2. The debate over inequality
Last week, we reported that the wage inequality gap in the U.S., a primary source of the polarization among Americans, has been shrinking. For five straight quarters, wages have been growing the most for U.S. workers with only a high school diploma.
But readers pushed back:
- "Surely you're kidding?" writes James Harvey, executive director of the National Superintendents Roundtable. The percentage wage increase is better for high school graduates, he says, but the dollar increase still favors the rich. A 3.3% raise for someone making $20,000 a year is $660 — only an eighth of the $5,000 raise going to someone earning $500,000 and getting a 1% increase.
- Upwork CEO Stephane Kasriel tells me, "The 1% is doing a lot better, and for the 30% and 40% at the bottom, it keeps getting worse."
Quick take: The times do indisputably favor the rich.
- When adjusted for inflation, U.S. wages are up only 10% from almost a half-century ago.
- Wealth held by the top 1% has surged. It rose to 38.6% of the total in 2016, from 36.3% in 2013, the Fed said in a report in September, while the bottom 90%'s wealth has fallen for almost three decades.
Yes, but: There are, in fact, signs of an improvement in the fortunes of ordinary people, and wages and salaries are among them, says Jed Kolko, chief economist at Indeed. Kolko wrote the blog post on which we were reporting.
- Wages and salaries reflect 77% of total pre-tax money income, which includes interest, dividends and income from property, according to this BLS report (pages 8-9).
Thought bubble: Inequality is not an absolute metric. If it were, ordinary people could legitimately lash out about the 1% whether they themselves were doing well or not. Regardless of concentrated wealth, it remains notable that wages are no longer stagnant or dropping in real terms — the numbers point to growing paychecks, and more jobs, for those whom the economy has been leaving behind.
A final thought: I am grateful for the time everyone took contributing to this conversation. Please keep the notes coming as we follow this story in the coming months and beyond.
Read the full story here.