Most Workers Shut Out of Wage Gains in Past 40 Years

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Brian Beutler reports in Talking Points Memo that the liberal Economic Policy Institute is coming out soon with a new edition of their annual report, ‘The State of Working America.” A graph from the upcoming report, Beutler writes, is “a stark illustration of the fact that the vast majority of workers have been closed out of the country’s gains for nearly 40 years.”

Particularly striking is the fact that for years leading up to the 1970s, productivity gains were broadly shared, as theory predicts. Then the linkage abruptly broke. What explains the shift?

“The big shift is really in the ’80s, which I would attribute to [Fed Chairman Paul] Volcker’s recession in 1980-82, which killed workers,” said Dean Baker, co-founder of the Center for Economic and Policy Research, who has conducted similar studies. “A high dollar in the mid-80s amplified this effect. You also had the anti-union policies of the Reagan administration.”

40 Years of Workers Left Behind

Read more about “40 Years of Workers Left Behind” at Talking Points Memo »

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  • JonThomas

    I was watching the show “America Revealed”  that aired on PBS the week of 4/30/12.

    They seemed to be accentuating the “efficiency” of modern American Manufacturing.

    They showed graphs on maps of the country of in which the number of factories with 1000 workers or more from decades ago and compared it to now. Much fewer workers were being used to run factories.

    Then they showed graphs that compared “value” of goods produced. The graphs representing modern factories showed much greater value for the goods produced.

    The piece went on to highlight robotics and efficiency.

    Supposedly we are competitive with other nations for value of goods produced. “A triumph for American Innovation.”

    Not only have wages stagnated, but less workers are being used and the producers are making even more profits. Perhaps this is good for the GNP, but we are still waiting for even a little of that to trickle down.

    The 1% may claim over and over again that they are job producers but the facts do not bear out those claims.

    Higher profits are being made from fewer workers who are making lower wages (especially when adjusted for inflation.)

  • JonThomas

    “Much fewer workers were being used to run factories.”

    Ooops…should read..

    “Many fewer workers ARE being used to run factories today.”

  • Charles Hodgkinson

    For me the moment that ended for workers was many years ago. I remeber that moment as the day S&L’s were deregulated.  I new without a Ph’d that to prove it, that we workers no longers had a right to a home, but homes became a commodity, like pork belleys, corn futures, etc. I knew in my gut that the debacle of the wall street collaspse, would happen, but in only in the broadest terms. Well I lost our home to foreclosure,  here I am where I was 55 years ago in Chelsea, Ma. a three story, 6 family walk up, at the age of 64 in a 3 story , 6 framily walkup in Gardner, MA today.