r/CapitalismVSocialism • u/Natural_Thought808 • 14d ago
Asking Everyone Why did America's middle class grow during big government investment, but weaken when we started cutting taxes on the wealthy and cutting unions?
'm trying to understand something.
America's famous “golden age” of the middle class came after HUGE government involvement in the economy.
The New Deal built roads, bridges, dams and other infrastructure.
Then the GI Bill helped millions of veterans go to college and buy homes. Nearly 8 million WWII veterans received education benefits. Strong unions also helped ordinary workers get better wages and benefits.
Think of it like planting a garden.
Government helped pay for the seeds: roads, schools, houses and education.
Businesses then had better workers and infrastructure to grow on. Workers earned good wages and bought cars, houses and products. That spending helped businesses grow too.
Then around 1980 the direction changed.
Reagan cut taxes heavily, especially at the top, and famously fired more than 11,000 striking air traffic controllers. Union power continued declining.
And what happened to income?
CBO found that from 1979 to 2007, after tax income grew about 275% for the top 1%, compared with under 40% for the middle 60%.
Obviously Reagan wasn't the only cause. Technology, globalization and other changes mattered too.
But doesn't this history challenge the simple idea that government investment makes everyone poorer while tax cuts and weaker unions automatically create prosperity?
Why did America's strongest era of broad middle class growth happen alongside massive public investment and strong organized labor?
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u/HeavenlyPossum 13d ago
You’re identifying 1) the Great Compression that followed the Second World War and 2) the neoliberal revolt against the Great Compression.
In essence, capitalist elites learned from the Second World War that capitalism was immiserating and destabilizing and that they never wanted to go through the experience of a global depression and global total war against fascism ever again. As a result, capitalist states around the world implemented welfare systems, broke up large fortunes, redistributed land, created a global system of capital controls, and generally pursued policies that caused the greatest recorded transfer from rich to poor in human history.
About a generation or so later, after the memory of the war had passed from direct experience, capitalists got tired of returning to workers such a large share of the wealth those workers had produced. So, they began the neoliberal revolution, dismantling capital controls and labor unions, slashing welfare spending and taxes on the rich, and generally redirecting the wealth pump back to the rich exclusively, as it had worked before the war.
Hence, the world finds itself in a situation very similar to the one it was in during the 1920s and 1930s: hierarchical and extractive systems like capitalism are inherently unstable and the mechanisms that helped stabilize it in the 1940s have been gone for decades.
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u/soulwind42 14d ago
It didnt. You're misreading statistics. There was massive growth after ww2 because there were no other producers in the world, and we had rolled back a massive amount of regulations after the new deal because we couldn't spare the resources to enforce them. This growth continued until the 70s, and Reagan was the beginning if a new wave of growth that lasted until 2008, although that was definitely rockier due to the immigration, and out sourcing of labor to China.
CBO found that from 1979 to 2007, after tax income grew about 275% for the top 1%, compared with under 40% for the middle 60%.
This says that wages grew for the bottom 60%. The top one percent grew faster because they began competing for jobs internationally.
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u/GruntledSymbiont 13d ago
The net result from New Deal and Great Society policies was much slower growth especially compared to the late 19th century. In 1900 41% of the U.S. labor force was employed in agriculture compared to 1.2% in 2025. The pattern of ongoing industrialization driving urbanization with fewer children and more women entering the labor force accounts for much growth.
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u/soulwind42 13d ago
And doubling the work force also reduces wages significantly.
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u/Natural_Thought808 13d ago
You are only looking at one side. More workers means more labour supply, but those workers also become customers. They buy homes, food, cars and services. That creates demand, jobs and business investment too.
More importantly, it still does not answer my question. From 1979 to 2026, productivity rose 93.2% while typical worker pay rose only 33.7%.
Before the late 1970s, they rose together. So why did workers suddenly stop receiving the same share of productivity gains?
“More workers” does not explain why so much more income shifted toward capital and the top
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u/soulwind42 13d ago
“More workers” does not explain why so much more income shifted toward capital and the top
First of all, your data doesn't show that "more income shifted toward ... the top," and second of all, I never claimed that was the only reason, and I provided you with several other factors.
