Vol. 295 , Issue 5/6, Pages 27-32
July 30, 2012
Between 1947 and 1970, every income group in America experienced economic advancement. As James K. Galbraith reminds us in Created Unequal, the 1950s and ’60s were unique because government policies—social as well as economic—provided a firm foundation for the gains experienced by families across the board. Lower-wage workers benefited from a wide range of protections, including steady increases in the minimum wage, and the government made full employment a high priority. There was also a strong union movement that ensured higher wages and more nonwage benefits for ordinary workers. But by the ’80s, the trends for lower-wage workers had been reversed. Families in the higher income groups—the top 20 percent—continued to enjoy steady income gains, adjusted for inflation, while families in the lower income brackets experienced stagnating or declining incomes. The labor movement began its downward spiral; macroeconomic policy was no longer geared to tight labor markets; and monetary policy, focused on lowering inflation above all else, became dominant. As part of the “Reagan experiment,” the tax structure became more regressive and Social Security taxes increased; also, when George W. Bush took office, tax cuts were passed that distinctly favored the wealthy at the expense of ordinary families. Finally, Congressional resistance to raising the minimum wage further threatened the economic security of disadvantaged families.
Wilson, William Julius. "The Great Disparity." Reviews of The Great Divergence, by Timothy Noah, and Coming Apart, by Charles Murray. Nation, 295.5/6, July 30, 2012: 27-32.