Low labor share has created a constraint on productivity, output and employment.
written by Edward Lambert, July 17, 2013 1:56
I suppose a falling labor share will eventually take the economics profession by surprise when they realize its effects. My own work into effective demand has opened my eyes to economic constraints that others are not seeing.
Basically, real GDP has a constraint of $14.1 trillion if counter-measures are not successful.
Unemployment has a constraint of 7.0%.
Productivity is constrained by effective demand.
Unless we find a way to raise labor share, the economy will stay weak for a long time.