A research paper released by the Brookings Institute attempts to explain why compensation, as a portion of the country?s total GDP, has been steadily shrinking over the past few decades and it concludes that the effect seen is mostly due to competition in manufacturing from places like China. The paper tests several other theories including the decline of the U.S. Union density and a possible substitution of capital for labor, but none of the proposed alternatives carry as much weight. Much of the loss of in compensation is made up for with increasing equipment and building costs, rather than increasing corporate profits as some suspect. The paper projects that the Affordable Care Act (?Obamacare?) may accelerate the decline.
See "Offshoring Linked to Declining U.S. Labor Share, Likely to Continue", Michael Elsby, Bart Hobijn, & Aysegul Sahin, The Brookings Institute, September 22, 2013