It Wasn’t Always This Way: America’s 99 Percent Used To Have A Much Greater Share Of The Nation’s Riches
"It Wasn’t Always This Way: America’s 99 Percent Used To Have A Much Greater Share Of The Nation’s Riches"
The common retort to this by the defenders of the economic status quo is that these disparities are a natural result of capitalism, and that those who complain about them are fundamentally against markets. Indeed, when the protests on Wall Street began, much of the media instantly referred to demonstrators as “anti-capitalist.”
But the truth is that the American economy wasn’t always structured in a way that so generously rewarded the one percent while giving the 99 percent less and less. Following the Second World War, widespread unionization, higher and fairer tax rates on the wealthiest Americans, and New Deal policies helped craft an economy with widespread prosperity. In fact, if you look at income growth in period between 1947 and 1949, it was approximately equal across the board. Meanwhile, income gains between 1980 and 2007 went overwhelmingly to the richest Americans. The following chart, assembled by Connect The Dots USA using data from the Congressional Budget Office and United for a Fair Economy, demonstrates this:
A great deal of this decline of the middle class can be explained by the decline of unionization. As CAP’s David Madland and Nick Bunker demonstrate in the following graph, the middle class’s share of national income sharply declined along with union membership from 1967 to 2007 as the 1 percent’s income skyrocketed:
As the 99 Percent Movement continues to battle for the nation’s middle class, it is important for it to remind those it seeks to persuade that they aren’t protesting for something that has never existed. America’s middle class once held a much larger share of the national income, and was the envy of the world. There is no reason why progressive policies cannot create such a middle class again. It is not, as Margaret Thatcher once said, that “there is no alternative.”