What happened to antitrust
Over the same period of time, antitrust enforcement has gone into remission. The US government has essentially given a green light to companies seeking to gain monopoly power over digital platforms and networks (Google, Apple, Amazon, Facebook); wanting to merge into giant oligopolies (pharmaceuticals, health insurers, airlines, seed producers, food processors, military contractors, Wall Street banks, internet service providers); or intent on creating local monopolies (food distributors, waste disposal companies, hospitals).
This means workers are spending more on such goods and services than they would were these markets more competitive. It's exactly as if their paychecks were cut. Concentrated economic power has also given corporations more ability to hold down wages, because workers have less choice of whom to work for. And it has let companies impose on workers provisions that further weaken their bargaining power, such as anti-poaching and mandatory arbitration agreements.
This great shift in bargaining power, from workers to corporations, has pushed a larger portion of national income into profits and a lower portion into wages than at any time since the second world war. In recent years, most of those profits have gone into higher executive pay and higher share prices rather than into new investment or worker pay. Add to this the fact that the richest 10% of Americans own about 80% of all shares of stock (the top 1% owns about 40%), and you get a broader picture of how and why inequality has widened so dramatically.
What happened to politics
Another consequence: corporations and wealthy individuals have had more money to pour into political campaigns and lobbying, while labor unions have had far less. In 1978, for example, congressional campaign contributions by labor Political Action Committees were on par with corporate PAC contributions. But since 1980, corporate PAC giving has grown at a much faster clip, and today the gulf is huge.
It is no coincidence that all three branches of the federal government, as well as most state governments, have become more "business-friendly" and less "worker-friendly" than at any time since the 1920s. As I've noted, Congress recently slashed the corporate tax rate from 35% to 21%.
Meanwhile, John Roberts' supreme court has more often sided with business interests in cases involving labor, the environment, or consumers than has any Supreme Court since the mid-1930s. Over the past year it not only ruled against public employee unions but also decided that workers cannot join together in class action suits when their employment contract calls for mandatory arbitration.
The federal minimum wage has not been increased since 2009, and is now about where it was in 1950 when adjusted for inflation. Trump's labor department is busily repealing many rules and regulations designed to protect workers.
The combination of high corporate profits and growing corporate political power has created a vicious cycle: higher profits have generated more political influence, which has altered the rules of the game through legislative, congressional, and judicial action -- enabling corporations to extract even more profit. The biggest losers, from whom most profits have been extracted, have been average workers.
America's shift from farm to factory was accompanied by decades of bloody labor conflict.The shift from factory to office and other sedentary jobs created other social upheaval.
The more recent shift in bargaining power from workers to large corporations -- and consequentially, the dramatic widening of inequalities of income, wealth, and political power -- has had a more unfortunate and, I fear, more lasting consequence: an angry working class vulnerable to demagogues peddling authoritarianism, racism, and xenophobia.
[This article originally appeared in the July 29, 2018 edition of The Guardian, under the title "Almost 80 Percent of Americans Live From Paycheck to Paycheck. Here's Why."]
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