Wage Suppression as the Prime Driver of Deepening Inequality

No, the culprit isn’t automation or skills or technology. The wage gap reflects a widening power gap. EPI’s latest report explains how it works.

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For more than three decades, our friends at the Economic Policy Institute have been waging a lonely struggle against the conventional wisdom about the causes of widening inequality. They did not have powerful allies on their side. All they had was reality.

Now, EPI’s research has been vindicated, and is increasingly accepted by mainstream economists. Wage inequality is the result of deliberate suppression of wages, which in turn is the result of a deepening power inequality.

Even better than having reality on their side, EPI economists now have a Democratic administration on their side. Several senior Biden people, including Jared Bernstein and Heather Boushey on the Council of Economic Advisers, are former EPI staffers, and EPI’s insights are at last influencing national policy.

EPI pulled together all of this research in a document called “Unequal Power.”

I recently had a Zoom conversation with former EPI president Larry Mishel, the leader of this research project, along with professors Anna Stansbury of MIT and Suresh Naidu of Columbia University, to discuss the findings. You can watch the interview below:

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