‘We were shocked’: RAND study uncovers massive income shift to the top 1%. By Rick Wartzman.
Just how far has the working class been left behind by the winner-take-all economy? A new analysis by the RAND Corporation examines what rising inequality has cost Americans in lost income—and the results are stunning.
A full-time worker whose taxable income is at the median—with half the population making more and half making less—now pulls in about $50,000 a year. Yet had the fruits of the nation’s economic output been shared over the past 45 years as broadly as they were from the end of World War II until the early 1970s, that worker would instead be making $92,000 to $102,000. (The exact figures vary slightly depending on how inflation is calculated.)
“We were shocked by the numbers,” says Nick Hanauer, a venture capitalist who came up with the idea for the research along with David Rolf, founder of Local 775 of the Service Employees International Union and president of the Fair Work Center in Seattle. “It explains almost everything. It explains why people are so pissed off. It explains why they are so economically precarious.” …
The RAND data also makes clear who the winners from inequality are: those in the top 1%. …
RAND crunched the data in all sorts of ways, and the basic pattern held true for part-time workers, entire families, men and women, Blacks and whites, urban dwellers and rural residents, and those with high school degrees and those with college diplomas.
Notice the turning point: 1971 (a highly recommended article that gets a lot of hits).
It is due to the financialization of the economy. The last link between money and gold was broken in 1971, which allowed the financial smarties to manufacture lots of money, unconstrained, and to dominate the asset shuffling game. Did you get your share? Probably not.