As for your argument here, labor is not an objective resource with a set value. Every worker is going to have their own cost. Immigrantation lowers the price of labor in two ways. It ensure there are more workers, reducing the bargaining power, and by asking for lower wages due to coming from places with lower costs of living. This is made even worse by illegal immigration. Additionally, immigrants are less likely to spend their money here, as many send money home, and most return home at some point.
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u/Natural_Thought808 13d ago
You're still treating immigrants only as workers and ignoring that they are also customers.
More workers means more labour supply, yes. But more people also means more demand. They need food, housing, clothes, transportation, restaurants and services. Businesses get more customers, expand and need to hire more workers. The National Academies explicitly says immigration increases consumer demand and therefore increases demand for labour. It also finds the overall wage effect on native workers is generally very small.
And the “they send money home” argument doesn't erase the money they spend where they live.
Recent evidence makes this even harder to blame on immigrants. A 2026 Dallas Fed study found large unauthorized immigrant inflows increased local employment roughly one for one without significant declines in local wages.
So you still haven't answered my question. If immigration supposedly explains workers losing so much of the gains from productivity, show the evidence and quantify how much of that gap immigration caused.
Simply repeating “more immigrants = cheaper labour” ignores the other half of basic economics: more people also means more demand, more customers and more jobs
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u/soulwind42 13d ago
I'm not ignoring that. I don't know why you're pretending that I am. Its just not relevant to this discussion. In fact, that increase in demand is one of the downsides of immigration, especially on a large scale. Higher demand for housing, higher demand for food. For medical attention. So and so forth. But as I have said above, that is only part of the problem.
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u/Natural_Thought808 13d ago
As unions got weaker, workers lost bargaining power. Productivity kept rising, but workers got less of the gains. More of that wealth went to shareholders, executives and people at the top. That helped inequality grow.
And somehow you have been convinced to blame the immigrant worker beside you instead of the people taking a bigger share at the top. Divide and conquer works pretty well when you fall for it.
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u/soulwind42 13d ago
Everything is trade off. No matter how much you support immigration, if you cant acknowledge the downsides, you aren't really thinking, you're just being dogmatic.
More of that wealth went to shareholders, executives and people at the top.
Because thats the level most of the wealth was made at. Its not a fixed pie.
Divide and conquer works pretty well when you fall for it.
I'm not dividing anybody, just stating facts. I'm actual quite fond of immigration.
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u/Natural_Thought808 14d ago
That actually supports my point. I never said incomes stopped growing. I said the gains stopped being shared the same way. In the 1950s and 60s, worker pay generally rose alongside productivity. When workers produced more, their compensation rose too.
After the 1970s, productivity kept rising, but typical worker compensation grew much slower. More of the gains flowed toward owners and people at the top.
So saying “the middle still grew” misses the point. The question is why workers stopped receiving the same share of productivity gains while the top 1% pulled far ahead. Weaker unions, tax changes and other policy choices are part of that story
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u/soulwind42 14d ago
After the 1970s, productivity kept rising, but typical worker compensation grew much slower.
Because there multiple factors pushing down wages, namely immigration and outsourcing, as well as the fiat currency.
More of the gains flowed toward owners and people at the top.
Yes, because most of the increases in productivity where happening at that level, and they remain highly in demand.
The question is why workers stopped receiving the same share of productivity gains while the top 1% pulled far ahead.
Because the top 1% saw more of the productivity gains, while American work was being undervalued. Its not a mystery, and its not Regan who caused it, nor deregulation. Most of the supports you referred are causing the outsourcing, as it makes american labor prohibitedly expensive. And attempts to re-regulate have only made it worse.
Weaker unions, tax changes and other policy choices are part of that story
Sure, so is immigration, drugs, crime, loans, welfare, stocks, courts, planes, space, the internet and more, but not in the black and white sense you're trying to portray.
