely to continue its decline."

Posted by The Haikuist on Monday, April 10, 2006 at 12:52 PM | Permalink