A Guest Editorial: Wage stagnation hurts economy
Here’s some cheery news for class warfare enthusiasts: The gulf between the richest 1 percent of the Americans and the rest of the country reached its widest level in history last year.
USA Today reports the top 1 percent of earners in the U.S. pulled in 19.3 percent of total household income in 2012, which is their biggest slice of total income in more than 100 years.
That’s according to a an analysis by economists at the University of California, Berkeley and the Paris School of Economics at Oxford University.
The very rich haven’t claimed this big a piece of the pie since the Gilded Age in 1927, when the group claimed 18.7 percent. The analysis is based on data from Internal Revenue Service data.
In a separate analysis, USA Today reports the top 1 percent of earnings posted 86 percent real income growth between 1993 and 2000.
Meanwhile, the real income growth of the bottom 99 percent of earnings rose 6.6 percent.
Average middle class income has actually fallen by about 5 percent since the Great Recession.
Beyond the obvious issue of fairness — the people doing the work aren’t fairly sharing in the gains — income inequality hurts economic growth: Stagnant wages are one reason the economy isn’t performing better.
And the situation isn’t good for democracy: Economic power tends to create political power, even in advanced countries like the United States. If living standards don’t pick up, look for political upheaval and a resurgence of unions on the horizon as ordinary Americans get frustrated and angry with the short end of the stick. • • •
This editorial was initially printed in the Detroit Lakes Tribune, a Forum Communication Company newspaper.