Robert Reich: “When Economic Gains Go To The Top, The Overall Economy Stalls”

This is from Robert Reich’s Twitter stream:

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Here’s Reich’s entire text:

RobertReich5Even the Wall Street Journal is starting to temper its supply-side nonsense and recognize that America’s anemic wage growth (adjusted for inflation, household income continues to drop) is holding back the entire economy. (Anemic Wage Growth Restraining Economy, WSJ, 29 April 2016)

Next time you’re talking with a conservative, mention these 7 economic fundamentals:

  1. Workers are consumers.
  2. Consumer spending accounts for 70 percent of all economic activity in the United States.
  3. Higher income people spend a much smaller portion of their incomes than lower-income people.
  4. So when most of the economic gains go to the top, the overall economy stalls.
  5. In order to have sufficient demand for goods and services, a larger share of total income has to go to the middle class and the poor.
  6. Which requires a higher minimum wage, a bigger Earned Income Tax Credit, lower taxes on the middle and the poor financed by higher taxes on the wealthy, and stronger unions capable of negotiating higher wages.
  7. This isn’t a zero-sum game. The wealthy would do better with a smaller share of a rapidly-growing economy than their current large share of an economy that’s barely growing at all.

If workers are spending less because of stagnant wages, who is buying all the premium-priced organic food?

Related:
Marion Nestle, Michael Pollan, Alice Waters, Dr. Weil, Michelle Obama … They Just Don’t Get It
Wages Have Been Stagnant For 40 Years But It’s Not The Fault Of American Workers

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