Throughout the Second Gilded age, this term defines the wealth distribution of modern day and comparing it to the decades before 1928, originating in the United States history. Economist Robert Reich believes there is a connection between the increasing wealth of the top 1% and the decreasing wealth and status of the workers. Although the U.S. economy managed to recover from the decline of the wealthiest citizens, Robert Reich suggests that the declining pattern throughout the economy points to the notion that the U.S. has entered the “Second Gilded Age” shown through the example of the suspension bridge, lowering wages and productivity, unstable average income and savings, social mobility, and comparing mobility to the U.S. and other developed countries.
According to Robert Reich, he assumes that the two peaks of income concentration of the top 1% represents the two towers of a suspension bridge. This pattern of the wealth fluctuation from the year 1928 to 2007, demonstrates the drastic decline of the income from affluent Americans during the Great Depression and the Great Recession. Therefore, Reich argues that it is so intended in the duty of a few people, the middle class weakens, leading to the economic collapse. Since the middle class would deprive of the income to purchase, the overall economy pays the price. As a result, the government must maintain it with tax and growth policies, and wage regulation that the severe concentration of wealth does not occur. The “Share of Income of the Top 1% of Americans” represents Rober Reich’s belief as the foundation of the economy. This graph reveals the gradual inequality within the pay of Americans between the wealthy and the poor. Moreover, the graph exposes the plummeting social mobility that the potential for children born into the 10% of income to reach the top 10% income families was very slim.
Reinforcing Reich’s conclusion, the graph “Wages and Productivity, 1947 - 2009” supports the repetitive pattern of inequality within the pay for Americans. The graph of Wages and Productivity demonstrates the diversion of wages and productivity from 1947 through 2009. Around 1947 to 1979, the graph shows a 119% increase in productivity and 72% increase in wages. As a result, after the Great Depression, the utilization of productivity does not match up with the amount that they are getting paid. For over 32 years, the particular workers remained still, which meant that the Americans were productively working more than the profit that they earned from it. The potential for significant development in the pay for the economy would have been altered, however the policy choices decided on account of the individuals with the power and status of a wealthy income, feeding the balance of inequality. Due to the increasing inequality, it prevented the possibility of pay growth into a reality for the majority of the working class, which results in wage stagnation (Productive Pay Website). However from 1979 to 2009, the top one percent had paid their share of pretax income. The slight glimpse of hope in a period of an economic depression, Robert Reich warns the citizens to be aware of the possibility that this same circumstance can occur as a reality. This recurring event is very subtle, however Reich has already predicted that the economy is gradually showing the symptoms that the U.S. has entered the Second Gilded Age.
Surrounding Robert Reich’s vision of the Second Gilded Age, the “10 Charts on Average Income and Savings” expose the trends of the gradual variation by the decade. The 10 charts share the common inclination that the rich would be receiving the benefits since they are at the top 10% that invested in the markets, supporting the economy.
