Redistribution

This is an old story by now, but a lot of people haven’t heard it, and Steve Greenhouse of the New York Times lines up the unhappy numbers effectively:

Wages have fallen to a record low as a share of America’s gross domestic product. Until 1975, wages nearly always accounted for more than 50 percent of the nation’s G.D.P., but last year wages fell to a record low of 43.5 percent. Since 2001, when the wage share was 49 percent, there has been a steep slide….

For the great bulk of workers, labor’s shrinking share is even worse than the statistics show, when one considers that a sizable — and growing — chunk of overall wages goes to the top 1 percent: senior corporate executives, Wall Street professionals, Hollywood stars, pop singers and professional athletes. The share of wages going to the top 1 percent climbed to 12.9 percent in 2010, from 7.3 percent in 1979….

From 1973 to 2011, worker productivity grew 80 percent, while median hourly compensation, after inflation, grew by just one-eighth that amount, according to the Economic Policy Institute, a liberal research group. And since 2000, productivity has risen 23 percent while real hourly pay has essentially stagnated.

Meanwhile, it’s been a lost economic decade for many households. According to the Center for Budget and Policy Priorities, median income for working-age households (headed by someone under age 65) slid 12.4 percent from 2000 to 2011, to $55,640. During that time the American economy grew more than 18 percent.

Emmanuel Saez, an economist at the University of California at Berkeley, found that the top 1 percent of households garnered 65 percent of all the nation’s income growth from 2002 to 2007, when the recession hit. Another study found that one-third of the overall increase in income going to the richest 1 percent has resulted from the surge in corporate profits.

Now you can argue back and forth about why this is happening. Perhaps the incomes of most working Americans are stagnating because they in fact are contributing less than before to the growth that benefits all, as compared to overseas labor or technology or the innovative genius of the people who happen to own the economy. But we shouldn’t just assume a system that is is ever-increasingly awarded an ever-higher share of the fruits of all our labor to the most privileged among us is “natural” or “efficient,” much less just or desirable. And most of all, this rampant evidence of an upward redistribution of national wealth should put a stop to the self-righteousness and self-pity of the very wealthy about concerns over income inequality or proposals to do something about it. They are beginning to sound like their class-bound English forebears, endlessly complaining about the impudence and ingratitude of their servants. It’s downright un-American.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.