The Guardian’s Greg Jericho has penned an interesting piece today calling for policy makers to focus their efforts on better redistributing the wealth gained from globalisation to poorer workers made worse-off.
The article, which draws on a lecture from the World Bank’s former chief economist, Professor Kaushik Basu, includes the below charts showing the shocking decline of national income going to workers:
…for Basu, one of the most stark ways it [inequality] is manifested is the declining share of national income going to workers.
This decline is something that has occurred across most developed nations since the mid-1970s, but the drop in Australia is among the most marked.
In 1975 two thirds of our GDP was in the form of wages; in 2014 it was just 53%:
Not surprisingly such a shift has also seen real wages flatten, even while labour productivity improves:
…[Basu] argues the way to respond to the declining share of wages due to globalisation and automation is for both an open economy (which is good for GDP growth), but also that governments must “think of some form of redistribution so that workers get their income shored up”…
He also argues that this redistribution of income should also “take the form of better services likes health and education.”
For mine, this article does a far better job of explaining the underlying factors behind Brexit, Trumpism, and Hansonism than the “angry white men” rubbish spouted by Jessica Irvine yesterday.
It’s about the hollowing-out of the working/middle classes who have been largely left behind by the globalist agenda. And it’s happening here as well.