This is an insightful article but it misses one of the least popular causes of low wages: the increasing financialization of the economy. Consider the different sources of financing available for a corporation. Until mid 19th Century, banks had always been the only external source of financing to a corporation. Bank loans were generally repaid gradually, in fixed instalments. This offered the attractive feature of leaving some cash flow flexibility to companies. Then came corporate bonds: there, the borrower offered to pay a fixed coupon to the lender until expiration, when the whole principal of the loan was due. Finally, came equity financing. There, the appetite of investors for a stock is directly proportional to the ability of the management of a corporation to pay ‘dividends’ to investors (stock owners) as a percentage of the business’ profits.

Note the difference in the remuneration for the capital lent to the corporation: for banks, it is a fixed amount every year until all the loan has been repaid; for (most) corporate bonds it is a regular interest payment(coupon) and the reimbursement of the principal at the expiration. In both of these sources, there is zero discretion from the side of the corporation as to how much to pay out every year to investors/lenders. The remuneration of equity investors, on the other hand is a totally discretional matter that is decided by the Board of Directors regularly.

Starting from the last decades of the 19th century, stock markets experienced a growth in total capitalisation (both due to increasing prices of listed companies and, especially so, by new listings), growing by 10% to almost 50% before WW1. The next period of strong growth of market cap started in the 1980s: from 50% to the current 150%. Nowadays, the stock market is not merely a choice for large corporations: also small and medium size companies have access to the market.

All this means, that there is an unprecedented discretion for the management of the borrowing entity on the distribution of profits between the owners of the factors of production (labour and capital). And as companies compete for rare (so to say) funds, in the recent decades the dividends distributed, as a share of market capitalisation have increased strongly.

Among the structural reasons for the falling trend in wages I think we should also add this one.