There has been a huge amount of talk recently about the share of profits and wages in GDP. Many point to the fact that US wages as a share of total income are at the lowest level since.....Even if we take total compensation it appears that capital has gained an increased share.
Brad DeLong and Krugman suggest that the balance of power has shifted against labour and that this is part of the rightward shift in the US.
DeLong comments on inequality
Chris Dillow has a more nuanced view.
Stumbling and Mumbling: Some profits arithmetic
If we look at the share of wages and profits in UK GDP, they are pretty stable. There is a structural shift around 1945, presumably because of the introduction of the welfare state etc. However, if the shares shift too far, I would think that there is a natural mechanism to bring things back into equilibrium. At the moment, US consumer spending is relatively high compared to compensation. This will correct - either spending will fall or wages will rise.
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