Comments about ‘Letter: Declining GDP share’

Return to article »

Published: Monday, May 26 2014 12:00 a.m. MDT

Updated: Sunday, May 25 2014 10:10 p.m. MDT

Comments
  • Oldest first
  • Newest first
  • Most recommended
Hamath
Omaha, NE

Good points brought up here. Thanks.

Curmudgeon
Salt Lake City, UT

Just a hunch, but I'm guessing the decline in wages as a share of GDP is closely correlated with the decline in labor union participation and effectiveness over the same time period, beginning with the union-busting Reagan administration. Does anyone doubt that is why Republicans have been so intent on emasculating unions?

Thanks for the letter, Roland.

Roland Kayser
Cottonwood Heights, UT

One minor correction, my letter said that labor share of GDP has dropped into the mid 50% range, which is not quite the same as the 50% range as was published.

Tyler D
Meridian, ID

Thank you for your informative letter Roland.

However, I doubt this is the result of a conspiracy (which would mean a global scale). Rather, it is simply business chasing low wage production anywhere around the world they can find it, and the laws on our books that make doing so even more beneficial.

Adam Smith did warn against employer collusion, but he also said laws pertaining to business should generally favor the workers.

We were an Adam Smith nation early on and for much of the past century, but over the last 40 years or so we have become an Ayn Rand nation.

The Real Maverick
Orem, UT

I agree with everything but the final line, "on a global scale."

Not true. Here are many countries who still fight for their middle-class and aren't just handing everything over to the 1 percent.

Australia, Canada, and many European countries still maintain policies that protect their working classes. It's just unfortunate that the United States has sold it's working class out. The long term effects are devastating.

Mike Richards
South Jordan, Utah

Is the decline in wages the fault of the employer or is it the fault of government? Those who advocate "sharing" the wealth must surely know that when taxes increase, businesses fail for lack of capital. There are many millionaires who have little or no cash.

I have a customer whose business is valued at more than $4 million - on paper. The actual value, if he were to sell off equipment and the building would be somewhere near $100,000. That would be his "reward" for providing jobs to hundreds of people for over forty years.

Every business owner that I know sacrificed to scrape together money to start a business. Everyone of them borrowed against their own home to pay employees during lean times. Not one of them has a retirement account outside of Social Security even though they all paid in millions to Social Security as their portion of their employees Social Security "donation".

Too many people, who have been paid a wage, think that they are also entitled to profit sharing. Would they share the "losses" with their employers?

ECR
Burke, VA

Thanks Roland, for providing imperial evidence of the facts rather than just stating your opinion. And Curmudgeon makes an excellent point about the decline in union membership. It also interesting to note the date of 1980 as the beginning of the decline. Think about the events in our country during that time.

Kent C. DeForrest
Provo, UT

As usual, Roland is right. The consequence of this shift isn't just that more Americans are struggling to make ends meet, but that the consumer classes don't have enough disposable income to buy all the products that the big corporations need to sell to stay in business and provide jobs for American workers. It's a vicious circle that does not have an up-side. So, despite denial on the Right, the supply-side ethic we've been following since Reagan is not just hammering the middle and lower classes; it is creating economic conditions in which the upper class will also soon start a rather rapid decline.

The answer is not redistribution through progressive taxation, though that is important. The answer is to give workers a share of ownership, so that they share directly in the wealth they create.

Schnee
Salt Lake City, UT

@Mike Richards
"Is the decline in wages the fault of the employer or is it the fault of government? Those who advocate "sharing" the wealth must surely know that when taxes increase, businesses fail for lack of capital. There are many millionaires who have little or no cash."

If wealth inequality isn't changing or changing only a little you could say gov't. However it's increasing rapidly.

There You Go Again
Saint George, UT

"...when taxes increase, businesses fail...".

During FDR taxes were as high as 90%.

Reagan dropped the rate to 28%.

Taxes have dropped from 90% to 28%.

The only thing disappearing as a result of Reagan supply side economics is the middle class.

red state pride
Cottonwood Heights, UT

How about the income disparity between private sector and public employees? What about the cities (and soon to be States) that are bankrupt because of public employee pensions e.g. Detroit, Mi and Stockton, CA?
I noticed Mr Kayser didn't mention standards of living now compared to the 1980's or earlier. Like how even our poorest families have smartphones, cars, microwaves, cable television etc etc.
But if income inequality is something you lose sleep worrying about then you can always buy stock in a public corporation e.g. Walmart, Zions Bank, Ford, McDonalds etc. Then you can go to shareholder meetings and voice your concerns. It is a free country (allegedly).

