Like many of you, the Patriotic Millionaires will be sitting down with our friends and family in the days ahead to give thanks for the blessings of the previous year, celebrate our achievements, and commiserate with our communities. By most objective measures, there is much to which we can toast: from the recent successes of organized labor to declining inflation and a strong job market, macroeconomic indicators are signaling that the nation is entering an era of relative economic prosperity.
And yet, as we’ve discussed before, despite positive trends in traditional economic markers, workers still feel insecure. The question is: why do workers – and the Patriotic Millionaires, for that matter – continue to feel so much anxiety this Thanksgiving? How can the data show economic boom times while workers continue to feel pinched? If this is an era of plenty, why do we feel stretched so thin?
For this week’s Closer Look, we want to zoom out a bit and focus on the big picture – and add some perspective about what can be done to mollify America’s economic anxiety.
Workers Fell Behind
This anxiety is a long-standing trend and predates our current economic conditions. As the COVID-19 pandemic subsided as a weight on our economy, the Biden presidency oversaw a remarkable recovery. At least, a recovery in the ways economists traditionally measure one. GDP is rising at a fast enough clip to recover and exceed pre-pandemic GDP losses, jobs are plentiful, and average wages are climbing.
The talking heads, wearing their partisan blinders, tout these economic indicators as indicative of the whole story, when in fact they are anything but. Inflation, spurred by a combination of global economic factors and dramatically exacerbated by corporate price gouging, short-circuited the gains workers might otherwise have felt. Indeed, until recently, inflation was rising faster than wage growth, essentially erasing the buying power of the average family.
Many prominent economists continue to insist that the economy is fundamentally sound, as those topline numbers continue to trend upwards. The trouble is that the vast majority of the gains are being vacuumed up by the ultrarich, even as wages see a small amount of growth.
The situation has become astonishingly top-heavy: the Federal Reserve estimates that while the top 1% of households hold 31.4% of all wealth in the United States, the bottom 50% of households hold just 2.5%. As Karen Petrou, a managing partner of Federal Financial Analytics, mused in a recent guest essay in the New York Times, “The mortal enemy of Bidenomics [the President’s narrative on the economy] isn’t Donald Trump; it’s a reliance on aggregate and average numbers that mask the nature of the economy Americans experience. Focusing on G.D.P. is a mistake, as it obscures the range of financial success and hardship in an economy as unequal as that of the United States.”
In other words, America’s economy has grown into a behemoth on the backs of increased worker productivity, but the gains have not been evenly shared.
This trend – ongoing since the late 1970’s – is leaving the working class feeling suffocated under the weight of wealth concentration. As the ultrawealthy amass more riches, workers must work twice as hard for half as much. Their share of the nation’s wealth has shrunk, and for the first time in American history, a generation of Americans will be materially worse off than their parents. It’s not just an economic issue; it’s a societal crisis. This trend and the anxiety it created have already had electoral consequences, and there’s no reason to think this will abate unless there’s a fundamental shift in the status quo.
Policy Choices
These trends are the direct consequence of deliberate policy choices. Oftentimes, policy debates feel esoteric and detached. But the real-world effects on workers have been devastating, both materially and socially.
In 1980, the United States had the highest life expectancy of any affluent nation. Now, America has the lowest life expectancy, behind Britain, France, Germany, Canada, Japan, South Korea, and even less affluent countries like China or Chile. It will sound melodramatic, but the truth is that deregulation is killing Americans.
We know exactly why. A Washington Post analysis, which we recommend you read in full, lays it out starkly. It notes that “For much of history, there has been a direct link between economic growth and people living longer.” But that’s no longer the case in the United States:
“As far back as the 1970s, experts showed that as countries got richer, the gains from their wealth in terms of life expectancy became smaller. But what is happening now with the United States is something else entirely… And it’s not just a matter of divergence between other high-income nations and the United States. Even within the United States, the disparities are stark: How long you live often depends on where you live. … the gap between the richest and poorest areas was far wider than in other wealthy nations.”
In other words, the United States is still getting wealthier, but none of the material or health gains that typically come with rising wealth are being felt by workers. On the contrary, policy choices within the United States are making matters even worse.
Premature deaths, particularly in red states, are coming from preventable causes exacerbated by deregulation, the erosion of workers’ rights, and the subsequent declining economic conditions. Job opportunities in red states are drying up, and the jobs that remain aren’t paying sufficient wages to their workers. Healthcare has become more expensive, and workers are finding it harder to access. None of this was inevitable. These things are a predictable consequence of the policies advocated for and enacted by Republicans to gut the power of workers and the safety nets that keep the middle class robust.
Giving Thanks and Being Hopeful
David Leonhardt, a senior writer at the New York Times, has a new book that encapsulates much of what we’re discussing here. He explains how American workers’ power declined in recent decades and why they feel so much angst, but crucially, Leonhardt offers up a hopeful note on fixing these problems: “The central lesson … [of] the past century of the American economy is that it can change, sometimes much more quickly than people expect. When it has changed in a major way, it often has been because Americans have used the political system to change it. The future can be different from the past.”
We know what the solutions are. First and foremost, it’s imperative that the United States tax extreme wealth. The OLIGARCH Act would rein in excess wealth, stabilize our socio-economic conditions, and bring American billionaires to heel. It would enable workers to share in the prosperity they created.
Second, organized labor must continue to flex its muscles in the face of corporate power. The success of unions this year like the UAW, the Writers Guild, the Teamsters, and the Coalition of Kaiser Permanente Unions – just to name a handful – are exemplary of the dramatic gains workers can make when they organize.
Third, we must be steadfast in our belief that change is not only possible but within our grasp. We know these challenges are not intractable because we’ve solved them before! The progressive era brought an end to the Gilded Age by empowering workers, enfranchising women, breaking up monopolies, and protecting consumers. So the challenge is not finding the solutions; it’s mustering the political will to enact them.
This year, the Patriotic Millionaires are thankful for those who are advocating for a more equitable economy, for workers, and for all of you who are in this fight with us.
Happy Thanksgiving!
