Central mechanism? Yes, the weakening of labor and the rise of anti-labor business practices. The minimum wage stagnated starting in the 1970s and fell to a lo

Central mechanism? Yes, the weakening of labor and the rise of anti-labor business practices. The minimum wage stagnated starting in the 1970s and fell to a lower level (adjusted for inflation) from the '80s onward. The federal minimum wage adjusted for inflation around 1970 would be around $9-10/hr now. As a share of per capita GDP, which the minimum wage used to roughly track, the minimum wage has fallen much more. If we were at the equivalent levels to the 1960s it would be near $20/hr right now. That combined with a shift in the balance of power from labor (unions, etc.) to employers has translated into depressed wages for the working and middle classes for the last 40 years or so. And from that everything else follows.