Earlier quoted context omitted.
The conclusion isn't that everything is hunky dory. What he does conclude is that labor's share of income hasn't much changed. What has changed is the distribution of income between laborers. As has been noted in about a million places, gains have increasingly been going to those at the top. Your chart implies some sort of breakdown between productivity and income but does not demonstrate that productivity gains have…
Median income remaining flat is entirely consistent with productivity being absorbed by the high end.
My point (well Scott Sumner's really) is that there hasn't been a breakdown between pay and productivity. People are still getting paid more if they are more productive. It's just that somewhere around 1970 or so the median worker stopped getting all that much more productive.
Now, maybe that's what you meant by your graph. In which case, fine. But most people look at that and they think that the median worker started getting cheated out of their productivity gains. And that's probably not what's happening.