Wage Stagnation: Our Central Economic Challenge

[Content Note: Class warfare.]

This economic report by Elise Gould for the Economic Policy Institute is a must-read: "Why America's Workers Need Faster Wage Growth—and What We Can Do About It." Here is just part of the intro:

The last year has been a poor one for American workers' wages. Comparing the first half of 2014 with the first half of 2013, real (inflation-adjusted) hourly wages fell for workers in nearly every decile—even for those with a bachelor's or advanced degree.

Of course, this is not a new story. Comparing the first half of 2014 with the first half of 2007 (the last period of reasonable labor market health before the Great Recession), hourly wages for the vast majority of American workers have been flat or falling. And even since 1979, the vast majority of American workers have seen their hourly wages stagnate or decline—even though decades of consistent gains in economy-wide productivity have provided ample room for wage growth.

The poor performance of American workers' wages in recent decades—particularly their failure to grow at anywhere near the pace of overall productivity—is the country's central economic challenge. Indeed, it's hard to think of a more important economic development in recent decades. It is at the root of the large rise in overall income inequality that has attracted so much attention in recent years. A range of other economic challenges—reducing poverty, increasing mobility, and spurring a more complete recovery from the Great Recession—also rely largely on boosting hourly wage growth for the vast majority.

Emphasis mine.

There's so much good information in this article, which makes clear how wealth redistribution upwards has been happening; how theft of both workers' wages and productivity have enriched the top 1%; and how increasing income inequality stagnates quality of life improvements for the vast majority of the population, whose labor is being harvested by the top 1%.

In recent decades, the vast majority of Americans have experienced disappointing growth in their living standards—despite economic growth that could have easily generated faster gains in their living standards had it been broadly shared.

...It is clear that most of the overall income gains from 1979 to 2007 bypassed the vast majority of American households. As such, their living standards are lower than they would be had these gains been shared more broadly. In other words, there is a growing wedge between economy-wide average income growth and income growth of the broad middle class—a wedge we sometimes refer to as the "inequality tax"—that has effectively reduced middle-class incomes.

...The U.S. economy has generated enormous amounts of income in recent decades, even in the post-1979 period when overall growth slowed. It can certainly provide far faster growth for the broad middle class than it has over the past generation, and its failure to do so is an economic catastrophe.

Our economy is being destroyed by greed. People's lives are being destroyed by greed. It is not that there isn't enough to go around. It's that the 99% are busting our asses so that the 1% can accumulate more money than they could spend in a hundred lifetimes.

We know this intuitively, but Elise Gould's work here makes the irrefutable case.

[Related Reading: The Haves and the Have-Nots.]