The other day I ran this chart showing how the labour share of income (“compensation of employees” in national-accounts-speak) had changed in New Zealand over recent decades.
It isn’t data I usually pay any attention to, and I was somewhat surprised by the trend increase since around 2002.
And then I was reading a Financial Times article about last weekend’s Jackson Hole retreat for central bankers (perhaps including Graeme Wheeler) and assorted other eminent people. The journalist mentioned that one prominent Asian central banker had warned that a declining labour share of income around the world could make problems for central bankers (the idea being that workers – especially low income ones – tend to spend most of their income, and demand shortfalls are a potentially serious issue, especially when the next recession happens). And that left me wondering just how unusual New Zealand’s experience – a…
View original post 768 more words