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Inequality, Mobility, Real Earnings, and Real Anger

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Understanding the anger among the electorate right now requires an examination of the relevant economic trends. Inequality has increased and real wage growth has been limited for the median worker, as the relationship between productivity and wages has broken down. Measures of wealth inequality have outstripped those for incomes. Higher levels of inequality are correlated with less upward mobility over the life span, have potential costly macro-growth impacts, and contribute to “sticky” poverty rates which hurt child outcomes. Even in recent decades, though, periods of full employment have seen advances in real earnings. Thus, to reconnect growth and more broadly shared prosperity we need full employment, better-targeted manufacturing policy, a strengthened safety net, a higher minimum wage, access to quality preschool, and reduced mobility barriers.

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Prepared from remarks delivered at the session, “Policy Options to Address Slow Income Growth and Improve Income Mobility” at the National Association for Business Economics Economic Policy Conference, March 7, 2016.

*Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Bernstein’s areas of expertise include federal and state economic and fiscal policies, income inequality and mobility, trends in employment and earnings, international comparisons, and the analysis of financial and housing markets. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute in Washington, D.C. Between 1995 and 1996, he held the post of deputy chief economist at the U.S. Department of Labor. He is the author and coauthor of numerous books for both popular and academic audiences, including “Getting Back to Full Employment: A Better Bargain for Working People,” “Crunch: Why Do I Feel So Squeezed?,” nine editions of “The State of Working America,” and his latest book “The Reconnection Agenda: Reuniting Growth and Prosperity.” Bernstein has published extensively in various venues, including The New York Times, Washington Post, and the Financial Times. He is an on-air commentator for the cable stations CNBC and MSNBC, contributes to The New York Times and The Washington Post’s PostEverything blog, and hosts Bernstein holds a Ph.D. in Social Welfare from Columbia University.

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Bernstein, J. Inequality, Mobility, Real Earnings, and Real Anger. Bus Econ 51, 90–96 (2016).

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