In 2008, a new world economic crisis of capitalism started that resulted in significant drops of the rate of profit in both the USA and the EU. In the USA, the effect was that the capitalist class heavily intensified exploitation in order to drive up the rate of profit. In the EU, the economy stagnated and the rate of profit remained at a low rate in the years after the crisis started in 2008.
The wage share is the share of the total wages in the gross domestic product (GDP), whereas the capital share is the share of capital (profits and constant capital) in the GDP. These two shares are indicators for the power of labour and capital. Figures 9.3 and 9.4 show the development of these two variables in the USA and the EU.
From the early 1960s until the mid-1970s, the wage share increased in both the USA and the EU, which signified an increasing power of the working class and relatively successful class struggles during this period that compelled capital to increase wages. In the mid-1970s a period of wage repression started in both the EU and the USA, which result in significant drops of the wage share. At the same time, the share of capital in the total economy increased.
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Themes