Fixed government fees on labor

Anna Stansbury and Lawrence Summers at VoxEU are looking at the relationship between wages and productivity. They two are strongly linked.  

Wages are the index space or productivity.  If government takes away much of wages for fixed price fees, then there us little wage left to create a granular index. The technology just adapts to the government  mandate and productivity, though high, is not granular. 

Taken together, this evidence casts doubt on the idea that more rapid technological progress alone has been the primary driver of rising inequality over recent decades, and tends to lend support to more institutional and structural explanations.