'We were shocked': RAND study uncovers massive income shift to the top 1%
The median worker should be making as much as $102,000 annually—if some $2.5 trillion wasn’t being “reverse distributed” every year away from the working class.
Just how far has the working class been left behind by the winner-take-all economy? A new analysis by the RAND Corporation examines what rising inequality has cost Americans in lost income—and the results are stunning.
A full-time worker whose taxable income is at the median—with half the population making more and half making less—now pulls in about $50,000 a year. Yet had the fruits of the nation’s economic output been shared over the past 45 years as broadly as they were from the end of World War II until the early 1970s, that worker would instead be making $92,000 to $102,000. (The exact figures vary slightly depending on how inflation is calculated.)
The findings, which land amid a global pandemic, help to illuminate the paradoxes of an economy in which so-called essential workers are struggling to make ends meet while the rich keep getting richer.
“We were shocked by the numbers,” says Nick Hanauer, a venture capitalist who came up with the idea for the research along with David Rolf, founder of Local 775 of the Service Employees International Union and president of the Fair Work Center in Seattle. “It explains almost everything. It explains why people are so pissed off. It explains why they are so economically precarious.”