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The Cost of Inequality: $42,000 per Median US Worker (


Does the moral arc of history bend toward neofeudalism?

Others have posited that it bends toward justice, of course, but the question that Eric Levitz poses in New York Magazine is provocative. And the data, certainly, illustrate the severity of the income shift that has taken place over the past 45 years.

Specifically, Levitz examines a study by Carter Price and Kathryn Edwards from the Rand Corporation. And, yes, that is the same Rand Corporation of Pentagon Papers fame, so it’s fair to call it an establishment-based source. Anyhow, Price and Edwards in their study, which was conducted in partnership with the Fair Work Center, ask the following question: If the share of worker income to total income were the same in 2018 as in 1975, and growth was the same, how much would the median worker earn in 2018?

The answer: $92,000. That’s a full $42,000 greater than the actual 2018 median worker income, which was $50,000.

This is a matter of simple math, but it is nonetheless a stark reminder of how much income has shifted over the years from labor to capital and from the median worker to the elite. It is a product of a sustained gap between growing productivity and stagnant wages. For example, an Economic Policy Institute study a while ago demonstrated that productivity (output per worker) had increased 74.4 percent between 1973 and 2013, while wages had risen only 9.2 percent during those same years.

To read more of Steve Dubb's article, please click here.

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