Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTThomas KentSat, August 8, 2026 at 12:45 PM GMT+2 10 min readChris McGrath/ Getty Images; Bettmann/ Getty ImagesMoneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.American workers are getting a smaller slice of the economic pie — and some people blame it on a decision made more than 50 years ago.A Kobeissi Letter chart (1) based on Federal Reserve Bank (FRED) data (2) has been making the rounds online (3). It shows wages and salaries at roughly 43% of U.S. gross domestic income in the first quarter of 2026. Taken from a government data series going back to 1929, that share is nearly the lowest since the Great Depression began.Must ReadJeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being oneJPMorgan still sees gold hitting $5,000/oz by Q4 — and savvy investors are protecting their wealth with a tax-advantaged Gold IRA. Learn more with a free guide from Priority GoldThe tax breaks in Trump's 'big beautiful bill' expire after 2028 — and experts say most people won't act in time. What to do before the window closesBut it doesn't mean Americans suddenly took a 57% pay cut. The figure only counts wages and salaries. It leaves out benefits that employers pay for workers, such as health insurance and retirement plans.Americans are still getting raises, too. The latest Employment Cost Index (4) from the U.S. Bureau of Labor Statistics (BLS) found wages and salaries rose 3.2% over the 12 months leading up to June 2026.However, when you zoom out, there remains a problem. Workers are producing much more than they did decades ago — but their pay hasn't kept up, to say the least.So, what happened?One popular theory points to a decision made on Aug. 15, 1971 — the day when President Richard Nixon cut the U.S. dollar's last tie to gold.Cutting all ties to goldFor years, the U.S. dollar had a link to gold through the Bretton Woods system (5), which was established at the tail-end of World War II to regulate the global monetary system with a series of new rules and institutions, including the creation of the International Monetary Fund (IMF).Among other things, it required foreign governments and central banks to guarantee the convertibility of their currencies into U.S. dollars, which could then be traded for gold bullion at a fixed price of $35 an ounce.By the late 1960s, though, that system was under pressure. There were more dollars held overseas than the U.S. had gold to back them. Inflation was also rising.Then, on Aug. 15, 1971, Nixon stopped allowing dollars to be converted into gold (6), helping bring the Bretton Woods system to an end.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info