Reich highlights double economy, single recovery
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Robert Reich, the former U.S. Secretary of Labor is a frequent commentator on the economy, economic policy and how it affects American workers. In a piece following up on President Barack Obama's State of the Union address, Reich argues that America essentially now has two economies--one for corporations and one for the rest of the country--and only the first is experiencing legitimate economic recovery.

The piece can be found at the site of the New Haven Register.

Corporations are profiting from sales of their foreign operations, especially in China and India. Here, they??re selling to rich Americans ?? Christmas sales at Tiffany & Co. and Neiman Marcus were up, but sales have been down for downscale retailers.

Reduced costs ?? especially shrinking payrolls ?? have been the most important key to the rise in corporate profits, though. The result has been fewer jobs and lower pay.

The Great Recession accelerated trends that started in the 1980s ?? outsourcing abroad, automating work, converting full-time jobs to temps and contracts, undermining unions and getting wage and benefit concessions from remaining workers. The Internet and software have made all this easier.

The U.S. economy is now twice as large as it was in 1980, but the real median wage has barely budged. Most benefits of economic growth have gone to the top. In the late 1970s, the richest 1 percent of Americans got about 9 percent of total income. By the start of the Great Recession, they received more than 23 percent. Wealth is even more concentrated.

Tags: Economy