Twin Lights
Louisville, KY

Adam Smith?

What does he know about free markets anyway?

Shaun
Sandy, UT

@Mike Richards. I agree with you to a certain point.

My friend works for a trucking company. He makes $75k a year. The owner of the company makes $75k a year. During the height of the recession they needed to hire a receptionist and could of easily found one for $8 an hour. His boss told my friend to pay them $16 an hour.

The owner provides matching 401k and healthcare. He just installed a gym at the shop and put 25k worth of workout equipment in it. He bought season tickets to the Jazz and lets the employees use them.

I could go on but the point is, this trucking company is a small business. It is growing and thriving and I think it is because the owner values his employees. He could easily cut everybody's pay and make more money for himself.

If more company's valued their employees there wouldn't be any talk about redistribution or the %1. If more company's valued their employees this economy would be thriving.

wrz
Phoenix, AZ

Well, let's see... the decline in wages started about the time illegal immigration got in full swing... about the time that Reagan gave amnesty to millions of illegals in 1986. My guess would be that US wage decline as a percentage of GDP has its origins in cheap labor (legal and otherwise) coming into this country.

And why was illegals allowed to pour in? Lack of government enforcement of immigration laws. And that would include Administrations from Reagan to the present, Barack Hussein Obama and his right-hand law enforcement guy, Eric Holder.

I think the author of the article is blaming the wrong cause.

louie
Cottonwood Heights, UT

Very good article. It should also be noted that the tax revenue rate has not changed in that same period of time, suggesting that the lost margin for labor must be an increase in the profits of companies and corporations. Nevertheless you have people like Bob Bennett who opine that you need more wealth or profits before one we consider minimum wage or any higher taxes on the wealthy. We need republicans to look more objectively at our history and at the facts in order to solve the sagging middle class problem.

The Real Maverick
Orem, UT

@ wrz

If repubs are so anti-illegal immigration then why don't they propose throwing employers who employ illegally and thumb their noses at our laws, into prison? Why do they only propose deporting illegals (which is impossible anyway. But it gives the "impression" that they're tough on immigration. More smoke and mirrors).

If we deport all the illegals today then they'll be back tomorrow. But if we "deport" all the illegal employees to prison today then illegal immigration will be a thing of the past tomorrow.

wrz, if you really care about illegal immigration then why not tackle it at it's origin, employers who have bought off repubs and love cheap labor?

marxist
Salt Lake City, UT

Re: Mike Richards "Every business owner that I know sacrificed to scrape together money to start a business." Very true, but it is still true that the percentage of GDP going to capital is increasing, and the percentage going to labor is decreasing. This, alas, fits Marx's model quite nicely. If capitalism can't fix this, it is done for.

Twin Lights
Louisville, KY

Mike Richards,

There are plenty of businesses (even small ones) where the sacrifice and scraping was done a generation or two ago. Those running it now never sacrificed a thing. So that argument is only partly true.

Every business is worth more as an operating entity than in a fire sale of assets. Even selling the whole business, the market value has little to do with the book value.

True that employees do not fully share the losses. But they are definitely at risk when a business loses money. I know many who lost jobs at the tail end of a career and could never find appropriate employment (age discrimination). They certainly bore some risk for their employer.

wrz
Phoenix, AZ

The Real Maverick:
"If repubs are so anti-illegal immigration then why don't they propose throwing employers who employ illegally and thumb their noses at our laws, into prison?"

That's Eric Holder's job... and Reno's, Ashcroft's, Gonzales's, etc., etc.

Besides, Repubs and Demos alike are scared spit-less that they'll lose substantial Hispanic votes should the do anything untoward the illegals.

"Why do they only propose deporting illegals (which is impossible anyway. But it gives the 'impression' that they're tough on immigration. More smoke and mirrors)."

Well, Romney proposed that illegals deport themselves through enforcement of E-Verify... and look what it got him.

"If we deport all the illegals today then they'll be back tomorrow."

I guess we should let 'em stay but don't give 'em any benefits, like SS or any kind of welfare. And for sure don't let them vote... enforce voter ID.

"wrz, if you really care about illegal immigration then why not tackle it at it's origin, employers who have bought off repubs and love cheap labor?"

Repubs love cheap labor and Demos love the Hispanic vote.

Open Minded Mormon
Everett, 00

Mike Richards --

Government doesn't need to be involved.

That's WHY we had Unions back then.

FYI --
When Unions [by the people] are busted,
Government [by the people] is the course of last resort.

to comment

DeseretNews.com encourages a civil dialogue among its readers. We welcome your thoughtful comments.
About comments