Blog

Income Inequality and Union Decline: Connect the Dots

March 18, 2011

Income inequality in America has reached a fever pitch: The richest 1 percent in this country takes home almost 24 percent of income, up from nearly 9 percent in 1976. The poorest 90 percent makes an average of $31,244 a year, while the top 1 percent makes over $1.1 million.

Meanwhile, right-wing politicians like Wisconsin Gov. Scott Walker (R) and Ohio Gov. John Kasich (R) insist that to avert financial collapse we need to dismantle unions and slash public service workers' salaries, benefits and pensions.

These ideologues fail to see how this is a recipe for disaster. As researchers with the Center for American Progress have shown, the precipitous fall in unionization rates during the last 40 years is directly related to the smaller share of the nation’s income that goes to the middle class.

In other words, undermining unions helps increase income inequality.

While the wealthiest in the country have seen their income go up during this same period, the vast majority of workers have watched it decline. This is not a coincidence and the effects of these trends on our country are devastating.

As Kevin Drum explains in the latest issue of Mother Jones, if unions had remained strong:

“…middle-class wages over the past three decades likely would have grown at about the same rate as the overall economy.”

Since they didn’t:

“The entire bottom 80 percent now loses a collective $743 billion each year, thanks to the cumulative effect of slow wage growth. Conversely, the top 1 percent gains $673 billion. That's a pretty close match. Basically, the money gained by the top 1 percent seems to have come almost entirely from the bottom 80 percent.”

This is how a country with rising income inequality and declining unionization looks in numbers:

Income inequality

Next: It’s Not Only a War Against Unions, But a War Against Women
Previous: Judge Temporarily Halts Rights-Stripping Wisconsin Law