From the House of Debt blog:
The fact that productivity has far out-paced wages (so much for the Social Contract, or whatever variation was supposed to be functioning) is not news, but read on:
The chart shows that productivity, or output per hour of work, has quadrupled since 1947 in the United States. This is a spectacular achievement by an advanced economy.
The gains in productivity were quite widely shared from 1947 to 1980. Real income for the median U.S. family doubled during this time just as output per hour of work performed doubled. The rising tide was lifting all boats.
However, what we want to focus on today is the remarkable separation in productivity and median real income since 1980. While the United States is producing twice as much per hour of work today compared to 1980, a small part of the gain in real income has gone to the bottom half of the income distribution. The gap between productivity and median real income is at an historic all-time high today.
And the wealth that’s been created by all the productivity had to go somewhere:
So where are all of the gains in productivity going? Two places:
First, owners of capital are getting a bigger share of GDP than before. In other words, the share of profits has risen faster than wages. Second, the highest paid workers are getting a bigger share of the wages that go to labor.
The net result is that families at the higher end of the income distribution have received more of the income produced by the economy since the 1980s.
They’ll be blogging further on this.