Furthermore, without unprecedented changes in redistribution, declining labor share also translates into a structural decline in household consumption power, as humans lose their primary means of earning the income needed to participate in the economy as consumers.
This holds only if the labor share of income shrinks faster than purchasing power grows. Overall, I still think the misaligned economy argument goes through if household consumption power grows in absolute terms but “human preference aligned dollars” shrinks as a fraction of total dollars spent.
This holds only if the labor share of income shrinks faster than purchasing power grows. Overall, I still think the misaligned economy argument goes through if household consumption power grows in absolute terms but “human preference aligned dollars” shrinks as a fraction of total dollars spent.