For three decades, wages have evaporated as a share of the economy. Meanwhile, the proportion of national income consumed by profits, dividends, and capital gains has steadily grown. Capital 1, Labor 0.
So it's a bad time to be a working stiff in the U.S. But it turns out that this isn't just an American story. A pair of economists at the University of Chicago's Booth School of Business, Loukas Karabarbounis and Brent Neiman, are out with a new working paper showing that just as the rise of income inequality has been a global phenomenon, so too has been the fall of labor. Building off their previous research on the topic, the pair compiled data for 56 countries and found that worldwide, workers' share of GDP had fallen roughly five percentage points since the 1980s.
That pattern didn't hold true in every single country, but it was constant in each of the world's largest economies: the U.S., Japan, China, and Germany.
So why are workers seeing their slice of the pie shrink? Blame robots, say Neiman and Karabarbounis. Specifically, cheap robots (or, if you'd prefer, cheap PCs, cheap industrial machinery, and cheap technology on the whole). As the digital revolution started unfolding in earnest during the 1980s, the cost of computing power fell precipitously. As a result, the pair suggest that companies began investing in high-tech equipment instead of comparatively inefficient and expensive employees. To oversimplify just a bit: Robots really have been taking our jobs, or at least our raises.