President Obama inherited an economy in virtual meltdown, with job losses at over 20,000 per day the month he was inaugurated. But the problems ran much deeper than a typical run-of-the-mill recession. Long before the Great Recession of 2007-2009, the old rules of the game—where if you work hard and play by the rules, you can earn a decent life—had begun to fall by the wayside.
The economic recovery of the 2000s—from the peak in 2000 to near the end of 2007—middle America didn’t benefit from the economy’s growth. Over that time period, the economy grew by nearly 18 percent, as measured by gross domestic product, yet median household income fell by 0.6 percent. Further, over the past few decades, with the exception of the full employment years of the late 1990s, the U.S. economy became increasingly unequal. The incomes of the families at the top grew by an average of 1.2 percent per year between 1979 and 2009, while those at the bottom saw incomes fall by 0.4 percent per year.
The conservative narrative is that rising inequality is just fine for America because the gains for those at the top will eventually trickle down to middle America. But that’s not what’s happened over the past few decades. In fact, just the reverse occurred.
An economy top heavy with wealth is not good for our country or our economy. Inequality isn’t just bad for the 99 percent who’ve been left behind; it is actually responsible for some of the biggest problems facing Americans today—high home foreclosures, high unemployment, and an inability to get ahead. It’s critical that we reverse it.
For more on this topic, please see:
- Economic Inequality Is Not Sustainable by Heather Boushey