http://money.cnn.com/2013/03/07/news/economy/compensation-productivity/index.html?iid=SF_E_River
The gap between productivity and hourly compensation for workers is the lowest it has been since WWII, which has been one of the major dividers in income inequality. Productivity has grown 80.4% between 1973 and 2001, while there has only been a 10.7% growth in median hourly compensation. The decline in union power and the national deregulation has led to this income gap. Additionally, because unemployment is around 8%, workers feel lucky to have a job and do not want to ask for a raise. However, hourly compensation does not include worker benefits and some believe that as the economy recovers this gap will decrease. I think this article relates to what we talked about in class with the shareholder and stakeholder interests.
The gap between productivity and hourly compensation for workers is the lowest it has been since WWII, which has been one of the major dividers in income inequality. Productivity has grown 80.4% between 1973 and 2001, while there has only been a 10.7% growth in median hourly compensation. The decline in union power and the national deregulation has led to this income gap. Additionally, because unemployment is around 8%, workers feel lucky to have a job and do not want to ask for a raise. However, hourly compensation does not include worker benefits and some believe that as the economy recovers this gap will decrease. I think this article relates to what we talked about in class with the shareholder and stakeholder interests.
2 comments:
5. Increases in productivity may also be due to advances in technology rather than the actual worker. While productivity is seen as the marker for what wages should be set at, this is not always the case. In Labor Economics we discussed how having a college degree should show increased productivity and thus higher wages; but in reality, the higher wages seen after receiving a degree are actually due to the fact that employers know that those individuals are willing to work harder than those without a degree, whether or not the job puts to use the actual knowledge learned in college.
It would be very interesting to see the productivity and the wage rates for Germany during this time. As we saw in class, German workers are seen as both shareholders and stakeholders. I agree that the worker wage and benefits will increase as the economy recovers. Does this productivity take into consideration more efficient technology? It would be interesting to see if workers productivity would increase if they earned more? If workers earn more and are treated better, they may be more efficient.
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