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A Decade of Flat Wages
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A Decade of Flat Wages

The Key Barrier to Shared Prosperity and a Rising Middle Class

Lawrence Mishel and Heidi Shierholz
EPI, 2013
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Editorial Rating

8

Qualities

  • Comprehensive
  • Analytical
  • Scientific

Recommendation

How can the United States get its economy out of the doldrums? After a brief expansionary period with “cash for clunkers” schemes and other wheezes at the start of the financial crisis, the focus has remained firmly on monetary solutions. Economists Lawrence Mishel and Heidi Shierholz make a case for returning to an earlier approach to economic policy. They emphasize jobs, workers’ bargaining rights and wage rises to drive economic growth, with a particular focus on boosting the beleaguered middle class. While heavy on statistics, their paper is highly accessible, and getAbstract recommends their analysis of the US’s stagnant wage market to anyone looking for alternative views on how to spur economic growth.

Take-Aways

  • The past three decades have seen huge advances in American economic productivity but minimal or even stalled wage growth for most US workers.
  • An economy that does not allow its people, across all social strata, to enjoy an equitable stake in the wealth they produce will be unsustainable, as it will have to depend on “asset bubbles and escalating household debt” to grow.
  • Irrespective of occupation, race, gender or education, wage growth has generally underperformed productivity growth. By 2012, workers with bachelor’s degrees were earning less than they did in 2002.

About the Authors

Lawrence Mishel is president of the Economic Policy Institute, where Heidi Shierholz is an economist.

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