Current Events
Since 2000, as the labor market weakened, the red line has fallen off a cliff. Total nonfarm business compensation has fallen 10% relative to GDP--an extraordinarily large amount. It's as if 10% of the wages, salaries, and benefits that we would expect in the normal course of things to see flowing to workers has vanished in the past three years. Real GDP per capita today is 3% above its year-2000 value. But real worker compensation per capita is 7% below its year-2000 value.
