The dollar's convertibility to gold was suspended in 1971. This is not an argument for the gold standard, but the fact that the federal reserve and government was then essentially allowed to flood the economy with money with no accountability is my opinion of why this has happened.
Obviously, companies also had to pay their employees less relative to their productivity for this gap to occur as well, but imo in a market where money is hard to produce companies wouldn't be able to get away with paying their employees less because of competition and lack of easy money (loans, tax breaks, subsidies, etc.).
The dollar's convertibility to gold was suspended in 1971. This is not an argument for the gold standard, but the fact that the federal reserve and government was then essentially allowed to flood the economy with money with no accountability is my opinion of why this has happened.
Obviously, companies also had to pay their employees less relative to their productivity for this gap to occur as well, but imo in a market where money is hard to produce companies wouldn't be able to get away with paying their employees less because of competition and lack of easy money (loans, tax breaks, subsidies, etc.).
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