As a share of GDP, wages have fallen from a high of 64% in 1974 to approximately 54% in 2010.
Amid a certain fashionable revival of Marx in some corners, it shouldn\’t be controversial to call this for what it is: a stark increase in the rate of exploitation. What has happened is the direct culmination of Thatcherite class war, aimed at breaking up the bargaining power of labour in order to restore profitability to what was a crisis-hit British capitalism.
If you go back to the immediate post war period you\’ll see that the wages share of GDP was around that 54% level (running on memory, perhaps a tad higher, 55, 56%).
And then we had that exercise of union power which increased that wages share. To the point at which, by the mid 70s, the profit share was insufficient to encourage people to invest.
You\’re absolutely correct that the profit share has risen since then. But your underlying assumption that that high wages/low profit share in the mid 70s was a good thing, or even a stable split, is the error.
Another way of putting this is that union power put the wages share too high to encourage the necessary and continual investment needed to keep the economy growing. Thus it had to fall.