Imperfect competition drives decline in labor share, impacting economies differently.
The article explores why the share of income going to workers has been decreasing in Spain and the U.S. The researchers found that the way companies set prices affects how much they rely on machines versus people. In Spain, companies are more likely to replace workers with machines when prices go up, while in the U.S., they stick with workers. This difference helps explain why workers in both countries are getting a smaller piece of the income pie.