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Robert Colvile @rcolvile
, 12 tweets, 4 min read Read on Twitter
Appreciate that there are many things to be infuriated by in politics. But am still baffled/outraged that McDonnell can get away with saying that 'for the first time, more of our national income is actually going to shareholders than it is to workers themselves'
Because it's just not true. It's about as far from being true as 'the MMR jab causes autism' or 'Jeremy Corbyn is a passionate pro-Zionist'.
And it's not like it's an accidental error in a press release. It's the key argument being used to justify Labour's labour market reforms, in particular handing unions greater power within firms. And it's JUST NOT TRUE.
It's not true if you look at the @ONS Blue Book, which shows that compensation for workers at non-financial firms is far higher than gross or net profits (fig 3.1.2)…
And that compensation at financial firms was roughly equal to profits, but much smaller when you add in-work benefits and take away other things those profits were spent on (4.1.2)
It's not true if you look at the @OECD's latest report, which shows that as of 2007, UK workers were claiming 70% of pre-tax revenue…
It's not true when you look at this @ONS chart - which rather confusingly has one scale for labour share and one scale for corporate profits, precisely because they're so bloody far apart
(Raw data here on that…)
It's not true when you look at this LSE blog…
Or this chart provided by @andrew_lilico
In summary, it's JUST NOT TRUE. And it's really weird that McDonnell feels he has to say it is, because there's a perfect legitimate story to tell about the labour share of the economy being in long-term decline, and employee share ownership being a good idea.
But it's telling that he massively overreaches and goes for the claim that makes it sound like capitalism is broken, when it's really really not. (See also: the gig economy.) I just wish he wasn't able to get away with it.
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