Jacology: Middle Class Wages
(KPLR) – If you’re trying to stretch your paycheck further, you’re not alone. In Monday’s Jacology, Charles Jaco explains why paychecks aren’t growing.
If you’re like most of us, the last few years at work have been tough financially. You probably haven’t had a raise in years. You may have had your 401-K reduced or taken away. You’re paying more for your health insurance, if you’re lucky enough to have health insurance in the first place. You’ve seen co-workers laid off and you’ve been told times are tough and you should be grateful you’re working at all.
True, some things have been tough for some businesses. But overall, evidence suggests we’ve been lied to. Consider between 2000 and 2011, the median income for households headed by working-age people dropped by over 12 percent. In that same period, the U.S. economy grew 18 percent. American productivity soared 23 percent.
Or in plain English, the economy expanded. The U.S. economy became much more efficient. And our average incomes shrank. How did that happen? Easy. The real beneficiaries of all this business growth have not been workers. Stockholders and corporate executives have been the real winners. A study from the University of California finds in the past 12 years, 65 percent of all American income growth has gone to the top one percent of earners.
There’s nothing new about all of this. According to the Economic Policy Institute, worker productivity in the United States has soared eighty percent since 1973. And median wages after inflation have gone up ten percent. Put another way, the average American worker now produces almost twice what they did in 1973. But since Richard Nixon was president, real wages have only gone up ten percent.
Corporate profits and productivity have kept going higher. But the wages of the people responsible for all those profits and productivity have barely moved. For the past four decades, somebody’s been getting rich. But it’s not the average worker.
I’m Charles Jaco and that’s Jacology.