Options of the ratio of labor productivity growth to average wages

Abstract

In the article there are three variants of this ratio, formed in accordance with the requirements of the SNA methodology (System of National Accounts). Currently, only one out of three options is being popularized by leading economists, which is characterized by an increase in labor productivity over wage growth, which is likely to ensure the growth of the economy as a whole, an increase in the profitability of production, and then the growth of workers’ incomes.
In the proposed article it is proved that this popular variant really and immediately provides the greatest growth of gross margin, which is carefully concealed by its adherents. Wages, at the same time, are reduced at first relatively, and then absolutely. The second variant, out of three possible ones, differs in the equality of growth rates of the produced income, wages, and gross profit. It is good under the conditions of balance achieved and its maintenance, between the interests of the state, business and working masses. The third option of the ratio of growth rates can be beneficial in case of aggravation of problems in the welfare of workers, as it immediately prefers the rate of wage growth. The alternation of the above options and the duration of each of them form the core of economic policy from the enterprise to the country as a whole.