Steven Rattner
June 30, 2016
Is Capitalism Working?
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Agenda
 Jobs
 Wages
 Income Inequality
 Corporate Short-termism
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Jobs
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Jobs Picture Has Been Strong
Source: BLS
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But Labor Force Participation Is Falling
Source: BLS, CEA
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The Missing Prime-Age Men
Source: OECD
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Less Educated More Likely To Drop Out
Source: CEA, BLS
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Gig Economy Is Growing But Still Small
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Source: JP Morgan Chase Institute, BLS
…But Barely Register Among Self-EmployedGig Workers Have Been Increasing…

Wages
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Wages Should Track Productivity
Note: Data are for average hourly compensation of production/nonsupervisory workers in the
private sector and net productivity of the total economy.
Source: EPI
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Incomes Now Appear To Be Rising
Source: Sentier Research
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$56,853

But Wage Data Confusing
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Note: All figures are for production workers only and are adjusted for inflation.
Source: BLS

Corporate Profits Near Records
Source: Standard and Poor’s, Goldman Sachs
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9.5%

Why Have Corporate Profits Risen While
Wages Have Mostly Stagnated?
 Principal causes:
 Globalization
 Technology
 Secondary causes:
 Tax policy
 Declining unionization
 “Winners-take-all” labor market
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Income Inequality
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US Leads in Income Inequality
*2013 or latest available. Gini coefficients are post taxes and transfers.
Source: OECD
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US Does Less to Redistribute Income
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Note: Data is for households with people under 60 only.
Source: Janet Gornick, Luxembourg Income Study 2013

Are Companies Too Short-Term?
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Capital Returns Are Rising
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Note: Figures are for S&P 500 companies only.
Source: Carlyle Group, Greg IP, WSJ

Business Spending Better Than Perception
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Source: BEA

Business R&D Is Near Record Highs
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Source: BEA
1.76%

Firms With More R&D Are Rewarded
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Note: R&D spending as reported by 239 of the largest global 500 companies since 2012. Data is
through May 2015.
Source: Bloomberg, Matthew A. Winkler
251%
avg growth*
69%
avg growth
36%
avg growth
-8%
avg growth

Thank You For Listening
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