In a new editorial [A Rising Tide?], the Washington Post today discovers the massive inequality that pervades every niche of American life. It is sad that this center-right newspaper exhibits more passion on the issue than most “left” or “progressive” sources.
“In the 25 years from 1980 to 2004, a period during which U.S. gross domestic product per person grew by almost two-thirds, the wages of the typical worker actually fell slightly after accounting for inflation. So, too, did wages for the 50 percent of the work force that earned less than the typical, or median, employee. The rising tide helped only workers at the top. Wages for workers in the 90th percentile — that is, workers who earned more than 90 percent of their peers — jumped by more than a quarter.”
The Post clearly reject arguments that these problems are temporary:
Depending on which statistics you choose, the tide is either not lifting most boats or lifting many of them modestly. At times over the past quarter-century, commentators have hoped that this disappointing performance was temporary. Perhaps it was caused by a one-time shock from the arrival of the personal computer, which made junior clerical workers less valuable? Perhaps it reflected a one-time jump in competition from foreign workers following the creation of the World Trade Organization and the North American Free Trade Agreement? Or maybe it reflected social pathologies among the poor that could be changed by welfare reform? All these theories had their day; but after a quarter-century of disappointment, the struggles of Americans in the bottom half of the income distribution cannot be viewed as temporary.
They also make clear that this rise in inequality makes life worse for the vast majority:
The idea that everyone should start life with decent opportunities helped to inspire the American Revolution and the civil rights movement; it is an idea that this nation forsakes at its peril. But there are other reasons to worry about inequality. Surveys find that if you ask people whether they’d prefer to earn $100,000 in a society in which the average pay is $80,000, or $110,000 in a society in which average pay is $130,000, respondents pick the lower salary in order to feel rich in relative terms.
This isn’t just irrational. Riches and poverty are partly relative concepts. The more unequal a society, the more citizens in the bottom half will experience hardship. When people at the top gain more disposable income, they bid up the prices of goods in limited supply — homes in top school districts, or places at top colleges. Tuitions at four-year colleges have more than doubled since 1980, with the result that gaps in enrollment by class and race, which declined in the 1960s and 1970s, are as wide now as 30 years ago. The wealth of people in the top half also bids up the common understanding of what a middle-class lifestyle entails. People feel obliged to spend more on birthday gifts, children’s sneakers or a suit for the next job interview. Since 1980, the median size of a newly built house has increased by a third — even while the household savings rate has fallen to about zero.
Of course, it would be ridicuous to expect the corporate Democratic Party to raise the issue of inequality in any serious way. But how about the more radical left? Where are we?
2 comments March 12th, 2006