Economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman have released an important study showing the Great Economic Inequality that elites have tried to ignore. Since the 1970s, the real economy more than doubled in size, but even including governmental transfer payments, half of Americans got none of that growth. Much went to the Top 1 percent.
Yet for half of all Americans, their share of the total economic pie has shrunk significantly, new research has found.
This group — the approximately 117 million adults stuck on the lower half of the income ladder — “has been completely shut off from economic growth since the 1970s,” the team of economists found. “Even after taxes and transfers, there has been close to zero growth for working-age adults in the bottom 50 percent.”
snip
Stagnant wages have sliced the share of income collected by the bottom half of the population to 12.5 percent in 2014, from 20 percent of the total in 1980. Where did that money go? Essentially, to the top 1 percent, whose share of the nation’s income nearly doubled to more than 20 percent during that same 34-year period.
snip
Lawrence Katz, an economist at Harvard who also independently reviewed the research, agreed that the data underscored the inadequacies of programs that try to redress inequities after the fact. “It suggests that if you don’t do something earlier in the market, before distribution, through better education or greater bargaining power, it’s really tough to offset completely,” Mr. Katz said. “Countries with less inequality do some of both.”
NY Times: A Bigger Economic Pie, but a Smaller Slice for Half of the U.S.
Unions, fighting for higher wages, and other ways of making the economic system fairer at the start are essential. Band-aids are not enough.
This gap will increase in the Trump administration.
Baby-steps won’t suffice. Incremental change is not enough. We need massive changes to stop this process of impovrishment and inequality.