The Diagnosis
Dube’s central exhibit is by now familiar to labor economists but remains startling to anyone encountering it for the first time. From the postwar period through roughly 1980, productivity and wages grew together. After 1980, they diverged sharply. Between 1980 and 2019, nonmanagerial wages grew at around half a percent per year while productivity grew at roughly three times that rate. Had the postwar link held, the inflation-adjusted median hourly wage in the United States in 2019 would have been closer to $33 than the $24 workers actually took home. That gap is not a rounding error. It represents an enormous and ongoing transfer of economic value away from workers.

Dube’s detective work in tracing the causes of this divergence is among the book’s startling contributions. He dispatches the usual suspects with care. Technological change and globalization matter, he concedes, but they cannot explain the peculiar magnitude of American inequality relative to that of peer nations that experienced similar shocks without similar outcomes. What ultimately matters, Dube argues, are the institutional arrangements—unions, minimum wages, tight labor markets, and shared workplace norms—that once constrained employer discretion and have since been systematically dismantled.

The concept of monopsony is central here. In competitive labor markets, employers who underpay lose workers to competitors. But when workers have few alternative employers—whether because of geographic concentration, high switching costs, or the social and psychological obstacles to job mobility that Dube documents persuasively—employers acquire significant wage-setting power. His empirical evidence on quit elasticities is striking: Even workers paid substantially below prevailing wages leave at only marginally higher rates than more highly paid workers—consistent with a labor market far from the textbook competitive ideal.

From this diagnosis flows a set of remedies that are well grounded in evidence and refreshingly nontechnocratic in spirit. A meaningful federal minimum wage, indexed to median wages rather than to the arbitrary accidents of congressional attention; a revival of sectoral bargaining through wage boards that can extend collective negotiation to workers without requiring majority union membership at each individual firm; macroeconomic policy willing to run the economy hot enough to give workers real bargaining leverage. These proposals are compelling.

The Democratic Principle

Among the book’s most important contributions is what Dube calls the “wage standard”—the idea that there is, or ought to be, a societally determined acceptable range of pay for most jobs. This is not simply a technocratic benchmark. It is a claim about democratic agency over economic life. Markets do not simply discover wages the way they discover prices for soybeans. Wages are always already shaped by power—by the relative bargaining strength of employers and workers, by the institutional context in which that bargaining takes place, and by shared social norms about what constitutes fair treatment. If wages are a political and social phenomenon, then setting them is a legitimate exercise of democratic deliberation rather than an interference with neutral market outcomes.