Open thread: What happened to wages in the mid seventies?

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Everyone by now has seen some variation of that graph. What happened and why? Whatever it was, why did it keep going? Why was it replicated around the world? If it isn’t reversed, what will happen? Give me your best theory.

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About timothyscriven

I study philosophy at Sydney University. In the grand scheme, I'm not very important.
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3 Responses to Open thread: What happened to wages in the mid seventies?

  1. Nobody says:

    Obviously some other factor of production has to have, over time, increased the amount of value it adds to the productive process with labour remaining stagnant. I would personally be inclined to suggest that the rise and rise of computing may have played a substantial hand here, which would of course increase productivity by itself without it being obvious that workers are working any harder or are more deserving of pay increases. Just a guess.

  2. The breakdown of progressivity in the tax system saw more income being left to the top echelons while the rise of monetarism put a dampener on wage growth.

    I would expect these effects to be international international because recessions are international, and the response to economic crises seem to be chosen primarily by the economic consensus of the elite, whose circles tend to also be international.

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