Labour vs. Profits

A great set of charts from Bridgewater Research.
The left hand shows how US company profit margins have trended up largely thanks to productivity gains outpacing real wage growth.
In other words profits rise because workers are getting paid a smaller share of the output they produce.
Part of this is due to wages being driven down globally by the emergence of China (right hand chart).
China has seen rising wages outpacing productivity growth and hence companies grabbing a smaller share.