The tech giants may have just been a particular touch stone in a long trend of increased, unchecked corporatization of US business. Perhaps that culminated in a kind of phase transition that took place in the 2000s.
But there's another interesting detail to that chart which is that wages appear to be back on track since 2010 and have trended upward pretty sharply since then compared to the 2000s. If the slope of the wage line is to be believed (and were to continue), we'd be in pretty good shape in another decade or so. So, to play devil's advocate, perhaps it's wrong to look sideways at some of the big players in the space right now. I don't know. Not an economist.
but the famous productivity/wage gap chart shows it started in the 70s to 80s. What makes you think it's due to the dotcom bubble?
The relation I can think of is the tech giants obviating away many instances of labor that were being sold.
Email, travel agents, streaming, GPS mapping apps, etc all let people do a lot more with the labor of a lot fewer.
But that is not solely the domain of tech giants or tech companies. Automation has been happening for decades, along with outsourcing to countries with cheaper labor.
Since prices (wages) stayed stagnant, one can conclude that the supply of labor increased more than the demand for labor.
Edit: another factor increasing supply of labor is women joining the workforce
If I'm being charitable, they made a mistake in their analysis, if I'm uncharitable they didn't care about the methodology and went in looking for a way to write a provocative conclusion like "86% less purchasing power". Obviously a lot of energy was spent here drawing up the pretty infographics, probably should have spent more energy getting the basic statistics correct first?
My parents bought a house when I was born in NYC in the 70s for $20k, sold it for 10x more in 1990 and that buyer sold it for 10x more circa 2007.
The deflationary power of the internet powered costs for business. My employer has 1/3 the accountants they had 30 years ago, but 5x as many IT people. Specific occupations make more money, but most make less due to dropped demand. On the production side, you can pretty trivially source goods from a anywhere on the planet. Again, reducing cost.
But the hard assets go up. Housing, food, durable goods. The average white good like a fridge costs 50% more and last 50% less time.
P/E is the inverse of earnings yield. It varies with rates. So 2% -> 1% equity yield means a doubling of P/E. But framed as a yield shift it looks less dramatic (and more familiar).
Of course Putin's doing it now in Ukraine and maybe China is about to do it in Taiwan so don't worry, the rest of the world is catching up to America's stupidity.