The economic growth of the past four decades has not been adequately advantageous for middle-class workers. Our analyses reveal that the typical worker has suffered a 43% decrease in growth compared to productivity increase. This stark reality illustrates that the middle-class worker missed out on a potential annual percentage point in compensation growth over the last 40 years due to a decline in the overall income labor share and escalating inequality.
The bulk of the gains from economic growth has been largely absorbed by the top 10%, specifically the top 1%, and even more acutely, the top 0.1%, creating a significant gap in income distribution. As incomes stall, the cost of living has risen remarkably. For instance, while the average household income in the U.S. has only seen a 16% increase in the last 50 years, housing costs have surged by 190%, and college tuition fees skyrocketed by nearly 264% in the same period.
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