This chart makes no sense at all. We didn’t get back up to 1940’s level of portability until about 2005?? What’s the definition of Total Wages? Given the growth of the population and trade since 1940, that number could not have decreased.

This is a horrendous chart. Since both series are percentages of GDP, the only reason to use two different scales is to deliberately obfuscate the data. Profits are ~0.11; wages are ~0.44. Wages are FOUR TIMES LARGER than profits, but that apparently doesn’t fit with the narrative the author wants to construct.

Matt: Wages are decreasing because the definition of wages does not include benefits. The decline in wages is a direct result of government policy, as wages are taxed but benefits are not (usually). The past few decades have seen a shift from wages to benefits because of tax policy.

Relative change will generally be greater for the smaller magnitude figure. If “profits” are ~0.11 and “wages” are ~0.44, you would expect the relative changes to be greater for the “profits.”

I have no problem with the layout of the chart, but it is misleading.

The only long term way to increase the weath of a nation is by increasing productivity. The only way of doing this long term is to invest in capital equipment that increases productivity. Therefore a nation that wants to build it’s long term weath should see a slow and steady increase of the levels of capital, which will lead to a slow and steady decrease in the percentage of GDP in wages.

So what this chart is showing is the success the USA is having in becoming richer for all – which is the exact opposite of what people will think when viewing it.