How would you like a 100 percent boost in wages?
If you’re in the top 1/1000th of the U.S. income earners, you already got one. Since 1980, a household making $1.5 million in 2010 has received a pay increase of more than 100 percent, after adjusting for inflation, according to New York Times reporter David Leonhardt (click on chart at left to expand).
Leonhardt points to inequality and a long-term slowdown in the economy as behind the nation’s current woes. This economic slowdown began after the 2001 recession, which never had a strong recovery.
From the fourth quarter of 2001 through the fourth quarter of 2007 (when the financial crisis began), the economy grew at an average annual rate of only 2.7 percent. By comparison, the average annual growth rate of both the 1990s and 1980s expansions exceeded 3.5 percent.
In 99 to 1: How Wealth Inequality Is Wrecking the World and What We Can Do About It, author Chuck Collins summarizes we’ve moved from a nation of shared prosperity—the decades between World War II and the 1960s—to
How would you like a 100 percent boost in wages?
If you’re in the top 1/1000th of the U.S. income earners, you already got one. Since 1980, a household making $1.5 million in 2010 has received a pay increase of more than 100 percent, after adjusting for inflation, according to New York Times reporter David Leonhardt (click on chart at left to expand).
Leonhardt points to inequality and a long-term slowdown in the economy as behind the nation’s current woes. This economic slowdown began after the 2001 recession, which never had a strong recovery.
From the fourth quarter of 2001 through the fourth quarter of 2007 (when the financial crisis began), the economy grew at an average annual rate of only 2.7 percent. By comparison, the average annual growth rate of both the 1990s and 1980s expansions exceeded 3.5 percent.
In 99 to 1: How Wealth Inequality Is Wrecking the World and What We Can Do About It, author Chuck Collins summarizes we’ve moved from a nation of shared prosperity—the decades between World War II and the 1960s—to
…a small segment of the top 1 percent—with an organized base in Wall Street’s financial institutions—has worked over many decades to rig the rules of the economy to favor the 1 percent at the expense of the 99 percent….These rules include government actions and policies related to taxation, global trade, regulation and public spending. These rule changes have led to massive imbalances of wealth and power that jeopardize peace and prosperity across the globe.
99 to 1, an easy to read primer on the growing U.S. income divide, includes such fact-filled data as those that point out how the 400 wealthiest individuals on the Forbes 400 list have more wealth than the bottom 150 million American workers.
But while Collins’ solutions to the current economic crisis are solid, like too many policy prescriptions, they ignore or downplay an essential ingredient: restoring workers’ ability to bargain collectively.
This is why the newly released economic blueprint, "Prosperity Economics: Building an Economy for All," is so important. As co-authors Jacob Hacker and Nate Loewentheil write:
Economic growth will do little for most Americans…unless wages rise with productivity and economic security is strengthened. To this end, we call for empowering workers to engage in collective bargaining.
In this alternative to austerity economics, the authors make clear that:
there is no inevitable trade-off between creating a strong, dynamic economy and fostering a society marked by greater health, broader security, increased equality of opportunity and more broadly distributed growth.
But the heart of returning to shared prosperity must be:
The central role of workers, their unions and collective bargaining to address the full range of our society’s economic ills.
This is a crosspost from the AFL-CIO Now Blog.