What we see now in America is what happens when we fail to make generous investments in the next generation
I remember middle-class 1970s America. We were so optimistic then. And we had it so good, too. We made the best cars, TVs, and we had the best schools. The news was about bussing kids, not about school shootings. Our politics still talked about compromise. Our future was not decided by who would nominate the next justice to the Supreme Court. It seemed to me that back then, we made deep investments in the next generation.
But something happened. Proposition 13 happened. The Reagan Revolution happened. Then the GOP put out a Contract On America. We had a few good years with Bill Clinton, but the decline of America’s investment in their progeny continued. With George W. Bush, the decline accelerated. We know this because of the way the real estate market collapsed. Even Barack Obama wasn’t much better. And then Trump pulled the rug out from anyone and everyone who was not a member of the Rentier Class.
Biden? Too little, too late. We’re a nation ruled by geriatrics who refuse to let go of their power. Name a powerful politician who has been on the planet for less than 70 years. You just won’t find them. Not yet. The lopsided power of the elderly should tell us all that we need to know about our declining investments in the next generation.
This is a story about how America made a policy choice to decouple wages from productivity all across the spectrum. The stagnating wages of the last 40 years are a symptom of that policy choice. So too are the astronomical salaries and total compensation of the top brass in our largest companies. They are not even close to matching the productivity of human beings with genes that vary less than 1% from the rest of us.
Here is a chart from the Economic Policy Institute:
Notice the divergence of the trendlines starting in the 1970s. Now here is another chart showing the same pattern, only this one using 2020 dollars and comparing the minimum wage with productivity data: