You're more productive than your parents were at your age. Since 1979, worker productivity in the United States has increased by nearly 62 percent. The research is clear on this. The economy produces dramatically more per worker than it did a generation ago.

Your paycheck doesn't reflect that. Over the same period, wages grew by about 17.5 percent, against a 62 percent rise in productivity. The gap between those two numbers is where a generation of wealth went, and it was redirected rather than distributed.

Where the Money Actually Went

Corporate profits have hit record highs in recent years. S&P 500 companies collectively earned over $1.8 trillion in profits in 2023. At the same time, corporations spent more than $800 billion buying back their own stock in a single year, a mechanism that boosts share prices and enriches shareholders without creating a single job or raising a single wage.

CEO compensation tells a similar story. In the 1960s, the average CEO earned about 20 times what their median employee made. Today that ratio sits above 300 to 1 at many large corporations. The work of ordinary employees generates the revenue. The people at the top capture an outsized share of what that work produces.

This redistribution didn't happen because of market forces beyond anyone's control. It happened because of specific decisions, made by specific people, that were legal because lobbyists spent decades making them legal.

The Mechanisms That Kept Wages Down

Stock buybacks were illegal as a form of market manipulation until 1982, when the Securities and Exchange Commission, under pressure from corporate interests, changed the rules. Once companies could legally spend profits on boosting their own share price, the incentive to raise wages or invest in workers dropped sharply. Shareholders captured the gains.

Union membership tells a parallel story. In the 1950s, about 35 percent of private sector workers were union members. Today that number sits around 6 percent. That collapse didn't happen because workers stopped wanting unions. Employers spent heavily to prevent them. According to research tracking these expenditures, American companies now spend over $300 million every year on union-busting consultants, lawyers, and campaigns. Amazon alone spent $14 million on these efforts in 2022.

Unions are the mechanism through which workers historically bargained for their share of productivity gains. When union membership was high, wages tracked productivity reasonably well. As union membership fell, the connection broke.

The minimum wage is another data point. In 1968, the federal minimum wage, adjusted for inflation, was worth more than it is today. More than 55 years of inflation have eroded its purchasing power while Congress has repeatedly declined to raise it, in part because the restaurant industry, retail lobby, and other low-wage employer groups spend heavily on the campaigns of members who would vote against an increase.

What This Means for Ordinary People

Nearly 60 percent of Americans report living paycheck to paycheck. That figure spans income levels that most people would consider comfortable. Wage growth has been weak across most of the income distribution while the cost of housing, healthcare, childcare, and education has outpaced inflation for decades, and the squeeze shows up at every income level, not just the bottom.

A family where both adults work full time can still be one medical bill or one car repair away from a financial crisis. The predictable result of wages disconnected from productivity while essential costs kept climbing is exactly this kind of precarity, and it falls on people who have done everything right.

Meanwhile, the wealthiest Americans have seen their net worth grow dramatically. The top 1 percent of households now control a larger share of national wealth than at any point since the 1920s. Inequality in the United States is at its highest level since the Gilded Age, the era of robber barons and company towns that the labor movement spent decades fighting to dismantle.

Who Made These Choices

The gap between productivity and wages was produced by policy. Tax law changes that favored capital gains over wages. Deregulation that made stock buybacks legal. Trade agreements that gave corporations the ability to shift production to lower-wage countries without penalty. Sustained political opposition to raising the minimum wage and strengthening labor law.

These weren't accidents or inevitable outcomes of global economics. They were choices, made in legislation and in regulatory agencies, by politicians who received significant funding from the industries that benefited from those choices.

Both parties share responsibility for where things stand. Democrats embraced Wall Street and Silicon Valley donors through the 1990s and 2000s while the labor movement's political clout declined. Republicans built an economic agenda around cutting taxes at the top and blocking wage increases at the bottom. The result, across decades of both parties holding power, is the largest gap between productivity and wages in modern American history.

Why This Is a Political Problem

The wages-and-profits gap is economic and political at once, because the same corporations that captured most of the gains from rising productivity also spent some of those gains on lobbying to keep the system exactly as it is.

When pharmaceutical companies earn record profits while Americans ration insulin, they're also funding the campaigns of legislators who vote against drug price controls. When Amazon spends $14 million fighting union organizing, it's spending money that came from the same workers whose wages it's holding down. The economic and the political are the same story.

The Labor Party exists because changing the economic outcomes requires changing the political system that produces them. A party that takes zero corporate donations answers to different people than the ones who have been setting the rules.

Learn more at votelabor.org.