The reason for discrepancy between productivity growth and wages stagnant is because the productivity initiatives were created by a few people that benefited handsomely, not by the masses employed in call centers / coffee shops / warehouses. I think one probable reason for this change was technology - technology made spreading knowledge and controlling processes among thousands of entities a lot cheaper. Who are these few people? Most likely you will find them in corporate centers. These people constantly fine tune processes, haggle with suppliers, diversify their suppliers, create new machines, lobby for legislation to make off-shoring easier, etc... I had the opportunity to work 4 years in Amazon as Financial Analyst. None of the cost savings initiatives came from call centers / distribution centers. Even more to the point, as part of ACES program, bright motivated individuals in call centers / distribution centers would be picked up and brought to HQ so their initiatives can be applied to the entire company. When I worked as Financial Analyst with Starbucks there was only one cost saving initiative that came from a store manager - that store manager figured out how to use less milk for the lattes. All the other cost saving initiatives came from HQ.