Between 1975 and 2007, the share of wages in national income fell from 65% to 54%, while escalating inequality within that smaller share has meant stagnating real wages for low and average earners.
A central factor in the shrinking slice of the economic cake going to workers – which helped lay the ground for the crisis of 2007-8 by fuelling personal debt – has been the weakening of trade unions,
As even Brendan Barber agrees, the mid-70s position was not sustainable. So we should start at 1980.
And the fall in the labour share of income has not been explained by weak unions nor increasing profits. Rather, by the rise in VAT and a rise in self-employment.
I\’m afraid that this is another one of those fake statistics that will be bandied around the political arena for years to come. And it\’s one that needs to be killed: not because it is politically opportune for idiots like Milne, not because it reflects badly on the sort of policies I like either. But simply because it is wrong.