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How the UAW strike represents the larger problem of a shrinking middle class


For more on the state of American labor and economic disparity, we've got David Wessel with us. He's director of the Hutchins Center at the Brookings Institution. Good morning, David.

DAVID WESSEL: Good morning, Leila.

FADEL: So what do you think about Senator Sanders' description of the economy?

WESSEL: Well, Senator Sanders is absolutely correct that by any measure, there's been widening inequality in the United States over the last 50 years. A growing share of income and wealth has gone to the very best off people. But the official government measures show that the typical American worker is actually making more than he or she did 50 years ago. So, for instance, I looked it up, the Labor Department's measure of median weekly earnings for wage and salary earners, that's about $1,100 a week now. If you adjust for inflation, it's up, but only about 10% over the last 50 years.

FADEL: So we heard earlier from a retired autoworker, Adolphus Lyles, and he remembers a time when a family could get by on one income, own a house, take vacations, afford to send their kids to a state college. And now autoworkers can't afford the cars they're making. So why is that out of reach?

WESSEL: I think he's right. So from the end of World War II to around 1973, the U.S. economy did very well, and living standards for the typical American family rose steadily, although there's a danger in painting the path to some kind of economic nirvana, especially when you think about what it was like for African Americans and for many women. But for a variety of reasons, the U.S. economy didn't deliver as well for many Americans after the mid-'70s. We've had some spurts of strong growth and shared prosperity as in the late '90s, but it's true that to pay for what many of us now think of as the element of a middle-class lifestyle does often take two incomes instead of one.

Of course, I think you have to look beyond dollars and cents. There are many ways in which our lives are a lot better than they used to be - cars are safer, air and water are cleaner, most of us have cellphones that have more computer power than supercomputers did a generation or two ago and we have new vaccines. I mean, in the early '90s, there were more than 4 million cases of chickenpox every year. Now we're down to something like 150,000 because we've invented a vaccine.

FADEL: Yeah. If you're able to afford the things that you described. So let's talk about the inequality here. We've seen a widening gap between the have-mores and the have-less. Haven't we seen that, and what's causing it?

WESSEL: Yeah. We have. So there - I think there's lots of things going on. More educated workers have done much better than those with less education. The gap, as Senator Sanders said, between the pay of chief executives and ordinary workers has widened enormously.

FADEL: Yeah.

WESSEL: Now, the tax code and the federal benefits do reduce inequality but not as much as the market has widened it. In many walks of life - in corporations, baseball teams, law firms - we've also seen a winner-take-all phenomenon where the very best, much, much better than the typical than it was in the past. One interesting development, though, wages have been picking up lately for most workers, but they haven't compensated for the inflation we've seen since the beginning of the pandemic, except for wages of workers at the bottom. The folks who make 13 and $14 an hour actually have seen their wages go up faster than inflation, even though the rest of us have not.

FADEL: David Wessel is with the Brookings Institution. Thank you, David.

WESSEL: You're welcome.


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