Productivity, Inequality, and a New Gilded Age

This Ted Rall cartoon of business malfeasance was written after the Enron scandal and the Dot-com market crash, but there has also been quieter profiteering before and since from lagging wages in the entire economy. When I look at the productivity and pay chart below, I see my working years from 1973 to 2015:

That gap between productivity and pay has helped fund a new gilded age with more rich people holding more wealth. The incomes below are real, meaning adjusted for inflation, and only average, meaning undisclosed higher incomes.

Another source of new wealth has been the reduction in Federal income taxes from 1962 to Trump’s 2018 tax cut, as shown by the history of the marginal, or highest, tax rate:

The combination of lagging pay and decreased taxes has lifted the top 1% more than the flattened 99%. As the 2021 Matt Wuerker cartoon below shows, not everyone benefits when the wealthy get wealthier. But they do have more disposable income to pay for gilding their lifestyles.

This points to the start of a solution to our growing problems. The world needs funding for climate change research, infrastructure, remediation, and innumerable other unknowns. We could begin with a return to the tax rates of Truman and Eisenhower from 1948 to 1962.