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> Your bullet points these may well be immediate causes, but if you say something like 'real wages decreasing' well then you need to ask, what's the cause of th

> Your bullet points these may well be immediate causes, but if you say something like 'real wages decreasing' well then you need to ask, what's the cause of that? And what's the cause of whatever caused that? The root cause isn't a known thing to my knowledge. Robert Putnam (Harvard prof who has advised several presidents) has been looking at this for a while now. I had the privilege of hearing him talk about it a couple of years back. His objective is to identify the mechanisms through which economic inequality interacts with things like social cohesion, examining hundreds of indicators over the past century and further, such as the frequency of bipartisan bills, the incidence of social club membership, unions, incidence of interracial relationships, etc. I recall a few notable points; Firstly social cohesion had a low around the turn of the century (1900) and peaked around the mid 1960s and is currently dropping. Secondly, economic inequality indicators follow the same pattern, but trail social cohesion indicators by 5-10 years if I remember correctly. Thirdly, the effect is noticable in the US (and to a lesser extent the UK) but varies a lot internationally. (I don't have links, this was all verbal. He said he was considering putting it in a book, which to my knowledge is not yet published)

cameldrv 9y ago
OK, but how does lack of social cohesion cause a drop in real wages? There are a few mechanisms I can think of, and probably multiple are operating, but one way is that an atomized electorate does not have the ability to resist changes in the law that are detrimental to their broad interests. Thus, you get massive pro-corporate/shareholder legal changes that create increased competition for labor. What's changed is that when a businessman needs some work done, the first thing he is going to look at is if the job can be automated. The second is that he'll look for lower cost offshore labor, made possible by cheap shipping and telecommunications, but also free trade agreements. The third is that he'll look to hire a legal or illegal immigrant who will take a lower wage. The fourth is that he'll look to move from a northern state to a southern right to work state, made possible by Taft-Hartley and its successors, and pliable Southern legislatures, where he can hire non-union labor who will take a lower wage. With so much new competition for labor, much of it government created, it's not surprising that economic growth is not flowing to labor.
AnimalMuppet 9y ago
Interesting. That sounds like what helped income inequality was recognizing that other person as one of "us", whom you could not treat as just someone to exploit as severely as possible.

cameldrv 9y ago

OK, but how does lack of social cohesion cause a drop in real wages? There are a few mechanisms I can think of, and probably multiple are operating, but one way is that an atomized electorate does not have the ability to resist changes in the law that are detrimental to their broad interests. Thus, you get massive pro-corporate/shareholder legal changes that create increased competition for labor. What's changed is that when a businessman needs some work done, the first thing he is going to look at is if the job can be automated. The second is that he'll look for lower cost offshore labor, made possible by cheap shipping and telecommunications, but also free trade agreements. The third is that he'll look to hire a legal or illegal immigrant who will take a lower wage. The fourth is that he'll look to move from a northern state to a southern right to work state, made possible by Taft-Hartley and its successors, and pliable Southern legislatures, where he can hire non-union labor who will take a lower wage. With so much new competition for labor, much of it government created, it's not surprising that economic growth is not flowing to labor.

AnimalMuppet 9y ago

Interesting. That sounds like what helped income inequality was recognizing that other person as one of "us", whom you could not treat as just someone to exploit as severely as possible.