Brian Beutler reports in Talking Points Memo that the liberal Economic Policy Institute is coming out soon with a new edition of their annual report, ‘The State of Working America.” A graph from the upcoming report, Beutler writes, is “a stark illustration of the fact that the vast majority of workers have been closed out of the country’s gains for nearly 40 years.”
Particularly striking is the fact that for years leading up to the 1970s, productivity gains were broadly shared, as theory predicts. Then the linkage abruptly broke. What explains the shift?
“The big shift is really in the ’80s, which I would attribute to [Fed Chairman Paul] Volcker’s recession in 1980-82, which killed workers,” said Dean Baker, co-founder of the Center for Economic and Policy Research, who has conducted similar studies. “A high dollar in the mid-80s amplified this effect. You also had the anti-union policies of the Reagan administration.”