This note from Timothy Taylor is important although I think his conclusions may be wrong. But the falling share of labor income is one of the strongest refutations to Cowen’s Great Stagnation. The economy’s growth hasn’t slowed nearly as much as Cowen would like you to believe. Instead, more of the income has been going to places other than workers’ paychecks.
I think the right answer is a loss of bargaining power by workers, both through lower unionization, globalization, and increased competitiveness in the economy as a whole. But if we could get back up to the 2/3s share of income, that would be a huge boost for household income.