This is why so many Americans are angry at and frustrated with those with wealth and power

[whatthehey]

20. Yet the basis of productivity has shifted

Both how and by whom productivity is increased has shifted over the last decades. Henry Ford oversaw a massive boost in automotive production efficiency essentially by making people work at more specializrd tasks and more quickly. He raised their pay more to stem turnover (which was running at 370%) than for the later rationalization of expanding a customer base, because he turned their jobs into unremitting unrewarding monotonous toil and nobody would work like that for the lower wages, and that's even ignoring the puritanical internal detective force who monitored their personal habits in and outside work. Ford incidentally was little better than an illiterate idiot (which was famously litigated believe it or not); he rode the wave of his engineers and plant managers figuring these things out and was about as much a technical visionary as Kim Kardashian.

That, more or less, was the basic story of productivity gains for the next half century. Humans worked harder at lousier jobs and you couldn't keep them at their jobs without paying them. The productivity gains came from the workers and they made jobs terrible enough to successfully demand higher pay.

Then starting in the 70s and rapidly accelerating, productivity gains came not from harder and less pleasant work for humans but from replacing them, by machines or software or robotics or even just communication advances. While there are still unpleaant and hard jobs for sure, the percentage of those jobs is much much lower than it was in Ford's day. These productivity gains came from capital not from labor, and what labor was involved became more white collar. You can either hire an army of clerks to keep track of your accounts or buy, say, Quickbooks. Quickbooks has one army of higher-paid higher-educated staff but untold thousands of customers who no longer need those clerks. Toshiba has one army of engineers and technicians building CNC machines and untold thousands of customers who no longer need armies of horizontal borers, lathe operators, drill pressmen, grinders, etc.

Capital, not labor, increased productivity in those customer operations by buying that software and that equipment. It rendered their needed labor either fewer in number or lower in intolerability or both. This meant double decreasing pressure on pay demands. People were chasing fewer and for the most part less unpleasant jobs, because capital made it so. Now we can all sing kumbaya and wish that capital just decided to spread that productivity gain to people who did not provide it and benefitted from it (those still employed that is) but there was neither need nor impetus for it to do so, faced with a surfeit of workers doing generally speaking safer more pleasant jobs (likely vain reminder: the undeniable fact that unsafe horrible jobs still exist does not contradict the equally undeniable fact that jobs overall are now less so than they were.) Instead capital said, as it inevitably must, an anthropomorphized "these productivity gains are down to me; I keep the benefit."