On this Labor Day, it's important to take a look at the numbers, and get an idea why we're in the two-tier society that exists today.
Here's the first, giving you a look at wages as a percentage of GDP over the last 65 years. The trend is hard to miss.
And it isn't because people aren't working harder or better. In fact, productivity has kept going up since World War II, but wages stopped growing with it about 35 years ago.
So where'd this extra productivity go? Right into the pockets of CEOs and stockholders, as corporate after-tax profits have nearly quadrupled since 2000, and are 30 times larger than they were in 1971- which also happens to be the time that wages as a percentage of GDP were at their height.
Not surprisingly, this increase in productivity and profits going to corporates directly correlates to a decline in the number of workers that are in unions. This is especially true in the private sector, where the percentages of jobs that are in unions were cut in half between the mid-1970s and mid-'80s.
Gee, the decoupling of productivity to wage gains also happened around the same time as '70s and '80s union-busting. What a coincidence!
Know what else has sent the average worker into stagnation? The failed belief that unrestricted trade with countries with lower work standards ends up as a win-win for the United States. Democurmudgeon had a good link to an EPI study that included these stunning pictures.
So to review: in the last 40 years.
1. Wages as a percentage of GDP has fallen significantly.
2. There are fewer people in unions with the power to stop this trend, and demand more money
3. With fewer checks on their power, productivity gains don't have to translate into better wages, so they become profits into the pockets of CEOs.
4. Unrestricted overseas trade has cost workers hundreds of thousands of jobs, and the threat of offshoring has also kept wages down.
Sometimes correlation truly is causation, and this is one of those times. It's time to reverse the failing course of the last 40 years. Which mean we must have reps in Congress that demand FAIR trade, with parity in wages and working conditions instead of the race to the bottom that has benefitted no one but fat cats. And it means that unions and strict regulations on businesses are needed more than ever, to level the playing field and get more of those record profits into the hands of real people that'll use that money for useful items, instead of stock repurchases and dividends that benefit very few.
So on this Labor Day, let's recognize that the U.S. economy is currently a losing game for the vast majority of people. And yes, changing the game will require a lot of this.