At this point, protest is the message: income inequality is
grinding down that middle class, increasing the ranks of the
poor, and threatening to create a permanent underclass of
able, willing but jobless people. On one level, the
protesters, most of them young, are giving voice to a
generation of lost opportunity.
The jobless rate for college graduates under age 25 has
averaged 9.6 percent over the past year; for young high
school graduates, the average is 21.6 percent. Those figures
do not reflect graduates who are working but in low-paying
jobs that do not even require diplomas. Such poor prospects
in the early years of a career portend a lifetime of
diminished prospects and lower earnings — the very
definition of downward mobility.
The protests, though, are more than a youth uprising. The
protesters’ own problems are only one illustration of the
ways in which the economy is not working for most Americans.
They are exactly right when they say that the financial
sector, with regulators and elected officials in collusion,
inflated and profited from a credit bubble that burst,
costing millions of Americans their jobs, incomes, savings
and home equity. As the bad times have endured, Americans
have also lost their belief in redress and recovery.
The initial outrage has been compounded by bailouts and by
elected officials’ hunger for campaign cash from Wall
Street, a toxic combination that has reaffirmed the economic
and political power of banks and bankers, while ordinary
Americans suffer.
Extreme inequality is the hallmark of a dysfunctional
economy, dominated by a financial sector that is driven as
much by speculation, gouging and government backing as by
productive investment.
When the protesters say they represent 99 percent of
Americans, they are referring to the concentration of income
in today’s deeply unequal society. Before the recession, the
share of income held by those in the top 1 percent of
households was 23.5 percent, the highest since 1928 and more
than double the 10 percent level of the late 1970s.
That share declined slightly as financial markets tanked in
2008, and updated data is not yet available, but inequality
has almost certainly resurged. In the last few years, for
instance, corporate profits (which flow largely to the
wealthy) have reached their highest level as a share of the
economy since 1950, while worker pay as a share of the
economy is at its lowest point since the mid-1950s.
Income gains at the top would not be as worrisome as they
are if the middle class and the poor were also gaining. But
working-age households saw their real income decline in the
first decade of this century. The recession and its
aftermath have only accelerated the decline.
Research shows that such extreme inequality correlates to a
host of ills, including lower
levels of educational attainment, poorer health and less public
investment. It also skews political power, because
policy almost invariably reflects the views of upper-income
Americans versus those of lower-income Americans.
No wonder then that Occupy Wall Street has become a magnet
for discontent. There are plenty of policy goals to address
the grievances of the protesters — including lasting
foreclosure relief, a financial transactions tax, greater
legal protection for workers’ rights, and more progressive
taxation. The country needs a shift in the emphasis of
public policy from protecting the banks to fostering full
employment, including public spending for job creation and
development of a strong, long-term strategy to increase
domestic manufacturing.
It is not the job of the protesters to draft legislation.
That’s the job of the nation’s leaders, and if they had been
doing it all along there might not be a need for these
marches and rallies. Because they have not, the public
airing of grievances is a legitimate and important end in
itself. It is also the first line of defense against a
return to the Wall Street ways that plunged the nation into
an economic crisis from which it has yet to emerge.
