Thanks to David Sirota for bringing this revealing graph to US Person's attention. It neatly summarizes what has happened to the American worker in the years since WWII, and in an election year that is worth talking about, repeatedly. Bernie is talking about it, but where is Joe? This chart is from the Economic Policy Institute. It shows how productivity has risen tremendously in the American economy while wages have remained relatively flat since 1970. Concurrently here has been a steady decline in the number of workers represented by unions, which were successful in negotiating higher wages for their members through collective bargaining.
When unions were stronger than they are now, and worker membership was increasing, economy wide increases in productivity were compensated by increases in hourly wages. The wage mechanism allowed workers to participate in the overall increase in post-war living standards. This key wealth mechanism stopped working around 1973 ("downhill after Nixon"). Productivity was still increasing and steeply with automation and computerization. Net productivity increased 72.2% between 1973 and 2014, yet wages adjusted for inflation for the median worker only increased by 8.9%. In 1965, the C.E.O. of an average large public company earned about twenty times as much as a front-line worker. Today, that figure is two hundred and seventy-eight times. A Greenwich, CT consultant told an interviewer, “Every year that goes by, more and more of the added value in our society goes toward capital, and less and less toward labor. What you end up with is a very unstable society.” An interesting sidenote: Connecticut, one of the richest states, has some of the worse roads in the nation according to several crumbling infrastructure studies.
Where did all the surplus value created by labor go? You should know the answer: over the entire period mentioned more than two-thirds of the divergence between hourly compensation and productivity growth created wealth inequality not seen since the Gilded Age of the late 19th century. The figure is 80% for the period since 2000. Authors of the study say, "productivity growth that did not accrue to typical workers’ pay concentrated at the very top of the pay scale in inflated CEO pay, for example, and boosted incomes accruing to owners of capital."
In short, our political economy has become horrendously skewed. We are not making 'America great'. We are making a few billionaires at the top ever more separated from the economic reality the rest of endure. The pandemic has only made the situation grave and more undeniable--digital retailers and health insurance companies rake in obscene profits off the misery of the masses. It is time we took America back from the corporate robber barons, who are back after a long period of increased egalitarianism to plunder labor.
"Law and order", you cry? Sure, but what kind of order, the plutocratic kind of which the hypocrite Trump is a member? US Person replies, "People over profits."
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| I said that?....Fake News media!* |