Trickle-Down Economics, And The State Of The Unions

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On this first Labor Day under the Trump regime, workers could be forgiven for firing up their holiday barbecues without much gusto.

Sure, unemployment is low. But that fact masks unpleasant realities. The percentage of employed workers 25 to 54 years old hovers below the level we saw on the eve of the Great Recession. For many Americans, real wages haven’t budged significantly for decades.

Meanwhile, our president’s promised infrastructure jobs bonanza remains missing in action. Instead, he and Congressional Republicans fixate on tax cuts for the rich —disproven as a foolproof way to help the lunch-bucket set — and on slashing social spending. Thoughtfully reforming anti-poverty programs is one thing; gutting them is another and will hurt down-and-out Americans.

So this upcoming holiday celebrating labor focuses the mind on how we actually might help labor. That starts with reviving unions, the decline of which turns out to be even more responsible for our inequality than you think.

Union membership has tanked from a third of the workforce in the 1960s to just 7 percent today, a long-recognized factor behind inequality. But progressives also argue that steady inequality has marched hand-in-hand with the nation’s supposedly steady embrace of trickle-down economics — tax and spending cuts along the lines Trump wants — since Ronald Reagan lived at 1600 Pennsylvania Avenue.

Blocking Trump’s economic agenda is surely important. Yet liberal economist Paul Krugman argues that Reaganomics’ sway has been overstated: While inequality has been constant for decades, a let-them-eat-cake policy for the poor has not.

Krugman graphed the average tax rate on the wealthiest 1 percent since the Gipper was president. While Reagan and George W. Bush did indeed cut those taxes, Bill Clinton and Barack Obama raised them, so that near the end of Clinton’s term, and again today, they stood and stand at…

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