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40 Years Of Workers Left Behind (CHART)


"The big shift is really in the '80s, which I would attribute to [Fed Chairman Paul] Volcker's recession in 1980-82, which killed workers," said Dean Baker, co-founder of the Center for Economic and Policy Research, who has conducted similar studies. "A high dollar in the mid-80s amplified this effect. You also had the anti-union policies of the Reagan administration."

Since then, public policy has exacerbated the problem, according to EPI President Larry Mishel. "The continuing growth of the wage gap between high and middle earners is the result of various laissez-faire policies (acts of omission as well as commission) including globalization, deregulation, privatization, eroded unionization, and weakened labor standards," he writes. "The gap between the very highest earners -- the top 1 percent -- and all other earners, including other high earners, reflects the escalation of CEO and other managers' compensation and the growth of compensation in the financial sector."

This isn't a global problem, either. Some major economies -- the UK and Canada -- have experienced similar shifts, but others, including France and Italy, did not, according to Baker.

The consequences of not restoring the link -- and, thus, a rising standard of living for most workers -- are grim, and point to either persistent sluggish growth or recurring asset bubbles. But to accomplish this, Mishel argues, will require divisive policy shifts impossible in the current political climate. "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."

About The Author


Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at