If the “new economy” or “knowledge economy” primarily rewarded education, rather than ownership of assets, then we would expect the greatest increase in incomes to have occurred among the top 30 percent with at least a bachelor’s degree. Instead, the gains from growth have been concentrated among those with income from capital—investors and managers with stock options.
In one study, in sixteen Western democracies labor productivity grew far more rapidly than average real wages and fringe benefits, but most income growth went to profits of owners and shareholders. Another study of thirteen advanced capitalist countries found that the growth in real wages, which had been 4 percent in the 1970s, was less than 1 percent between 1980 and 2005, while the wage share of income declined from 78 percent to 63 percent, with the rest going to income from profits, interest, dividends, and rents.6 The big money is not in “human capital” but in plain old-fashioned capital. The new economy is really a new version of the old economy—the managerial capitalist economy, not some mythical, immaterial “knowledge economy.”