The root causes of the decline in the labour share of GDP

We examine the downward trend in the wage (labour) share of national income in the cases of the United States and the euro zone. The labour share began to decline in 20 0 1 in the United States , and in 1995 in the euro zone. What accounts for it? Possible causes are: Deunionisation and the decline in wage earners’ bargaining power. This explanation seems pertinent ; The skewing of the structure of jobs towards sectors where wage earners have little bargaining power. This is not the case; The rise in capital intensity, leading to the need for a higher capital income share. This is the case in the United States; One explanation put forward by a recent and very interesting study (1) : value added is shifting to companies where the wage share of value added is low; these are large companies that have high pricing power, resulting in high profit margins (these companies probably benefit from technological or monopoly rents). (1) M. Ke h rig, N. Vincent (2018) “The Micro-Level Anatomy of the Labor Share Decline” NBER Working Paper No. 25275, November 2018