1. Lofgren, Nyce, and Scheiber 2003.
2. U.S. companies increased their share of GDP between 2001 and 2006 at an unprecedented rate, the fastest gain in labor income since World War II. The profit share of GDP rose from 7% in mid–2001 to 12.2% at the beginning of 2006. During the same period, labor's share of GDP fell from 58.6% in 2001 to 56.2% in the first quarter of 2006. Financial Times journalists interpreted the trends: “The negotiating position of U.S. workers may have been weakened by globalisation, giving companies the upper hand” and “Companies are aggressively shifting the burden of benefits on to the labour force and off their balance sheets” (Guerrera and Swann 2006). In the later part of 2006 the labor share of GDP recovered moderately; however, much of the recovery was because stock options for highly paid executives were included in the labor share, not because large numbers of employees received a larger share of GDP growth. Economists do not expect low unemployment rates—at around 4.2%—to cause “wage-push” inflation, because labor's bargaining power has shriveled in comparison to earlier times when labor markets tightened.
Hope for Retirement's Future
1. Dora Costa (1998) provides an excellent review of American men's retirement behavior since the Civil War; she mostly uses data from surveys of individuals.
2. Russell 1935, 17.
3. The methodology for this calculation is as follows: leisure time after age sixty-five equals life expectancy after age sixty-five (in years) multiplied by one minus the labor force participation rate after sixty-five. For example, the estimated number of years of leisure for someone age sixty-five, expected to live for another twenty years, and with a 50% chance of participating in the labor force, is ten years.
4. Employer pension plans—mostly DB plans—allow early retirement and are more likely linked to health-deteriorating working conditions. In addition, the Social Security disability program, as well as employers' disability programs, also serve as a