Workers Are Gaining at the Expense of Shareholders
The supply of labor will be constrained for years to come, eating into profits unless companies can find a way to boost productivity.
Employees have the upper hand.
Photographer: Mario Tama/Getty Images
We just learned from the Centers for Disease Control and Prevention that life expectancy contracted by 1.5 years in the U.S. in 2020, the biggest decline since at least World War II. Covid-19 has killed about 611,000 Americans and exacerbated drug overdoses and homicides as well as the deaths of people who skipped treatments for diabetes and other chronic diseases during the lockdown. Then there are those that suffered from isolation and stress, interrupted their normal diet and exercise routines and overused alcohol.
The resulting negative effects on population will constrain the supply of labor in future years, enhancing the shift away from corporate profits and to employee compensation in the broad makeup of national income. This is a favorable trend for wage-earners but bad news for shareholders, unless the effects of this transition are offset by more efficient use of labor and more rapid productivity growth.