Stop misinterpreting the curves showing a relative decrease in salaries!

It does not happen too often to me, but right now I am upset that statistics are being misinterpreted.

In these times of crisis, of 99 percent movement, of demonstrations against the financial and corporate world, numerous charts are disseminated that show how the proportion of wages in percent of GDP is declining (and how the proportion of corporate profits is increasing). Here is an example from a recent post on the Daily Beast titled “the era of corporate profit”:

wages percentage of GDP historical curve
typical historical curves for wages and corporate profit

Now, what does that really show? Obviously, it shows that the proportion in the GDP of the wages and salary income of people employed traditionally by corporations is decreasing. Does it show that the average worker earns less? That’s quite a stretched interpretation even if most commentators just mean it!

As an avid reader of the Fourth Revolution blog, the fact that the share of salaries in the overall income should not surprise you: salaried employment by large corporations is a model of the Industrial Age, which is declining – BECAUSE THERE ARE LESS PEOPLE THAT ARE SALARIED (and not, because each of them gets less money!!). In fact, the diminution of the share of conventional salaries in the GDP is another precursor of the Fourth Revolution!

The US Bureau of Economic Analysis provides historical tables on the revenues in the USA. Here is a curve anyone can obtain with a little bit of patience:

income per category, pct of GDP
why wages and salaries are only a small part of people's income

So what? Yes, wages and salaries have a tendency to decrease, but the income from non corporate business, sole proprietorships, and non-profits organizations increase dramatically. These are organizations which certainly create value for only a few individuals (to obtain the curve we have reclassified their profits as income for the owners)! These are the organizations of the K.E.E.Ns…

Stop the fallacy of showing decreasing salary curves as an indication of the impoverishment of the average citizen. The future lies in other forms of organizations, and their importance increases dramatically.

Welcome to the Fourth Revolution. The future and the Value is elsewhere than salaried employment. When do you jump to other forms of organization?