In a recent report previewing the Economic Policy Institute's upcoming State of Working America analysis, EPI president Lawrence Mishel explained how American workers have been cut out of sharing in economic prosperity during the past 30 years, citing a divergence of pay and productivity as a key driver of growing income inequality in the United States.
Mishel noted that although American workers' productivity has steadily increased, their pay has remained largely stagnant over the past three decades. Mishel explained that "[t]his divergence of pay and productivity has meant that many workers were not benefitting from productivity growth -- the economy could afford higher pay but it was not providing it."
Here's more from Mishel:
A key to understanding this growth of income inequality -- and the disappointing increases in workers' wages and compensation and middle-class incomes -- is understanding the divergence of pay and productivity. Productivity growth has risen substantially over the last few decades but the hourly compensation of the typical worker has seen much more modest growth, especially in the last 10 years or so. The gap between productivity and the compensation growth for the typical worker has been larger in the "lost decade" since the early 2000s than at any point in the post-World War II period. In contrast, productivity and the compensation of the typical worker grew in tandem over the early postwar period until the 1970s.
Productivity growth, which is the growth of the output of goods and services per hour worked, provides the basis for the growth of living standards. However, the experience of the vast majority of workers in recent decades has been that productivity growth actually provides only the potential for rising living standards: Recent history, especially since 2000, has shown that wages and compensation for the typical worker and income growth for the typical family have lagged tremendously behind the nation's fast productivity growth.
Mishel included a chart further illustrating this pay and productivity gap:
Mishel concluded his analysis by recommending three keys to closing the gap: improving labor standards, increasing the minimum wage, and allowing workers collective bargaining rights:
It is hard to see how reestablishing a link between productivity and pay can occur without restoring decent and improved labor standards, restoring the minimum wage to a level corresponding to half the average wage (as it was in the late 1960s), and making real the ability of workers to obtain and practice collective bargaining.
Few have done more to poison the discussion about initiatives that could get struggling American workers back to sharing in economic prosperity than the right-wing media, led by Fox News, who have consistently demonized and vilified these efforts.
Right-wing media figures cheered efforts in Wisconsin to strip workers of collective bargaining rights and attacked protesters as "violent," "rabid," "parasitic" and "maggot-infested" people who engage in "thuggery." They have repeatedly attacked efforts to boost the minimum wage and improve labor standards.
Moreover, right-wing media figures constantly attack programs designed to designed to aid struggling Americans, including SNAP benefits, the Earned Income Tax Credit, job training programs, student loan relief, and unemployment insurance.
The demonization of these efforts make it clear: The right-wing media are working against the interests of struggling Americans.