Almost Everywhere: Surging Inequality and Falling Real Wages
The rapid and widespread increase in inequality in income in the United States over the past two decades has traditionally been the province of countries experiencing a revolution or a military defeat followed by occupation. Indeed, this is first time since the collection of income data began that the median real wages of American males have consistently fallen over a twenty-year period. And never before have a majority of American workers suffered real wage reductions while the real per capita gross domestic product (GDP) was increasing. 1
As we shall see, the facts are indisputable; moreover, some of these facts fly in the face of conventional economic theory. The reasons why these trends that so adversely impact the American worker -- and increasingly all workers -- have taken place are disputable, as are the long-term effects and remedies.
President John F. Kennedy talked about a "rising tide raising all boats" in his 1961 inaugural address, but by the early 1970s, what had traditionally been true in the United States was no longer true. The tides could rise yet most boats could sink. Indeed, in May 1993 Newsweek headlined a story