Figure 3-5 shows that in Canadian data, labour€™s share of total income is approximately a constant over time. Table 3-1 shows that the trend in the real wage closely tracks the trend in labour productivity. How are these facts related? Could the first fact be true without the second also being true?
Figure 3-5

Table 3-1
Annual Growth in Labour Productivity and Real Wages:
The Canadian Experience

Transcribed Image Text:

Ratio of labour income to total income 1.0 0.8 0.6 0.4 0.2 Year Time Period 1961-2007 1961-1973 1973-1981 1981-1989 1989-2000 2000-2007 Labour Productivity Growth 1.7% 3.0% 1.3% 1.2% 1.5% 1.0% Real Wage Growth 17% 3.9% 1.4% 0.3% 0.8% 1.2%