Heidi Moore does it again

Yup, glaring evidence of not quite knowing what she’s talking about:

Labor’s share of income measures the percentage of corporate profits that go to pay wages to employees – as opposed to enriching shareholders and other owners.

In 2013, labor’s share of income fell to 72.7%, according to the Economic Policy Institute. In the first half of 2014, however, the number spiked up.

No, just no.

The labour share of income is, as the EPI has measured it here, the share of corporate income, not profits, that goes to labour. As, actually the EPI report itself says:

The figure below shows a particularly stark measure: the share of corporate sector income accounted for by workers’ wages and benefits.

Obviously, I know that you don’t need to know much economics to write for The Guardian but not being able to understand what you’re copying out is still pretty bad.

6 comments on “Heidi Moore does it again

  1. With more productivity through the use of capital, we might expect a fall in income and benefits as a proportion of corporate income.
    Old machine uses 10 unskilled workers to create 100K of income; said 10 people get 50%; so 50K (5K person).
    New machine uses 1 person (better skilled) to create 100K; said 1 person gets 10K, Labour share of income goes from 50% to 10%. Skilled worker earns 2 x what unskilled worker did and is rewarded for his skill.
    Those employed are not worse off; just fewer employed! Maybe we can get to Keynes promised land after all: riches for all and not much work (if any)!
    Labour share of income is a nonsense for indicating who gets what from economic activity in a technologically evolving environment where labour use for generating a particular level of income is both different between types of corporate activity and across time.

  2. I have noticed widespread confusion… well ignorance… of the difference, or that there is a difference, between income (or revenue) and profit. And that is before we get into gross v net profit.

    Hence the idiot-call for corporation tax on income or revenue and why its is a ‘scandal’ and ‘immoral’ that Company X has revenues of Y hundred billion, but pays only a paltry or no tax.

    Is it time to start teaching basic economics and business/profit and loss to the 5 to 11 age group, then we could do competitive free market capitalism and why we don’t still all grow and live off turnips in secondary school?

    And included would be the stark fact that investors put their money into businesses to make a return, not to act out Mother Teresa fantasies to help the poor and deserving and provide jobs.

    There would have to be remedial classes for most politicians and almost the entire Commentariat.

  3. “time to start teaching basic economics and business/profit and loss to the 5 to 11 age group”

    Who does the teaching? People who read the Guardian and agree with it, that’s who. At the school level, teachers are the very last people who should be entrusted with conveying economic ideas.

  4. Yes I take TWs “it doesn’t show what you think it shows Heidi” point. But I’m none the wiser what we labourers are to make of it.
    Heidi’s underlying criticism relies, once shown a share of something, on the instinct to think what a ‘fair share’ would be. Upon that is the reasoning it must be absurd to think that the current figure can be the fair share. Therefore comrades let us do something about it.
    Before I support that I really would like to know why a lower share is ;bad’ and a higher share good.

  5. @ Bloke in Costa Rica et aL
    50 years ago, education jobs were advertised in TheTimes Educational Supplement (which was utterly non-political – I had not even heard of Murdoch) – New Labour decided to advertise all teaching jobs in the Guardian. This had two benefits for the left – a massive subsidy from the state to a left-wing propaganda paper and only hiring those who read The Guardian.

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