The Paradox of Capitalist Regulation

James Schipper writes in the comments section:The historical record shows that wage increases eventually follow productivity growth. For instance, in 1960 South Korea was dirt-poor, and naturally wages were extremely low. By 1990, SK had become a prosperous country, due to massive productivity growth, and wages were also much higher.As workers become much more productive on average, they become more valuable to employers, who are therefore willing to pay them higher wages, for the same reason that a dairy farmer is willing to pay a higher price for a cow which gives 10,000 liters of milk per year than for a cow which gives 5,000 liters per year.It seems to be true that wage increases in the US have not kept pace with productivity growth in the last 3 decades. I have no explanation for it.It can't be doubted that the... [read full story]