It's even worse: The real wages not keeping up with productivity, I don't think is only because of mendacious CEOs but because that productivity is going to pay off benefits and pension plans of the previous generation, so not only are they telling us to 'suck it up' but they're leeching off of us.
Then there's systematic debt, like sovereign debt, social security, medicare, which we're 'legally enjoined to pay off somehow'. Well, we could pass the buck on that one, if the overleveraging of society doesn't cause another economic realignment that burns our generation in our old age, just as it burned us as we were seeking jobs.
> The real wages not keeping up with productivity,
Total employee compensation does (i.e. you have to include taxes, benefits, etc.). It's easy to see why - if someone produces way more than they cost, then employers will be lining up to hire them.
It's like as if you could buy widgets for $.10 and sell them for $1.00. You'd buy as many as possible!
>if someone produces way more than they cost, then employers will be lining up to hire them
Not someone who buys into efficient markets in labor (or anything really): I don't think that's true. The cost of additional employment can be burdened by other things (human resources expenses, compliance) times the risk that the employee is a dud. These can increase the 'activation barrier' inherent into adding a hire. And what if you only need one widget? You wouldn't buy as many as possible at all, because the rest will just be dead weight.
You're right that what matters is the cost of the employee to the employer, which wages form only a part. But if the employee productivity far outpaces that, then they'll be hiring, which will bid up those wages.
> You wouldn't buy as many as possible at all, because the rest will just be dead weight.
As I said, "if you could sell them for $1.00", which is not dead weight. Any merchant badly wants widgets that can be sold for 10x cost. Heck, I'd even start a reselling business if I could find such a product!
well, sketchiness of the metrics aside, the 75% more productive is an average value, not a median value (or a mode), so not all labor will yield "1.75x cost"...
It also has to do with increased global competition. In the wake of World War II, much of Europe and Asia was destroyed and in turmoil and had a lot of rebuilding to do. By the 1970s and 80s many countries had caught up and started seriously competing with the US in things like automobile manufacturing.
Then there's systematic debt, like sovereign debt, social security, medicare, which we're 'legally enjoined to pay off somehow'. Well, we could pass the buck on that one, if the overleveraging of society doesn't cause another economic realignment that burns our generation in our old age, just as it burned us as we were seeking jobs.