As Income Inequality Rises, What’s Next for the American Economy?

Income-inequality

Photo courtesy of EduSolution Blog

Early last month, National Public Radio did a brief story about income inequality in America. NPR’s story isn’t new, exclusive or even special; it was one story in a pile of many about how the top one to 10 percent of American’s earn more than those at the bottom.

One of the more interesting parts of the story talks about how income equality has grown over the past few decades, not just the last few years. Many believe, and not by ignorance, that the canal between the top earners in this nation and those of the working class and poor was created when the great recession descended on America.

The NPR piece suggests that financial disparity has been on the rise since the 1970’s. It may have been accelerated when the housing bubble finally popped a few years ago, but the way we’ve compensated low-wage earners in this nation is pretty appalling.

Next, the report has a fascinating tidbit of information on the top one percent, or just wealthy Americans. They were actually hit the hardest economically by the recession. These individuals felt the brunt of the burst as their incomes dipped by almost 40 percent.

The caveat to that is that they recovered faster than the 99 percent and nearly 95 percent of financial gains since the end of the recession in 2009 went to the rich.

Take this into account: Since 2000, American wage growth has been futile. According to a report from the Economic Policy Institute, individuals with a college degree saw no growth in wages…at all.

Moreover, productivity has increased significantly since 2000 but compensation failed to grow with it.

So to recap, the working class and poor Americans are being asked to do more at work with little to no compensation as a reward. The top one percent had a hike of 20 percent in income in 2012 compared to less than one percent for the 99 percent.

Simply put, Americans aren’t being paid enough. If we want a lift into the middle class, wages have to rise.

But what do we do with so much vital information on how most Americans are compensated? It’s easy to place blame as it involves no heavy lifting, but what can we do to reverse this trend?

Is it a change in policy? A focus on new job training programs for those in the working class looking for promotion? How about more education subsidies for folks who want to go back to school?

As we sit in a time of political gridlock and unrest, what does that mean for an American economy that seems to favor the rich?

-JH

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One thought on “As Income Inequality Rises, What’s Next for the American Economy?

  1. Pingback: Take A Listen to the Latest Jason Henry Project Podcast | The Jason Henry Project

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