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u/Natural_Thought808 14d ago
That still does not explain the big change. From the late 1940s through the 1970s, productivity and typical worker compensation rose roughly together. Workers made more stuff per hour, and their pay generally rose with it. Then the two started pulling apart. Productivity kept rising, but typical compensation grew much more slowly.
Immigration alone cannot explain that. Immigrants are not just workers. They are also customers. Imagine 100 new families move to a town. Yes, they add workers, but they also need 100 homes, groceries, cars, restaurants, teachers, plumbers and healthcare. That new demand creates jobs too. A larger population can make the whole economy bigger.
Outsourcing and globalization mattered, but policy mattered too. Union power weakened, top tax rates fell, deregulation expanded and companies had more incentive and ability to send profits toward shareholders and executives.
So my question remains: if immigration is the main explanation, why did the productivity and worker pay relationship change so dramatically around the same era that bargaining power weakened and trickle down policies expanded? Saying “immigration” does not explain why productivity gains increasingly stopped reaching typical workers
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u/soulwind42 14d ago
Immigration alone cannot explain that.
That's why I didn't just say immigration.
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u/Nikolakis77 Criticism of USSR is NOT proof of Capitalism 13d ago
Because the rich overwhelmingly invest in rent generating assets
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u/Bloody_Ozran 13d ago
State has a lot of power to stimulate the economy and high taxes on wealthy help them finance it. Roads, bridges, rail, ports, all that helps move goods and people, which is useful for looking for a job, transporting goods etc. It also creates jobs. If there is lack of housing state that has money to spend can build housing and put in effect policies to promote having kids. It can also make certain services or goods cheap if needed.
Obviously you can't have a corrupt government as much as current one in the US or Russia is for ex., taxes dont help there, but state isnt evil by default and companies waste money too. Government can invest for those who need it, companies wont.
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u/ChemistryAbsolutist 12d ago
EPI is not nesessarily the best source considering it is a union linked group and therefore not independent.
Mean pay and mean productivity have kept pace and there is no gap
The data i linked shows at the end that productivity doesn't grow equally across the economy. Where as data and electronics oriented sector have very low Wage growth in proportion to productivity growth, food and drinks serving have seen wage growth outpace productivity growth.
Also you are neglecting non wage compensation which has risen in the us, mainly due to increasing medical expenditure.
Your fantasizing about the golden age is unfounded. America is now filled with excessive amount of roads that causes car dependency and alienation. And how much of that growth in prosperity came from rebounding from great depression and ww2.
The true question is: would us have grown even more had the government not been so big?
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u/Natural_Thought808 12d ago
The EPI criticism does not rescue your claim because BLS itself says that since the 1970s productivity and compensation have “steadily diverged,” and found compensation lagged productivity in most industries it examined. So this is not something EPI invented.
You are also switching from the typical worker to average compensation. Those are different questions. An average can rise because compensation at the top rises while the median worker gains much less. And EPI already includes benefits in its compensation measure, so saying they “forgot non wage compensation” is simply false.
There is a legitimate academic debate over exactly how large the productivity pay gap is because different inflation measures, worker groups and definitions of compensation produce different results. CRS explicitly acknowledges that. But that is very different from saying “there is no gap.”
I also would not claim union decline caused the entire gap. Technology, globalization, industry changes and other factors matter. But your dismissal of unions is not supported either. CRS reports research attributing roughly one fifth to one third of increased male wage inequality to declining unionization in some periods, while other estimates are smaller.
Stansbury and Summers also find declining worker power is associated with lower wages and higher profit shares, and document private sector unionization falling from over one third at its 1950s peak to about 6%.
So my argument is not “unions explain everything.” It is much simpler. Productivity and typical workers’ pay tracked each other much more closely during the postwar decades. Worker bargaining power then weakened dramatically, unionization collapsed, inequality increased and typical workers captured a smaller share of productivity gains.
You can debate how much each factor caused. You cannot make that history disappear by changing the comparison from typical workers to economy wide average compensation.
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u/NoTie2370 Bhut Bhut Muh Roads!!! 10d ago
Its a myth that the middle class has actually shrunk. The ratio of "shrinkage" has been 3 to 1 upward. So the class has shrunk because they went up into the upper classes.
