GGP referred to 'real wages', and implied that they've increased.

> All expenses have grown faster than wages, or wages have not kept up with inflation

Your expense is someone else's wage + a capitalist's profit margin.

Expenses across the entire economy can only outgrow wages if someone's taking a bigger slice of profit off the top.

When we talk about inflation, we always conflate the two, as if they are the same thing. They are not.

> Expenses across the entire economy can only outgrow wages if someone's taking a bigger slice of profit off the top.

Have you paid attention to the Delta between executive pay and that of general labor over the past 4 decades? This is exactly what has been happening.

> All expenses have grown faster than wages, or wages have not kept up with inflation

Source? Even the famously wrong[1] productivity/wage gap graph from epi.org admits that wage has at least been growing in real terms.

[1] https://old.reddit.com/r/badeconomics/comments/6rtoh4/produc...

I've seen some pretty dumb arguments linked here but that one takes the cake. The EPI graph isn’t measuring productivity vs. pay, even for "typical workers"; it’s measuring wage inequality. Umm yes it is a problem that wages for the vast majority of workers have stagnated; the possibility that some CEOs have done well doesn't counteract that. Also if they don't like the particular figures that "EPI" used, maybe they would prefer the Fed's research that shows exactly the same phenomenon using different data sources? [0]

Then there is some reference to Mankiw making some assumption about labor supply and demand being infinitely differentiable and continuous, as well as violating "Rule V" in the adjacent sidebar. Meanwhile the newly-constructed local Taco Bell has two employees, a closed dining room, and the drive-in queue starts on the road before the entrance to the parking lot. This is my shocked face, at Mankiw doing something dumb.

Essentially, we should not see 40 year runs of compensation lagging productivity due to some outsized returns to shareholders. That would likely reveal a structural problem in the labor market, at least by my understanding. "This would be a bad thing and our system is perfect so this accusation of badness must be wrong!" OK, Pollyanna. It would be inconvenient if the increased market concentration we see in every industry has given the remaining firms greater pricing power both as buyers of labor and sellers of products, so let's assume that didn't happen even though this graph clearly shows it.

Truth in advertising for this subreddit, it seems. Psychological commitment to the status quo yields unconvincing arguments plainly contradicted by public experience.

[0] https://research.stlouisfed.org/publications/economic-synops...