The Great Decoupling

This chart shows in striking fashion when the productivity gains of the U.S. economy split off from the growth in pay. Brian Beutler talked to various economists about why it happened. There’s no simple answer — and there’s no prospect of the systematic causes of the great decoupling being corrected in this political climate any time soon. But beneath all the noise and nonsense of this campaign season, that split between productivity and wages is a fault line between the two parties. Mitt Romney and Republicans in general don’t consider that decoupling to be a problem. Barack Obama and Democrats will acknowledge it’s a problem, although there’s considerable disagreement over whether the fixes are politically possible.