The incomes of the poorest fifth and the middle fifth of Minnesota families have grown about half as much as the wealthiest fifth since the early 1980s, according to a recent study by the Minnesota Budget Project, a branch of the Minnesota Council on Nonprofits. The average incomes of the poorest fifth grew 47%, or $7,171, since the early 1980s, after adjustments for inflation. For the middle fifth, the rise was 49%, or an inflation-adjusted $18,847. Compare that to the 85% bump enjoyed by the richest fifth, amounting to an inflation-factored $60,449.
One reason for this disparity is the recent emphasis on business profits over labor wages in apportioning corporate income. According to the MBP study, an average of 21% of corporate income growth went to corporate profits, versus 79% to compensate workers, over the past eight business cycles. But in the current business cycle, 85% of the income growth has gone to corporate profits and just 15% to workers.
We frequently hear that unionized workers and Northwest Airlines and Ford must take a hit when a corporation is beseiged in red ink. The MBP study, which uses the latest census data to draw its conclusions, demonstrates that when times are flush for corporations, Minnesota workers are not adequately sharing the rewards.
Wage inequality increased during the 1980s, with low-wage workers actually earning less at the end of the decade than they did at the beginning, once inflation was factored in, according to the MBP study. During the 1990s, wages rose across across the economic spectrum, but thus far in the 2000s, the inequality has returned.
Wages alone do not tell the entire story. In 2003, only 15% of the nation's private sector workers earning less than $15 an hour had access to employer-provided retirement benefits such as traditional pension plans and 401K programs, and just 51 percent had access to health care benefits. By contrast, 76% of the workers making over $15 an hour had access to retirement benefits and 74% had access to health care.
And here's my editorial coda: When these sorts of disparities are revealed, some wealthy doofus invariably shouts "class warfare." This kind of braying goes beyond irony, and become Orwellian moments with a particularly nasty twist.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss City Pages' biggest stories.