COLUMN: With productivity at an all-time high, why aren’t workers reaping the benefits?
Since 1979, the rate of productivity and average wages have diverged, which may be contributing to an increasingly unjust economy.
Feb. 09, 2021
Galen Zavala Sherby is a sophomore journalism major at MU. He is an opinions columnist who writes about politics for The Maneater
As COVID-19 continues to take a toll on the U.S., Americans ask questions about how our economic system works. Despite the political polarization within American society, political figures will often agree that the economy does not work for everyone.
For much of the first half of the 20th century, American productive and economic power grew at an astronomical rate. According to The Balance, during the 1920s alone the economy grew by 42%. Despite the problems presented by the Great Depression, the U.S. generally remained a predominant economic superpower in every sense.
The standard of living enjoyed by middle-class white people reflected the massive quantity of wealth and power in this country during the era prior to the Civil Rights Act. The American economy under Jim Crow was not built for or explicitly served any demographic group outside of the white majority.
However, at least one major assumption about the way that our economy is meant to work has changed dramatically since then. According to the Economic Policy Institute, productivity increased by 69.6% since 1979, while the average compensation in wages across the entire economy has grown by 11.6% over the same amount of time.
Prior to 1979, these two numbers had risen at almost identical rates. The sheer productivity of the U.S. was tied to how much people were getting paid on average. There are many reasons for this change. The largest factors are the proliferation of automation, an increasingly globalized world economy and a very hands-off approach to big businesses by the U.S. government.
Beginning with automation, robots replaced vast swathes of the workforce in industrial sectors. According to MIT, nearly half a million jobs were lost to automation between 1990 and 2007 alone. Furthermore, the Brookings Institution states that nearly a quarter of all jobs done by humans today are considered at “high risk” of being lost to automation in some way or another in the coming years. As robots become a fundamental part of the economy, they will drive productivity while ensuring wage growth stagnates as desperate people accept lower-paying jobs.
The globalized economy has also meant that an increasing number of jobs are being exported overseas by large corporations to exploit workers in other countries and pay them substandard wages. This leaves more Americans unemployed or underemployed in the process and further intensifies the crisis for workers here and abroad as well. Outsourcing ensures that corporations do not have to follow fair labor standards or decent working conditions for their workers.
Finally, a government that refuses to effectively regulate the economy only makes these issues worse. Lobbying by the wealthy in Congress ensures that legislative efforts to soften the blow on the working class are not passed. A Princeton study indicates that the U.S. functions more like an oligarchy than a democracy, which guarantees that policy only reflects the will of wealthy people. This further enables the worrying trends we’ve seen for the past 50 years.
The question we’re left with is where this excess wealth that workers aren’t receiving is going. Given the overabundance of ultra-wealthy people that this broken economy has generated, these unpaid wages are likely funneling into the hands of the ruling class. Wages that previously represented the growth and economic wellbeing of our country as a whole are now permanently kept down — enabling more and more profits for people who are already ludicrously wealthy.
There is no easy answer or solution to this problem, but the first step is to recognize that it’s happening. We must strive for increased awareness of the economic state of the union, or else the economic desperation this pandemic is bringing may never go away.
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Edited by Sofi Zeman | email@example.com