[bluedevil2k]

GDP has no relation to average wage, so not sure you can make an argument for ... giving people more money? If if I make a candy bar and sell it for $1, GDP would be $1, but my personal profit may only be 10 cents. Further, if I sold it to a convenience store who sells it for $2, then GDP is $3, and total profitability may only be 20 cents.

[brianpgordon]

That's not how GDP is calculated. It's roughly the total value added along each step of the production/sales chain. If every person were equally productive and were paid exactly the value they added, and there were no taxes or government spending, then GDP per capita would indeed be the same as the national wage, though of course this situation is idealized to a ridiculous degree.

[Decathect]

If everyone was paid exactly the value they added GDP per worker would be the average wage, with no caveats required.

Equal productivity would just mean the average and median wages would be the same.

Government spending, funded by taxes, contributes to the GDP like any other spending.

[brianpgordon]

> Government spending, funded by taxes, contributes to the GDP like any other spending.

That's exactly the problem. You're thinking of Gross Value Added (GVA), which strictly talks about value added through normal economic activity. Once you start "removing" productivity through taxation and "adding" productivity back through spending/subsidies you have a new variable- the presence of that variable is the difference between GVA and GDP. That variable doesn't necessarily net out to 0 either, or even close, if the government runs a surplus or deficit as the United States does.

[Decathect]

Intermediate goods are explicitly excluded from GDP calculations and resale of finished products only increases GDP by the value added amount. In your scenario GDP would be $2.

Regardless, GDP can be calculated by summing all income across all sources. It represents a nationwide increase of wealth. The gap between wage per worker and GDP per worker indicates that, despite labor being the only source of wealth generation, labor only receives a fraction of its productive efforts back as wages. I like it because illustrates the gap between capital and labor, as an alternative to the more traditional income inequality between workers.

[shove]

a much better argument would be to imagine a scenario in which the total profit was divided amongst the workers and show that despite exploitation via low wages being the source of huge corporate profits, it still wouldn’t be nearly enough to lift the employees into the middle class.

[Decathect]

Amazon famously avoids turning a profit and yet its CEO is the richest person in the world.

Its market cap divided evenly among its half million full and part time workers would make all of them millionaires.