The Inequality Era

In the mid-1960s, the American Dream was as easy to achieve as it ever was or as been since, with good union jobs, subsidized home ownership, strong financial protections, a high minimum wage, and a high tax rate that funded American research, infrastructure, and education. But in the following decades, rapid changes to tax, labor, and trade laws meant that an economy that used to look like a football, fatter in the middle, was shaped like a bow tie by my own eighteenth birthday, with a narrow middle class and bulging ends of high- and low-income households.

This is the Inequality Era. Even in the supposedly good economic times before the COVID-19 pandemic that began in 2020, 40 percent of adults were not paid enough to reliably meet their needs for housing, food, healthcare, and utilities. Only about two out of three workers had jobs with basic benefits: health insurance, a retirement account (even one they had to fund themselves), or paid time off for illness or caregiving. Upward mobility, the very essence of the American idea, has become stagnant, and many of our global competitors are now performing far better on what we have long considered to be the American Dream. On the other end, money is still being made: the 350 biggest corporations pay their CEOs 278 times what they pay their average workers, up from a 58-to-1 ratio in 1989, and nearly two dozen companies have CEO-to-worker pay gaps of over 1,000 to 1. The richest 1 percent own as much wealth as the entire middle class.

From ”The Sum of Us: What Racism Costs Everyone And How We Can Prosper Together” by Heather McGhee