This paper returns to a classic question of political economy – the zero-sum conflict between capital and labor over the division of the national income pie. A detailed description of labor's share of national income in sixteen industrialized democracies uncovers two long-term trends: an increase in labor's share in the aftermath of World War II, followed by a decrease since the early 1980s. In this paper I propose a model of the relative bargaining power of capital versus labor towards an understanding of the dynamics of labor’s share. Time-series cross-section equations predicting the short- and long-term determinants of labor’s share support the vast majority of the theoretical arguments. The results, obtained for sixteen developed countries over the period 1960-2000, suggest that the common trend of labor's share dynamics is largely explained by indicators for inter-class struggle in the economic (i.e., unionization, strike activity), political (labor-affiliated government, civilian spending), and global spheres (southern import, foreign direct investments), as well as indirect indicators for the intra-class struggle among workers (bargaining decentralization).