In the beginning of the industrial revolution, workers were paid poorly and worked in unhealthy conditions. As the workers began to unionize the workers began to see a significate rise in pay. While industry continued to evolve, workers became more productive and efficient, while wages continued to grew. The union movement seem to reach its peak in the early part of the 1970’s. This is where we begin to see the split between workers wages and their productivity.
Growth of real hourly compensation for production/nonsupervisory workers and productivity, 1948–2011
As you can clearly see the wages of the workers have been essentially flat since 1975. This is the same time that unions reached their peak. Since then the percentage of the workforce that is unionized has continued to decline. Now union workers compromise only 13% of the overall American workforce. Is it a coincidence that workers pay has been flat since the number of union workers has gone down?
I will end with a quote from the Economic Policy Institute:
Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt. It is hard to see how reestablishing a link between productivity and pay can occur without restoring decent and improved labor standards, restoring the minimum wage to a level corresponding to half the average wage (as it was in the late 1960s), and making real the ability of workers to obtain and practice collective bargaining.