Stagnant European Living Standards: Can the NYT Say Profits?

The NYT had an article about how middle class Europeans are now seeing the sort of stagnating incomes that families in the U.S. have experienced for the last three decades (the NYT doesn't make the comparison). Remarkably, it says almost nothing about the causes and what it does say is quite confused. As in the United States, most of Europe has seen an upward distribution of income over the last three decades. However, unlike the U.S., much of the upward redistribution in Europe has gone to profits (profit shares have been stagnant or even declined somewhat over the last decade in the U.S.). This fact is never mentioned in the article. The article also cites France's 35-hour workweek as a cause of stagnating wages. If workers get the same take home pay, but work ten percent fewer hours, then this implies a higher living standard, since they have more leisure time. This is very different from a situation in which take home pay stays the same when hours have not been reduced.

--Dean Baker