Why Wages have Stagnated and their Impact on the American Dream

CashBy Dwyer Gunn

Pacific Standard

If there’s one thing that the candidacies of Donald Trump and Bernie Sanders have made clear, it’s that people in America are not happy with the status quo. They’re not happy with the economy, they’re not happy with the rising cost of health care and college, and they’re not happy with a modern world in which previously well-paying jobs can now be performed by computers or workers overseas.

Trump supporters are overwhelmingly white, lack college degrees, and are drawn from exactly the kinds of places that have been decimated by a rapidly changing economy that favors coastal computer coders, doctors, and financiers over miners and factory workers. (Although recent events suggest his base is growing.)

Sanders, meanwhile, draws his support primarily from young voters who have gravitated toward his big plans and perceived independence from the standard political establishment. Both demographics illustrate just how widespread the frustration with our current economic model has become.

Over the last 40 or so years, the real wages of most Americans have essentially stalled, with the exception of a brief period of prosperity in the late 1990s. For much of the 1980s and first half of the ’90s, the trend primarily affected middle- and lower-income American workers, but since the beginning of this century, workers across almost all of the income distribution have seen their wages stall. In fact, the economic boom of the late 1990s was the only time in recent history when Americans’ wages increased.

Where did we go wrong?

Continue to full article . . .

Picture: Revised by Reworked (Own work) [Public domain], via Wikimedia Commons

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