Reply to Turns Out Americans Actually Do Want to Tax the Rich

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote]the US is *EXCEPTIONALLY* good at increasing the productivity of, as evident through our GDP. [/quote]

Wage growth is trailing productivity growth by a LOT. Starting around 1980. Why do you think that is? [/quote]

^^^
Link for above: https://www.epi.org/productivity-pay-gap/[/quote]

Thanks for the link, it actually shows that the divergence started in the early 70s, say around 1973. So here's a graph that should be interesting to you:

[img]https://www.migrationpolicy.org/sites/default/files/datahub/thumbnail-US-ImmNumberShare.png[/img]

The sharp rise is due to the 1965 Immigration and Nationality Act, which greatly increased immigration into the US starting in the early 70s, exactly the point where you started to see wage stagnation. Since 1965, immigration and their descendants have accounted for about 55% of the US population growth. Also significant is the increased female workforce participation during the same period, rising sharply in the 70s and 80s:

[img]https://3.bp.blogspot.com/-Wo5A6xV_7HQ/WfM6JQckYTI/AAAAAAAAIfE/dg5V2R9e3aQd6sEU3idtVDrgLeFG_iVyACLcBGAs/s1600/women%2B5.jpg[/img]

The combination of dramatically increased immigration and women workforce participation produced an abundant supply of labor, which kept wages stagnant during the same period of time. The logic is simple if we use the income approach for GDP calculation:

GPD = Workers x Wages

If GPD grew but Wages was stagnant, that means the number of workers grew.

Note that I am not saying it is wrong for the US to take on immigration, or that it is wrong for women to enter the work force. It's in fact a strong argument that the influx of immigration and women into the labor force is one of the key drivers of US GDP growth, because the flip side of stagnant wages is that it has kept the price of goods and services low, making the US more competitive in the global market. But we must not ignore the facts, which are that the result is also stagnant wages. [/quote]

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