The wage-productivity gap in the G20 (2 graphs)

from David Ruccio

 

According to a new report jointly issued by the OECD, World Bank, and the International Labor Organization, “G20 labour markets: outlook, key challenges and policy responses” [pdf], the gap between the growth of productivity and the growth of real wages started long before the most recent crisis and, apart from a short reversal during the depth of the crisis (when productivity fell), has continued to widen since 2010.

One of the consequences of that growing gap is a “substantial and widespread” decline in the labor share of national income.

Together, the wage-productivity gap and the declining labor share are a cause of the current crisis and a consequence of the kind of recovery that has been enacted in the years since the crash of 2007-08.