From Fortune:
The American middle-class ideal was forged in the decades after World
War II, when economic growth and wage increases climbed in lockstep for
nearly 30 years. That pairing dissolved abruptly in the 1970s. Between
1973 and 2017, according to the Economic Policy Institute, the
productivity of the economy grew 77%—but average compensation rose only
12.4%, adjusted for inflation.
This divergence coincided with a shift in economic
gravity, away from manufacturing and toward services and “knowledge
industries.” That shift weakened the labor unions that had helped
rank-and-file workers in many professions claim a bigger share of the
bounty. Just as important were tax reforms that favored investment and
real estate earnings over wage income. The upshot: an economic order in
which the capital-owning class enjoys great advantages—and the costs of
admission to and exclusion from that class grow ever higher.
The Tightening Squeeze of City Living
The information revolution has increased the
concentration of jobs in certain U.S. cities, especially in a few hotly
competitive coastal metro areas. That dynamic has driven housing costs
beyond what many middle-class earners can afford, making it harder for
them to save for home ownership or other financial goals. (The median
U.S. hourly wage was $27.35 in November; it’s lower in most of the
Midwest and South.)
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