The first politician to trot out the line, “are you better off now than you were four years ago,” must have realized he was onto something big. It was Ronald Reagan, and he was terrific at the sound bite. Everyone has been using a version of that line ever since, and backing up their story with skewed statistics.
A troubling study from the Economic Policy Institute looks at decades of data and concludes that the gap between the rich and poor has cost the middle class enormously. The median income (the point at which an equal number of households are higher and lower than that income) has dropped, and would have been more than twice as high today if “wealth had grown equally across all households over this period.”
Key findings of the study:
- “Income equality has grown sharply since 1979.”
- “The typical worker has not benefited from productivity growth since 1979, though there has been sufficient economic growth to provide a substantial across-the-board increase in living standards.”
- Incomes for the middle class have not grown as fast as average incomes, and middle-income growth was much slower between 1979 and 2007 than it was between 1947 and 1979.
- Inequalities persist by race and gender, and child poverty has risen.
Ronald Reagan was the first major proponent of the “trickle down” theory, which states that if you give the rich more money, they will find a way to trickle it down in the form of jobs to the peasants. Although people bought this theory in 1980, and reelected him in 1984, there has been plenty of evidence that the theory has no basis. Yet this theory is touted again this election.
The economic divide increases the number of people in financial distress, and high unemployment makes discrimination easier to hide.