NO! This is EXACTLY what I (really Scott Summers) am saying has not happened. The share of national income going to labor (vs the owners of capital) has remained almost exactly constant since 1973 (and before then as well).
This is not one of those “he said, she said” where reasonable people can disagree on whether the PCE or CPI is a better price index. This is a pay/productivity gap being invented by using the slowly moving price index (NDP, which is similar to the PCE) to make worker productivity look better, and the faster moving price index (CPI) to make real wages look lower. That’s not kosher. You need to use the same type of index for both lines on the graph.
If you simply don't believe in wage stagnation, then I'm not sure what this whole conversation has been about.
http://taxfoundation.org/sites/taxfoundation.org/files/docs/...
While that graph shows labor's share as stable, many others do not, e.g. in this piece by Jared Bernstein: http://economix.blogs.nytimes.com/2013/09/09/why-labors-shar...
Of particular interest to me is that if you look at the BEA numbers, they split 'labor share' into wages and non-wage compensation (benefits, SS, medicare, etc.) - the latter share has climbed over time to 20%, meaning much of the stability in the "wage share" is just increasing money being paid to Medicare.
It's not clear what's being measured and not in that chart, but, for example, this St. Louis Fed data shows both an increasing Dividend share of GDP and a declining wage share of GDP:
http://qvmgroup.com/invest/2012/09/05/profits-cash-flow-divi...
> fewer and fewer people are needed to make more and more stuff.
You're arguing against yourself, here. The latter is productivity increase, the former is productivity decrease. Also, productivity growth is not new, it has been going on as long as the economy exists. Machine automation has been occurring since the industrial revolution started, it did not start in 1973.
What started in 1973 was that the high end (basically, the owners of capital) stopped sharing productivity gains - meaning that where previously, workers were able to bargain for a share of the increase, now they cannot, because of various mechanisms of taking. CEO pay did not go up 10X because CEOs were suddenly drinking tiger blood and winning the Fields medal.
My original contention was that one of these was the shift away from the Bretton Woods system, with fixed currency exchange rates based on the dollar; going from here to speculative international currency flows and floating exchange rates is one possible mechanism for making workers less able to bargain for those productivity increases.