Real compensation has become disconnected from wages mostly due to 2 factors [1]: - Wage inequality (the average wage is growing faster than the median wage)

Real compensation has become disconnected from wages mostly due to 2 factors [1]: - Wage inequality (the average wage is growing faster than the median wage) - Growth in benefits like pensions and health insurance which are not part of wages but are part of compensation The inequality and benefits effects are about equally strong. Once you control for these 2 factors, compensation has risen at almost exactly the same rate as productivity growth, which is what you would expect of the economy in long run equilibrium. [1] https://www.resolutionfoundation.org/app/uploads/2014/08/Decoupling-of-wages-and-productivity.pdf https://www.resolutionfoundation.org/app/uploads/2014/08/Dec...