According to UC-Berkeley Professor Emmanuel Saez, the disparity of income in the US today has never been greater than at any time in the last century. Corrado Gini, the Italian economist ranks the gap between rich and poor in the U.S. closer to that of developing countries than our trading partners of Canada, Europe, and Japan.

Why is this so important for us to think about?

Why did the economy collapse in 2008 into the greatest economic calamity in our nation’s history except for what we know as the Great Depression of the 1930’s? And what will be the effect of this calamity for years to come? 

A common thread in this economic decline is that US workers’ wages have been in decline since 1973! Tens of millions of good jobs have been lost to global competition and technology, with no national strategy to replace them! As workers flocked into the workforce in this period, real wages have not increased while prices have. How have people maintained their standards of living?

They borrowed. And the banks were more than happy to accommodate.

A nation built on bubbles

As manufacturing declined, investors created bubbles: first the dot.com bubble; then the housing bubble.

Bubbles burst.

This last one was a bubble floated on debt, debt that was actually turned into assets through banks’ highly speculative investment instruments.

We know what happened. Debts could not be repaid by workers whose incomes required borrowing just to make ends meet. The entire financial sector collapsed taking individuals’ savings and jobs with it.

We must not blame the victims, who are the majority of hard-working people who go to work every day without getting a raise. And they have been going to work with no raise for more than a generation.

People need to be informed about what has happened. That’s why we tell our story in the Case for Change video and elsewhere.

People and organizations are challenged by a lack of ability to afford the things they need, including health care. People didn’t go down a path of borrowing because they were crazy. They were, and still are, just trying to make ends meet.

This is the tragedy.

What happened to the American dream?

Emeritus Economics Professor Richard Wolff of UMASS-Amherst explains that in no country in the world did incomes climb for as long as they did in the U.S. From 1820-1973, workers’ wages rose. The notion that each generation would do better than the generation before became part of the American culture. We call it the American Dream.

Yet since 1973, the US has faced its most challenging period in history--and we have not done well. 

The impact on our friends, family, and neighbors has been devastating. People have a hard time explaining, and are naturally embarrassed about debt, falling wages, and the fear of personal financial catastrophe. They feel responsible somehow for not passing the American Dream on to the next generation.

We must help everyone know what really happened…that wages in the US have been falling, people have been working harder (20% more hours than a generation ago), and borrowing has became a necessity, not a luxury.

Our work in our unions and in our partnership is, among other things, to inform and create the environment for learning about the world we live in. Our partnership was created to help us navigate through the challenges of the economy and emerge with our mission and our standard of living safe and secure.

Income disparity is a big part of the story that we must continue to learn and share. Health care costs rise.  Incomes fall. Our mission is to deliver high quality, affordable care.

We are.