Sorry Polly, but you’re wrong here

Any analysis of the British economy over the past 40 years shows how the decline of union power since the early 1980s has coincided with the fall in the proportion of GDP that goes to pay, and the rise of profits.

No Polly, sorry. That’s not what happened.

The profit share is about where it was in 1950. Self employed income has risen. Taxation of consumption has risen. And it’s those last two that have led to the fall in the labour share.

Within the labour share the increase in employers’ social contribuitions near exactly matches the fall in the wage share (the two, plus any other benefits paid to workers, make up the labour share).

It simply isn’t true that the wages have fallen because the profits have risen.

8 comments on “Sorry Polly, but you’re wrong here

  1. “It simply isn’t true that the wages have fallen because the profits have risen.”

    Always, Polly she revisits the wrong indicators and symptoms, always…… from the wrongheadedness of a champagne Socialista.

    Is it a crass financial illiteracy? Or more simply, an unwillingness to face up to the harsh truth of market economics and the things she loves….. big government ‘investment’ euphemism for Socialist monetary and fiscal profligacy.

    And where does it – ‘government monies’ come from?

    Ah by thus levying tax – which impinges on all our lives – makes all our lives a misery but particularly the lives of the less well off. In that, secondary taxes and ‘sin taxes’ proportionately affect those least able to afford them.

    Oh, and the other thing that shall not be mentioned – unit costs. Wages stay low because of a myriad of factors not least everything to do with computerization/cybernetics etc but the other thing is of course – mass immigration provides an unending source of cheap and plentiful labour and thus unit costs are minimized.

    But then reality never knocks of the doors of Ivory Towers; Notting Hill, Islington, Primrose Hill and Hampstead.

  2. There was one poor bloke who took to fisking PT, he set up a website “Factchecking Pollyanna”. I think he gave up as it was just too much work.

  3. About right. Just about to release that site, plus my own conteporaneous comments on Polly’s oevre, as an ebook. Yes, I do have the rights to that site….

  4. “Sorry Polly but you are wrong HERE????”

    The silly cow has made being wrong a recognised way of life .

    If she was Japanese she could be credited as Soke of the Zen art of the bullshit balls-up. Not merely a “jitsu” or body of technique but a true “Do”–a way to anti-enlightenment.

  5. “Sorry Polly but you are wrong HERE???” Seconded.

    You’d save yourself a lot of work, Tim, if you confined yourself to noting those occasions when she’s right.

    Polly doesn’t have an erroneous zone, she’s just wrong all over.

  6. Tim,
    I don’t have the data to hand any more, having moved house twice in the last thirty years, but I strongly suspect that if Polly had only said “since the late 1970s” she might have been right. I do remember that Wilson’s economic policies and regulations in the mid-70s resulted in many companies making losses on any realistic accounting basis (Replacement Cost Accounting or even just applying LIFO to stocks of materials). So the fact that profits are now positive is partly as a result of the decline in union power.
    [Healey’s “stock relief” for tax principally benefited supermarkets who got tax relief for stock that they hadn’t paid for.]

  7. Since the mid-70s you’re correct. But then it’s the mid-70s which were the aberration.

  8. @ Tim
    Not just an aberration but a completely unsustainable one.
    That is why Polly and her ilk always pretend that is is a natural choice of reference point “the last forty years”, rather than face questioning about their carefully selected base.

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