The data published by the Office for National Statistics show that at the end of 2015, workers’ share of gross domestic product (GDP) sank to 49.7% (see Table D on page 44 of the PDF file downloadable from here), compared with 65.1% in 1976. This is the biggest rate of decline in any western economy. Proponents of neoliberalism claim that workers’ low share of the GDP is the outcome of market forces.
Not really quite sure what “the workers’ share” is. We don’t usually measure GDP in that manner. However, to get to his 49.7 % in Table D he means total compensation, or the labour share of GDP. Note this is not the wage share but the labour share (ie, includes NI etc).
And back in 1976 this was 57% or so of GDP (look up YBHA and DTWMJ here.)
So, not sure what he’s doing at all. Could be that I’ve got it wrong so, if someone who is rather more au fait with the ONS site would like to check my numbers?
It’s also wrong to call the labour share the workers’ share anyway. Other income (17% of GDP or so both times) includes the incomes of the self employed….
As to what has actually changed over time. The low capital share back then is known to have been unsustainable. Not enough to cover depreciation near enough, let alone produce profit. So, it’s right that it has risen from 16% to 21%. Which is about long term average. What Prem is doing here is comparing to a time when that capital share was unusually low but presenting it as the norm.
The other big change is taxes and subsidies on production, from 7.7% to 12% of GDP. That’s essentially the rise in VAT over these decades.
As to the actual point that Sikka is trying to make, he’s claiming that Corbyn will take us back to those halcyon days of the mid-70s.