­Let them eat cake - how the workers' pie keeps shrinking

Ross Gittins
Business Day, June 2 2007

" When you divide the pie of national income between the share going to wages and the share going to profits, you find the workers' share keeps shrinking and is the smallest it has been.
If you already knew that, congratulations. You are exceedingly well informed – because that startling fact has received minimum publicity.
If the boot had been on the other foot – if it had been the profits share that was shrinking – you would never have heard the end of it. But when it is just the workers' share, economists are not all that fussed.
If we focus just on the " total compensation of employees" (which includes employers' superannuation contributions on their behalf) and "total gross operating surplus of corporations" ( the main national accounts measure of profits), we find that, in 1999-2000, the share of national income going to labour was 70.3 per cent, leaving the share going to capital at 29.7 per cent. But by the December quarter of last year, the wages share had fallen to 66 per cent while the profits share had increased to 34 per cent.
That is a shift of a remarkable, unprecedented 4.3 percentage points in just 6 and a half years….
…by the end of the 80s, the Hawke/Keating government had used its Accord with the unions to bring about a fall in real wages and get real wages and productivity back in line….
…in the noughties, however, there has been a remarkably rapid decline in the wages share, to the benefits of the profits share...
…if the wages share is falling, workers are not getting their proportional – their "fair" – share of productivity gains…"