With the recent Occupy Wall Street movement and chants of 'the 99 percent' still echoing across America, it's no surprise that many Americans are becoming aware of the wealth inequality snaking its way through the economy. A recent study has identified what appears to be another culprit of this growing problem.
The above graph from the Economic Policy Institute has started to trend online as a classic representation of just how unfair and unequal our current economic situation really is. As you can see, starting around the mid 1970's, American's hourly compensation has completely levelled off while those same workers' productivity has continued its steady ascent.
The Economic Policy Institute notes that while productivity (a measurement of goods and services provided per hour worked) has risen by an impressive 80.4% from 1973-2011 while hourly compensation has grown a measly 10.7% in the same time span. These findings are especially troubling considering the fact that between 1948 and 1973, these two measure improved at the exact same rate.
"A bigger share of what businesses in the U.S. are producing is going to the owners of the firms and the people who lent money to the firm, and a smaller share is going to workers," said senior fellow in economic studies at The Brookings Institution, Gary Burtless.
This appears to be yet another example of a capitalist system gone awry, wherein those with the means are able to realize ever-increasing profits by holding their laborers to an ever-increasing standard of productivity.
In an expanding, hiring-friendly job market, such a disparity usually goes unnoticed. People can land a job fairly easily for close to what they would expect to make. However, during these rough economic times where people are excited to get any job at all, this economic reality leads to an outlook that can have hundreds of applicants jockeying for a single overworked, underpaying job.
"It is hard to see how reestablishing a link between productivity and pay can occur without restoring decent and improved labor standards, restoring the minimum wage to a level corresponding to half the average wage (as it was in the late 1960s), and making real the ability of workers to obtain and practice collective bargaining," notes Larry Mishel of the Economic Policy Institute.
While this is would certainly seem to be a reasonable solution for correcting the wage inequality in America, with the recent de-unionization efforts in states like Wisconsin and Michigan, chances are that we will not being seeing those changes any time soon.
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