Reich is offering an online course, “Wealth & Poverty”, that started today. I watched the first lecture, “What Happened to Income and Wealth?” Looks like this will be worth some ongoing effort. I suggest being ready at the fast forward button for the parts of the class when Reich is querying the students and using various digital polling tools that seem to be standard issue in university lecture halls.
After the introductory blather, he opens with a chart that I first saw four or five years ago and have come to think is the single most important graph to introduce questions about what has happened in America over the last 50 years. He has obviously updated the data. BTW – productivity is a measure of how much output you receive for each $ of labor input. Note that from the end of WWII to roughly 1980 the post Depression political bargain between labor and capital produced an equitable sharing of the increases in productivity. This drove the emergence of the fabled American middle-class even admitting to the other egregious flaws of society, for example, race and sex discrimination. Something happened beginning in the early 1980s that caused a breakdown. The rest of the story we have lived through.
This produced the flatlining of average wages – $20.27 per hour in 1964 (2018 dollars) rising to $22.65 per hour in 2018. 11% growth in real wages in more than 50 years!
This in an economy that has grown from $2 trillion in 1947 (2012 constant dollars) to over $19 trillion today.
These three charts establish a baseline of facts that need to be studied and explained. Embedded here is much of the story of our politics, social relations, and economy during our lifetimes. Needless to say, if you look at wealth distribution over this same 50-year period, the results are even more startling.