Bryce Covert
takes note of an
analysis by Josh Bivens at the Economic Policy Institute described visually in the chart above:
Corporate income, which makes up about three-quarters of all private sector income in the country, can either go to employees or the owners of companies, and last year just under 73 percent went to employees, the lowest point in more than six decades. [...]
Workers aren’t earning less because they’re slacking off—just the opposite. Their productivity increased 8 percent between 2007 and 2012 while their wages actually fell, a trend that has been going on since at least 1979. And they’ve been speeding up since the recession, increasing their productivity last summer at the fastest pace since 2009.
One more tidbit sure to give shareholders a frisson: In the past six years, profits have soared close to 20 times faster than workers’ incomes.
None of this is a new story. It's been going on for more than three decades. Analyses like these just provide the latest details.
EPI provided another extensive, intersecting analysis of wage growth last month. Elise Gould pointed out that if inequality had not become its rise in 1979, middle-class incomes would have increased $18,000 more than they did by 2007.
In the three decades after World War II, Gould writes, "income growth was relatively strong and uniform across the income distribution." In the nearly three decades from 1979 to 2007, income growth was also strong, but it was concentrated in the top 20 percent of the population, and most of it went to the top 5 percent. Even when using so-called "comprehensive income" data—which includes non-cash income such as employers' contributions to healthcare premiums and government transfers via Medicaid, food stamps, etc., the inequality is stark. At 34.6 percent, the top 1 percent's share of average income was more than the 32.2 percent share of the bottom 80 percent of the population.
Gould calls the stagnation of hourly wages "the most important economic issue facing most Americans families and most of our key economic challenges hinge on whether or not hourly wages for the vast majority will grow." Some solutions are quite familiar to anyone who follows economic matters: raising the minimum wage, passing policies to protect and expand unions' right to organize, aggressively going after wage thieves, providing paid sick leave and medical leave, and altering the upward redistribution of income via tax policy.
Our foes have fought fang and claw against all such policy changes, not to mention any move toward reorganizing how we do work, say, for example, by giving cooperative structures the same kind of positive reinforcement and advantages now given to corporations.