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Alright that's new to me. I was under the impression that real wages were falling, not stagnating. Still, most of the population is stagnated, but the top 1% are getting an increasing share of economic growth: That graph shows an increasingly escalating sine wave of returns going up to the top 1% of the population. On some years, like pre-2008, the returns on the top 1% go all the way to 300%. That's crazy. On top of that, it's making people angry, for very good reason, because if you look into behavioural economics and psychology, we have an innate sense of fairness that's being violated. And the social contract that maintains democracy includes the idea of fair work, fair rewards. It seems like you regard this sort of outcome, of massive income inequality and stagnating wages, as inevitable, or neutral. I don't and many other people don't. They're angry about it and they're voting for Trump, or fighting for higher minimun wages, or unionizing. And historically those things (political change, collective bargaining) have in fact ended up giving higher percentage of the profits to the workers and citizens involved in the manufacturing of the products that are making so much money for capital. This is exactly what global trade is destroying, and people are getting increasingly angry. Look, I just think you need to reconsider, globally, the psychological effect this sort of thing has on the population. Since 1973 the median wage has grown at a 0.2 percent annual rate. 0.2 percent! And the return is slowing down since 2000. Source: https://thinkprogress.org/wages-have-been-stagnant-for-40-ye... |
Yes, I understand why people are angry. People get angry about all number of thigs, more or less justifiably.
The problem is that most of the cures being proffered for this percieved unfairness will not solve the problem. To reduce the disparity between the wealthiest and the rest, are people talking about, you know, ending mortgage and property tax deductions, liberalizing the education sector, permitting more housebuilding, ending moral-hazard-generating bailouts of companies and banks? A little, but hardly. What you hear is that the "people" want tariffs (impacting the poorest, who disproportionately consume cheap imports), higher minimum wages (which slightly raise the incomes of some workers, at the expense of making youth, people with minimal educations, ex-prisoners and the disabled unemployable), and trade unionization (which benefit those in the union, but those shut out of the union scarcely at all.)
I'll also note that this era of stagnation for the developed-world middle class has also coincided with a huge growth in the incomes of most of the rest of the world - these are not totally unconnected. Sure, we can be nationalists about it, but there are big benefits to the rest of the world from globalization.
I think there are sensible ways to diminish these income disparities. But I don't really that many people advocating for them - mostly I hear the old protectionist mantras, and I just do not agree with that.