Let's say productivity growth and marginal revenue productivity growth are about comparable, for the sake of the argument. See the earlier post if you don't understand why we shouldn't be literally thinking in terms of output per hour of labor - but let's say the growth rates are comparable so the divergence is real and relevant to think about.
Then let's say we have a conflicting claims model of inflation.
We have been looking at this in terms of taking the macroeconomic environment as given and then asking about the extent to which the divergence in productivity and wages implies that labor is undervalued. In other words, we are looking at these numbers and saying that the pie is divided inequitably and just bracketing off questions about the size of the pie (nominal and real).
If we take a conflicting claims perspective, you have to think about the prospect that maybe we should not be bracketing off the macroeconomy.
Let's say wages grow with our crude productivity measure which we take for the sake of argument to be a decent marginal productivity measure for all classes of workers, and that we have this insane $22 minimum wage implemented. It results in unemployment if we think that that's the margin on which adjustment will occur.
But in a conflicting claims setting there's another marign - the price level.
Maybe these productivity statistics are telling us that the distribution of the pie is fine or close to fine (obviously CEO pay is fucked up, but maybe the broader income distribution ain't so far off) but the price level has been far too low for far too long.
This may not make any sense. Be kind in the comments if it doesn't - just a thought.
And if you're going to comment and you think I'm saying a $22 minimum wage is a great idea, you're not getting my point. My point is that we bracket off the macroeconomic significance of these sorts of things precisely because our usual models for thinking about the economy don't take distritbuional fights like this into account - the conflicting claims model does.
5 minutes ago