1. Josh Barro writes,

For four decades, even in stronger economic times, wage gains have not kept pace with economic growth. Wages and salaries peaked at more than 51 percent of the economy in the late 1960s; they fell to 45 percent by the start of the last recession in 2007 and have since fallen to 42 percent.

I would note that a very important part of that trend is the shift from “straight” wages and salaries to other forms of compensation, notably health insurance. Higher payroll taxes also play a role. The share of total compensation to GDP held up fairly well until recently. One might argue that with offshoring, capital-labor substitution, and the relentless climb of non-wage benefits costs, the elasticity of demand for labor is starting to yield declines in labor income.

2. Catherine Rampell writes,

The share of people getting laid off each month — as well as, more disturbingly, the shares getting hired and quitting their jobs — is near record lows. That’s according to Labor Department data released this week and calculations from John Haltiwanger , an economist at the University of Maryland. Haltiwanger estimates that private-sector layoffs, hires and resignations are 21 percent to 26 percent below their rates two decades ago.

This is important information, and Rampell wisely points out that there are a number of plausible explanations, with rather divergent policy import.

Incidentally, I agree with Tyler Cowen that it is good to have Barro and Rampell joining the ranks of columnists. I look forward to op-eds that I might actually have to read in order to find out what they have to say.

3. Bill Gates says,

I think tax structures will have to move away from taxing payroll. … Technology in general will make capital more attractive than labor over time. Software substitution — whether it’s for drivers or waiters, nurses … it’s progressing. And that’s going to force us to rethink how these tax structures work in order to maximize employment given that capitalism in general over time will create more inequality, and technology over time will reduce demand for jobs, particularly at the lower end of the skill set. We have to adjust, and these things are coming fast. Twenty years from now, labor demand for lots of skill sets will be substantially lower, and I don’t think people have that in their mental model.

James Pethokoukis points out, as I would, that Gates’ views align with a growing literature on this topic.

4. Mark Perry writes,

one of the reasons for the disappointing monthly employment reports is the persistent weakness in the public sector employment, which is offsetting the relatively healthy increases in private sector hiring that is 63% greater than private job creation during the last recovery.

I am not sure that his numbers line up with his rhetoric. Relative to the labor market as a whole, the weakness in public sector employment strikes me as pretty small. To put it another way, if you were to restore all of the government jobs that have been lost since the start of the recession, the employment-population ratio would be maybe .3 or .4 higher than it is now, but still about 4.0 below what it was before the recession hit.

I suspect that state and local governments have been constrained by low property taxes and increases in Medicaid spending. Also, if they have to hold down employment because of the strain of pensions, that would not surprise me.