ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Wage Suppression and Wage-rentierism

The surplus value created by non-supervisory workers is typically understood as captured by firm owners and shareholders (that is, as capital income). The surplus value created by non-supervisory workers is captured largely in the form of compensation for high-level executives, and that this capture explains a greater share of wealth inequality than increases in capital’s share of income.

It is increasingly well known that United States (US) productivity and (non-supervisory) wages have diver­ged since 1973 (Bivens and Mishel 2015). After moving in tandem since at least 1948, its net productivity grew at eight times the rate of inflation-adjusted compensation for the median worker (72.2% growth against 8.7% growth). For every dollar that median workers earned in pay raises, they produced about $8.29 in value. This article seeks to understand where that extra value has gone. I argue that the traditional story, which posits that worker’s increased productivity has been captured in the form of capital income, is incomplete because it relies upon a partial view of the compensation’s relation to productivity.


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Updated On : 2nd Jan, 2023
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