GOP's Trickle-Down Promise Is A Myth - Money Flows Upward

The following is part of a post by Ali Velshi at MSNBC:

For more than 40 years, we’ve been sold a myth: that America’s rich and powerful were under siege — over-taxed, over-regulated and carrying the weight of the economy on their shoulders.

We were told that if you ease up regulations on the rich, they will prosper and the benefits will trickle down to the rest of the population. But the reality is that economic policy has only succeeded in rewarding the rich — and it’s done so at the direct expense of the middle class, the working class and the working poor.

Let me explain the root of the problem: According to the Economic Policy Institute, largely due to new technology, U.S. worker productivity grew 59.7% from 1979 to 2019, meaning workers have become almost 60% more productive at their jobs in the past four decades.

However, a worker’s reward for all that extra output over the same period has only been a 13.7% wage increase.That’s a gap of 46% between what workers are being underpaid relative to their output. In more practical terms, that’s about $9 an hour in lost potential earnings for the typical worker.

Let’s focus on just the middle class for a moment: From 1979 to 2019, middle-income workers saw just 13.7% growth in wages, adjusted for inflation. America’s lowest-paid workers fared worse, gaining just 3%. But the already high earners, the top 1%, their income grew by 160% over the same period. For the top 0.1%, their income grew by a staggering 345%.

Consider all the income earned by households in the U.S. in a given year. The share of that total U.S. household income going to the middle class was 62% in 1970. By 2022, it had dropped to 43%. The upper-income share did the opposite: It was 29% in 1970 and rose to 48% in 2022, according to the Pew Research Center. . . .

If we want to reverse this, we have to make deliberate, systemic choices, like universal health care, which would end the tie between jobs and health insurance. Countries with universal systems spend 30–50% less per person than we do and get better outcomes. This reduces the economic insecurity that forces workers to cling to bad jobs for the sake of benefits.

We could also implement universal and subsidized child care. Affordable child care would free millions, especially women, to fully participate in the workforce. Quebec’s subsidized child care modelincreased female labor force participation and paid for itself in new tax revenues from mothers joining the workforce. . . .

For decades, we’ve been told that prosperity trickles down. But it hasn’t, it’s been sucked upward. While the top 1% have thrived, everyone else has been told to work harder, retrain, move somewhere with better opportunities, and wait their turn.

An economy that works for everyone isn’t a fantasy; it’s a choice. We’ve just been making the wrong one. These policies aren’t radical; they’re a return to the basic American deal: If you work hard, you should share fairly in the prosperity you help create.