The most important economic chart you've never seen

Sometimes economists (even lefty economists) are very frustrating. They tend to operate in extremely abstract terms, and often miss the fact that the import of their analysis is being missed by the vast majority.

The following chart is probably the most important chart describing the economic fate of labor over the past 40 years, and yet it is never shown in this form. I had to assemble this chart myself - although the data is fairly accessible (at least as far as economic data goes). Click to see full size.

So what is this chart showing?

Upper (red) line = (Net Domestic Product) ÷ (Employment)
Lower (blue) line = (Average Non-Supervisory Compensation per Hour) x (Average # of hours worked)

What does this mean?

The upper line shows the average market value of production in the U.S., ie how much the average worker contributes to the economy.

The lower line shows the average distribution to wage and salary workers not in supervisory positions.

The gap between these two lines shows how much goes to profits, rents, management etc.

In other words, it gives us an approximate sense of the level of exploitation, ie what kind of incomes could the economy support if distribution was equal.

Wonder why economists tend not to show these figures?

Wage Theft Resources from NELP

Just got this in the mail from NELP - think it's worth reposting:

A defining feature of too many jobs in our 21st-century economy is wage theft.

Wage theft occurs when workers are paid less than the minimum wage or another agreed-upon rate, work “off-the-clock” without pay, get paid less than time-and-a-half for overtime, have their tips stolen, have illegal deductions taken out of their paychecks, are misclassified as “independent contractors” instead of employees, or are simply not paid at all.

It’s a trend that spans industries across the economy, including retail, restaurant, home health care, domestic work, manufacturing, construction, day labor, janitorial, security, dry cleaning, laundry, car wash, and nail salons.

And it’s a practice that hurts not only workers whose wages are short-changed, but local economies that are fueled by workers’ spending, and well-meaning businesses that are forced to compete with wage cheats that shave their operating costs by breaking the law.

Luckily, there’s another trend – a wave of grassroots energy and campaigns on the state and local levels to ensure that workers get paid the wages they're owed.  From California to Arkansas to Florida to Maryland, workers and their allies are organizing to pass – and defend – policies that help workers receive their lawful wages, level the playing field for law-abiding businesses, and boost the economy at the same time.  

To support these campaigns, in January 2011, NELP released “Winning Wage Justice,” a comprehensive guide outlining 28 state and city best-practice policies that community groups can implement to fight wage theft.

Continuing our “Winning Wage Justice” series, NELP is pleased to share these new publications:

• A Summary of Research on Wage-and-Hour Violations in the United States
• Talking Points on the Need for Stronger Anti-Wage Theft Laws
• Choosing the Policy Options Right for Your Community
• Round-up of Recent State and Local Activity to Combat Wage Theft

Especially in today's economy, it's critically important to protect the fundamental right to be paid for the work that you do.  We hope these publications prove useful in your campaigns and your work!