system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How did the Nixon Shock cause the change in the Productivity-Pay gap?
gpt
It didn't, or at least you're not going to find many economists who agree that it did.  Pay and productivity didn't begin diverging until 1984 - 13 years after the Nixon Shock.

The overwhelming consensus as to the cause of the Productivity-Pay gap is that in 1983 the US re-designated China as a "friendly" nation.  This both allowed for the export of advanced US manufacturing technology to China and significantly reduced US trade barriers to imported Chinese goods.  

Following that change, US workers began having to compete against Chinese workers, who were working under a system in which the government fixed their wages to be the equivalent of ~$350 per year, with workers in small, private Chinese factories often earning less than that.

The world before 1990 was a much different place than it is now.  Outside of the US and Europe infrastructure was generally non-existent, governments were wildly corrupt, and guerilla movements were widespread.  China was one of the only third world countries with a functional government, well developed infrastructure, and no ongoing guerilla war within its borders.  What prevented it from developing was its international isolation - the West didn't recognize it and the Soviet Union was openly hostile towards it.

China was able to rapidly develop once the US opened up to it.  This injected a billion ultra-low wage Chinese workers into the international economy who were roughly as productive and competent as those in the West.  If you're an unskilled laborer in the West then you're competing for jobs based on the wage you want to be paid.  

After China opened up, you suddenly found yourself competing against ~5 times as many laborers for the same number of jobs as you were before, which exerts an extremely strong downward pressure on wages.  This downward pressure has gotten even worse as you get closer to the present and more third world countries have been able to develop their governments and infrastructure to the point that they're able to participate in the global economy.