David Henderson ponders the stats that show that labor’s share of U.S. national income has fallen in recent years – and in doing so finds that one significant reason is a change (starting in 2001) in the way the Bureau of Labor Statistics classifies income earned by business proprietors . (In addition to reading David’s post, be sure not to miss the comments on the post by Kevin Erdmann.)
Speaking of ‘labor’s share,’ Evan Soltas disputes the conclusion drawn by researchers at the Economic Policy Institute that worker pay has failed in recent years to keep pace with worker productivity . (HT Michael Strain)
In my most recent column in the Pittsburgh Tribune-Review, I review some of what I teach in my Principles of Microeconomics class at George Mason University . Here’s the first part of my column:
The school year has started! Each semester, I introduce an auditorium full of freshmen to economics. Teaching this class is the most rewarding task that I perform professionally. Nothing else comes close.
Unlike many economists who today teach such a class (commonly called “Principles of Microeconomics”), I aim less to familiarize my students with jargon and mathematical techniques than to give them a perspective on reality that only a solid grounding in economics offers.
This grounding begins with the recognition that today’s world is vastly different from the world in which nearly all pre-industrial human beings lived. I start my class by telling my students that each one of them is among the top 0.001 percent of the wealthiest people who ever lived. The difference in the material standard of living of my students from that of Bill Gates is minuscule compared to the difference in the living standard of my students from that of their pre-industrial ancestors.
Although it’s politically incorrect to observe, the fact is that modern capitalist societies have eliminated absolute poverty.