This is only a Preview!

You must Publish this diary to make this visible to the public,
or click 'Edit Diary' to make further changes first.

Posting a Diary Entry

Daily Kos welcomes blog articles from readers, known as diaries. The Intro section to a diary should be about three paragraphs long, and is required. The body section is optional, as is the poll, which can have 1 to 15 choices. Descriptive tags are also required to help others find your diary by subject; please don't use "cute" tags.

When you're ready, scroll down below the tags and click Save & Preview. You can edit your diary after it's published by clicking Edit Diary. Polls cannot be edited once they are published.

If this is your first time creating a Diary since the Ajax upgrade, before you enter any text below, please press Ctrl-F5 and then hold down the Shift Key and press your browser's Reload button to refresh its cache with the new script files.


  1. One diary daily maximum.
  2. Substantive diaries only. If you don't have at least three solid, original paragraphs, you should probably post a comment in an Open Thread.
  3. No repetitive diaries. Take a moment to ensure your topic hasn't been blogged (you can search for Stories and Diaries that already cover this topic), though fresh original analysis is always welcome.
  4. Use the "Body" textbox if your diary entry is longer than three paragraphs.
  5. Any images in your posts must be hosted by an approved image hosting service (one of: imageshack.us, photobucket.com, flickr.com, smugmug.com, allyoucanupload.com, picturetrail.com, mac.com, webshots.com, editgrid.com).
  6. Copying and pasting entire copyrighted works is prohibited. If you do quote something, keep it brief, always provide a link to the original source, and use the <blockquote> tags to clearly identify the quoted material. Violating this rule is grounds for immediate banning.
  7. Be civil. Do not "call out" other users by name in diary titles. Do not use profanity in diary titles. Don't write diaries whose main purpose is to deliberately inflame.
For the complete list of DailyKos diary guidelines, please click here.

Please begin with an informative title:

If you've been reading Paul Krugman for the last few days, you know that he's latched onto the issue of the changing distribution of income between workers and owners.

He admits that he and other economists were basically blindsided by it, and I'm sure we can look forward to much fruitful discussion in the days to come. It could be one of the more important developments in economics in quite some time.

Below is a summary with some thoughts. It's pretty interesting, and a little frightening…


You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

Apparently it was all triggered by a recent spate of articles about how companies (notably including Apple) are "re-shoring" manufacturing jobs to the U.S. Then someone pointed out that most of the work will actually be done by robots, and the number of good, new jobs for humans will be limited.

Professor Krugman got hold of the story, and his first take was "Whoa, this whole trend has gone completely under my radar—and everybody else's too." But he has the bit in his teeth now, and has pronounced this a crucial issue. Over the last few days he's published a series of blog posts on it, the latest of which is linked here (and I'm sure we can expect more). I encourage you to read the others if this interests you.

The basic story is that, since the start of the Reagan Era, the share of income going to workers—as opposed to owners—has been declining, from an average of about 65% to today's 57% (see Krugman's second chart). And lately, the decline has been accelerating.

This wasn't supposed to happen. Talented people could always improve their lot by better education. But as Krugman's first chart shows, this "college wage premium" is leveling off. So much for the tale that politicians love to tell about how education is the key to success.

Also, improvements in productivity (such as made possible by better machines) were supposed to lead to a higher standard of living for workers. We know that this hasn't held true lately, but nobody really set about trying to explain why. In an earlier post, Krugman revived an old mathematical model to show that if robots increase worker productivity enough, it can actually lead to declining wages (which is pretty much what we're seeing), with the difference going as extra profit to the people who own the robots (which is also what we're seeing).

If this all reminds you of a certain radical political philosophy that starts with "M", you're right. As one comment I read said: "Marx wasn't wrong, just early."

In any case, it looks to me like this could become the defining issue for economic arguments for the next few years. It will test the cherished beliefs of both Democrats and Republicans. (Of course, being totally wrong has never stopped Republicans: after all, they're still telling us that tax cuts pay for themselves and tax increases destroy jobs.)

There are all sorts of interesting side issues, too. For example, if wages keep going down, who's going to be able to afford to buy those great, robot-built products? (Robert Reich's signature issue) And if there simply aren't enough jobs to go around, what do we do? If the government turns into a giant redistribution apparatus, taking from capitalists and giving to the unemployed, that could lead to murderous politics and economic stagnation.

Definitely food for thought. Oh, and a belated thank-you to R. Reagan. Back when he was prez, I'd tell anybody who'd listen that it would be years before we even understood how badly his policies were screwing things up. Guess I nailed that one, eh?

I'm no economist, but it seems to me that we could be on the brink of a tectonic shift in our understanding of economic issues.

Extended (Optional)

Your Email has been sent.