Why is there a gap between productivity vs wage, that began in the 70s?

Question

I think everyone’s seen the famous graph from the Economic Policy Institute, that show that while Productivity has been growing in a steady and linear fashion decades after decades, wage began to stagnate in the 70s.

Since the 70s, wage have grown about +0.6% per year, while productivity has grown at an average of 1.4% per year. That gap is enormous and it is compounding over time.

Can someone me why it’s happened?

In: Economics

Answer 1

The normalization of a dual income household. Imagine what would happen to wages if there were suddenly 2x the workers. Wages stagnate cost of living increases and rich get richer since theres more money to buy the stuff the rich are selling.