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

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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

20 Answers

Anonymous 0 Comments

Corporate greed.

Why pay your staff the gains of their increased productivity, when you could pay them a fraction of that and pocket the rest yourself? The overwhelming majority of people aren’t going to look into financial data to discover that fact, especially pre-internet, so it’s basically free money if you’re a greedy business owner.

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