No Raise This Year? These Four Charts Explain Why

AP Photo/Mary Altaffer

A demonstrator holds a sign during a home care and health-care workers rally for $15 minimum wage, Tuesday, November 10, 2015, in New York. 

It’s hard to find a clearer illustration of escalating economic inequality than the growing divide between worker pay and worker productivity.

The Economic Policy Institute’s top charts of 2015 depict the problem in simple terms.

From the late 1940s through the 1960s, hourly compensation and productivity increased at the same rate. Beginning in the early 1970s, however, worker wages began stagnating, while productivity levels continued to climb.

Economic Policy Institute

Essentially, the charts show that all the wealth generated from higher productivity has gone to the upper echelons of the corporate ladder. CEO in the 1960s made on average 20 times more than the typical worker. A CEO today now makes more than 300 times what a worker does.

Economic Policy Institute

If that increased productivity had led to equally increasing wages—rather than exorbitant executive pay—the minimum wage today would be $18 an hour, not $7.25.

Economic Policy Institute

But, that hasn’t happened—largely thanks to the rising power of the corporate agenda in American politics, and the decreasing power of workers as a result of diminished union representation and collective bargaining rights.

In fact, economic and political policies that have exacerbated inequality in this country directly account for about 70 percent of the productivity-pay gap.

Economic Policy Institute

Suddenly, that “you make what you’re worth” notion doesn’t quite seem to make sense anymore

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