If the boot had been on the other foot — if it had been the profits share that was shrinking — you would never have heard the end of it. But when it is just the workers' share, economists are not all that fussed.

If we focus just on the "total compensation of employees" (which includes employers' superannuation contributions on their behalf) and "total gross operating surplus of corporations" (the main national accounts measure of profits), we find that, in 1999-2000, the share of national income going to labour was 70.3 per cent, leaving the share going to capital at 29.7 per cent. But by the December quarter of last year, the wages share had fallen to 66 per cent while the profits share had increased to 34 per cent.

That is a shift of a remarkable, unprecedented 4.3 percentage points in just 6½ years.

Let us be clear on what this means. For a start, it does not mean wages have been falling. We are talking about changes in the workers' share of the (ever-growing) pie, not the absolute size of the share.....This explains why the Government can still say that real wages continue to grow. But the fact remains that, if the wages share is falling, workers are not getting their proportional — their "fair" — share of productivity gains.

Why not? Well, because this has been going on since the start of the noughties, it is not likely to have much to do with WorkChoices.

If you break down the wages and profits shares by industry, you find three where the profits share has increased noticeably: mining, wholesale trade and finance.

Mining is no surprise — the prices they receive have gone through the roof. It is more surprising that the wages share has fallen most in the finance (mainly banking) industry. Finance industry wages have not risen nearly as fast as fees and other charges have risen.

But this is not an adequate explanation.

There remains more to this business than we have yet determined — if economists were more interested in finding out."

......and on it goes courtesy of economics champion Ross Gittins. In other words this is definitely not a government for the battler on a wage as claimed by PM Howard. As Gittins points out it's not really resolved the cause but we think quite suggestive it's a government for large shareholders and overpaid executives??

Postscript #2

By George the contest for the seat of Wentworth in East Sydney is gaining intensity, and local Mayor George Newhouse is getting way serious. We are tempted to nominate as an independent just to see if we can influence the result. Having been one of the councillors at the time who voted for the beach side parking meters to finance management of whole of Sydney tourism impacts on one LGA when Kim Anson was a dept head in the late 90ies (to become General Manager - and may still be), we can easily see where Ambitious George is coming from.

We have no doubt it's a very popular move, a real election policy in fact. Here are the swathe of Sunday press clippings in Sydney, and notice Mal Turnbull's faithful stock item - a grant to the local surf club. Trouble is they likey knew some of the victims of the Bali bombing in 2002, the govt it seems were tipped off about, as per recent ASIO leak story (reported here on SAM via The Australian).