1.4. Let's see what fraction of the economic pie goes to workers in the form of wages, and let's see if it has changed over the years. The "wage share" seems like it should be easy to calculate, but there's a problem. That problem brings us back to the big idea of opportunity cost. The problem itself is straightforward: When a small business owner makes money, should we count that as "wages" or as "profit?" Usually, a small business owner is working at the business most days, doing the kinds of tasks that you could 1959 2003 Total Wages as Percentage of National Income Including One-third of Business Income Including One-half of Business Income Including Two-thirds of Business Income So, now that you've calculated this, does it appear that "wage share" has risen by more than 5%, fallen by more than 5%, or stayed roughly the same over the decades? Does the one-third, one-half, or two-thirds business owner adjustment affect this conclusion?

112 • PART 2 • Economic Growth