For four decades, the U.S. and the West at large have seen a stark and almost-uniform trend: the number of jobs has grown and the unemployment rate dropped, but average incomes have not. The bulk of the economic fruits in the U.S. and much of Europe has steered to the top, while relatively low-paying jobs -- now almost a quarter of Germany's working-age population, versus 15% in the mid-1990s -- have swelled.
Over the last year, this economic dynamic has spilled over into political instability on both continents. Manufacturing belts with outsized financial anxieties unexpectedly went to Donald Trump's column last year, and he was elected president; a similar phenomenon played out in the U.K. They and other countries have sought to buck the "establishment." And there is no sign that the economy in the U.S. and elsewhere is going to suddenly lift many more boats — fuel for more political chaos.
We asked five experts the following question: How do we avoid the political instability of stagnant income?
- Robert J. Gordon, economics professor, Northwestern University, author The Rise and Fall of American Growth: The political pendulum will swing back
- Darrick Hamilton, director of urban policy, the New School: The dice should not be loaded
- Edmund S. Phelps, Nobel laureate and economics professor, Columbia University: Give us grassroots innovation
- Lyman Stone, agriculture economist, USDA: Resist the taker-state
- Tobias Stone, founder, Newsquare: Inequality shatters societies