Shareholder Power and the Decline of Labor

{{ The result is more pronounced in industries where labor is relatively less unionized, in more monopsonistic local labor markets, and for dedicated and activist institutional shareholders. The labor losses are accompanied by higher shareholder returns but no improvements in labor productivity, suggesting that shareholder power mainly reallocates rents away from workers. Our results imply that the rise in concentrated institutional ownership could explain about a quarter of the secular decline in the aggregate labor share.

This reads like a summary of US history over the past 45-50 years. The “Reagan tax cut miracle” was convincing working class folks that trickle-down economics for going to do anything to help them.



Now they are demanding the money, benefits, etc they were promised. And they are not going to work without it.


And they are called “Communists” for their trouble.


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They don’t care. Cash talks. Everything else walks.

The “Commie” narrative can sway voters, just like styling union Presidents as “bosses”, like they were gangsters, and crying about union workers earning “better than average pay and benefits”.



< chuckle > < chuckle >

The workers–who will not work for less than what they want–don’t care. They are not running for political office. The employers will be missing/without workers unless they pay what the holdouts demand. No (or too few) workers = no (or greatly reduced) production = losses or greatly-reduced profits. Workers can choose to work elsewhere–even move away (thus reducing the number of available workers and making it even harder for the employer to find employees). Most people moving TO the area will not move unless they have a job they can start–which, again, requires the employer to pay what the employee wants or do without. Been through that. In the mid-1950s, my father had an offer of a job in NJ. We moved from MN to NJ on the strength of that offer. He worked one year. He was supposed to get a boost in pay the second year. The employer said “that is not allowed”. So he got another job elsewhere and left the original employer with an unanticipated vacancy.

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