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In One Chart: What Happened to the Middle Class

Andrew Smithers Chart

This chart, by British economist Andrew Smithers, shows how the nation’s income has been distributed since 1929.  “All output is for somebody’s benefit, either those who work for the firm (the labor share) or those who provide the capital (the profit share). Labor’s share has never been lower or the profit share higher.”

Smithers attributes this to changes in the way corporate executives are paid. “The current incentives discourage investment and encourage high profit margins. This is dangerous for companies’ long-term prospects… It is [also] very damaging for the economy… Senior management positions change frequently, so if management wish to get rich, they have to get rich quickly.”

Read the full PBS NewsHour interview here.



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