A "failure" for the bottom 95% of wage earners, not a "failure" for those in the top 0.01% income bracket with capital gains earnings.
The Republican's one and only argument for increasing wages is to increase growth while cutting taxes — and claim that more growth would best resolve the matter of wealth redistribution and income and wealthy inequality. For decades this has been known as "trickle-down economics" and "starving the beast" — when a rising tide was supposed to lift all boats, but instead, has only lifted the yachts. We've had these type on economic policies for the past 35 years — all while wages have remained stagnant.
And still, the Republicans want even more of the same, even though their plan has failed average workers miserably. But the Democrats (to date) haven't done much better either. Bill Clinton gave us horrible trade deals (NAFTA and PNTR with China — now showing up as "lagging indicators"). According to the Economic Policy Institute:
"More than 5 million U.S. manufacturing jobs were lost between 1997 and 2014, and most of those job losses were due to growing trade deficits with countries that have negotiated trade and investment deals with the United States."
And 5 million jobs are the number of jobs directly lost to trade deals, and doesn't include the "multiplier effect". Since PNTR with China, the labor force participation rate has been in a long and steady decline. That is not a quinky dink. According the Bureau of Labor Statistics, 5 million jobs is also about the same number of people who are currently unemployed (but not counted in the unemployment rate) who are currently "not in the labor force, but want a job now". Another quinky dink? And Obama and the Democrats are proposing more of these horrific trade deals — such as TPP, TTIP and TiSA.
The Democrats also side with the Republicans to displace American workers with H-1B and H-2B guestworker visas. The STEM skills gap is a myth — If everyone had a Ph.D, they would not all have jobs today. Many college grads are taking jobs that don't even require a higher education, and displacing high school grads for jobs, further shrinking the middle-class.
The Democrats could have also raised the minimum wage and reformed the tax code back in 2009 and 2010 (but they didn't.)
As you can see from the charts below (from Google Finance and the
St. Louis Federal Reserve), stocks on the Dow Jones are up over 1,700% over the past 35 years — and corporate profits after taxes are up similarly. Meanwhile,
corporate taxes as a share of GDP and profits are down considerably over the last 35 years. There has already been a lot of "growth", but it hasn't "trickled down" to worker's wages.
As the Economic Policy Institute illustrates, the economy still remains far from fully recovered since the crash of the Great Recession — and overall, is still failing ordinary Americans, who have already endured decades of stagnant wages (despite working more productively than ever).
But the major corporate mainstream media doesn't want to report on this, and they also don't want the presidential candidates (in both parties) to discuss this during the debates. They want to talk about Donald Trump. And they want the American people to be totally focused on ISIS and terrorism as the nation's #1 top priority (and not the economy) as another distraction.
While the headline unemployment rate has fallen nearly to pre–Great Recession levels, other measures show much less progress. In particular, the share of 25- to 54-year-olds with a job is a crucial measure of how far from full recovery the economy truly is. From its peak before the Great Recession to its trough following the downturn, the share of 25- to 54-year-olds with a job fell 5.6 percentage points. Since then, it has clawed back less than half of this decline. It currently sits at 77.4 percent, 2.9 percentage points below its pre–Great Recession peak. Even more striking, this measure is a whopping 4.5 percentage points below the peak reached in 2000.
Anemic wage growth is nothing new. American workers have had to contend with stagnant wages for decades. From 1973 to 2014, the hourly pay (wages and benefits) of typical workers increased only 9.2 percent over 41 years (after adjusting for inflation). Over this same period, net productivity (how much workers produce per hour) rose 72.2 percent. This means that although Americans are working more productively than ever, the fruits of their labors have primarily accrued to managers and executives at the top of the pay scale and to corporate profits. In contrast, for two-and-a-half decades beginning in the late 1940s, the pay of typical workers rose in tandem with productivity.
The prosperity generated over the last four decades has failed to “trickle down” to the vast majority largely because policy choices have exacerbated inequality by allowing those with the most income, wealth, and power to capture these gains. Indeed, more than 70 percent of the pay–productivity divergence over 1973–2014 can be explained by rising inequality. This inequality takes two forms: inequality within the pay structure, and the loss in workers’ share of income (in other words, income is increasingly going toward stock owners — for example, in the form of profits being distributed as stock-option grants as compensation to CEOs — instead of toward employee compensation). And since 2000, rising inequality explains more than 85 percent of the pay–productivity divergence.
Had wage growth been equitable and strong in recent decades, today’s minimum wage would be far higher. For example, had the minimum wage kept pace with productivity gains after 1968, as it did from its enactment in 1938 to 1968, it would stand at $18.42 instead of $7.25. And had the minimum wage maintained its peak inflation-adjusted value (reached in 1968), it would be $9.54. But unfortunately, wage growth hasn’t been distributed equitably in recent decades. This is because a multitude of policy decisions [such as anti-union right-to-work laws] have sapped low- and moderate-wage workers’ power to bargain with their employers for higher pay.
Hillary Clinton suggested raising the minimum wage to $12; whereas Bernie Sanders has strongly advocated for $15 — phased in from now until 2020 (read more here). Social Security wage data shows the "median" wage as $28,200 a year. But Hillary Clinton wants us to believe that $250,000 a year is a middle-class wage, which is really in the top 1% of wage earners.
In contrast to the vast majority of workers, CEOs have enjoyed extraordinary pay growth in recent decades. The gap between CEOs and typical workers has expanded enormously over the past 50 years. In 1965 CEOs made 20.0 times as much as typical workers. This ratio rose to 29.9 in 1979 and 58.7 in 1989—and now sits at 303.4. While this is down a bit from previous peaks in 2000 and 2007, CEO pay is recovering rapidly from the Great Recession. CEOs now make so much — and set patterns of pay for other corporate managers and in other high-end labor markets (such as those in medicine and law, and in leadership positions in academia and large nonprofits) — that it is imperative that some competitive discipline be brought to CEO pay-setting. This would free up more income for the vast majority of workers whose pay has stagnated in recent decades.
But no matter what Democrat is elected to be our President next year, nothing will change with a Republican dominated Congress. But a Republican President would be much worse (because we'd just get more "reverse trickle-down economics"). What we REALLY need is someone like Bernie Sanders in the White House, but with a Congress dominated by Democratic Socialists. But we may have to wait another 35 years for that to happen — because I suspect things will have to get much worse before the people finally wake up and demand a real political revolution. We'll have to wait for the current crop of die-hard Democratic and Republican neo-cons (Republicans and "moderate" Democrats, who now hold most of the power) to retire or die off first.