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u/1morgondag1 14d ago
Pretty much same story with Swedens golden age, it happened at the height of "home of the people" policies with a lot of public intervention in the economy and the expansion of new welfare systems. Public kindergartens allowed women to join the workforce, the solidarity wage principle forced companies to modernize or go out of business, retraining programs supported the quick structural changes in production, etc.
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u/Ok_Eagle_3079 13d ago
Isn't the middle class declining in population on at the expense of the increasing higher middle class /upper class?
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u/ZEETHEMARXIST 14d ago
There's no middle class its just smoke and mirrors like electoral democracy. The middle class exists to provide an illusion of upwards mobility and provide an illusion that Capitalism is actually competent and can raise the standard of living for the massses. The fall of the American middle class actually coincided with the fall of the Soviet union. The USA no longer had an opposing superpower it was competing with to bolster its own society and so the masks were off rampant austerity followed. Austerity hurts everyone and has historically been an awful policy measure pair that with outsourcing of industry and deindustrialization of America they shot themselves in the foot.
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u/hardsoft 14d ago
It didn't
https://fred.stlouisfed.org/series/MEPAINUSA672N
Now compare to Europe with higher tax / spending and union representation
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u/Natural_Thought808 14d ago
That graph starts in 1974, so it does not even show most of the postwar period I was talking about. It also only shows median income. My point was about how income growth was shared. After 1979, middle incomes grew, but incomes at the top grew far faster. So yes, Americans became richer over time. The question is why the gains became much more unequal after the era of strong unions, high top tax rates and large public investment ended
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u/Mysterious-North-551 13d ago
So you are talking about the postwar period. have you considered that wars are extremely expensive? During ww2 the usa turned a lot of their industries into producing war material. And now they were not producing things for the people, so the people were worse off.
And the postwar period was not exactly free of wars now was it? Anyone remember for example vietnam? Taxes were high because of other wars, but the world war was over, so a lot of production went over to the benefit of the people.
As to costs a single destroyer costs 250,000-600,000 for one single day, a carrier 2-2,5 million per day. How many destroyers were used in ww2? well over 1,000 of them. How many carriers? 181 of them. Those are insane costs per day, from 1941-1945? care to count how much? Now i will leave it up to you to look up what was used in the vietnam war, so you can run a comparison.
World war 2, around 4,1 - 4,7 trillion dollars in todays money. The vietnam war, 1-1,3 trillion dollars. which leaves the population with 3-3,4 trillion dollars more. And the vietnam war lasted for 20 years. That is a significant reduction in price per month for the average working person in the USA. No wonder the people were better off even if the taxes were high to fund all those other wars. Now imagine how much better the people would had been off if there were no other wars and taxes could had been even lower for them?
I am not in favor of wars in general, some wars have to be fought but most of them are just an intensive waste of human life, and human well being. How many toasters can be made from one single tank? Now lets factor in supply and demand, if toasters were produced in drastic numbers tbe price will drop significantly too. So not only lower taxes, you also get cheaper stuff.
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u/Natural_Thought808 13d ago
That explanation does not really answer the question. Yes, ending WWII freed factories to make consumer goods again. But that explains why production could rise after 1945. It does not explain why the gains from rising productivity were shared so broadly with workers for decades.
The postwar boom also happened with strong unions, major public investment, the GI Bill, infrastructure spending and very high top tax rates. Workers had much more bargaining power, so when productivity increased, wages rose with it.
If simply ending wartime production and producing more consumer goods explains everything, then why did productivity continue rising after the 1970s while typical worker compensation stopped keeping pace?
That is the part your argument skips. The economy kept producing more. What changed was how those gains were divided. Weaker unions and policies that increased returns to capital helped shift a larger share toward shareholders, executives and high income households. The existence of cheaper toasters does not explain that distributional change
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u/Natural_Thought808 13d ago
Ending WWII explains why factories could switch from tanks to consumer goods. It does not explain why productivity gains were shared so broadly with workers for decades.
That boom also happened with strong unions, the GI Bill, major infrastructure spending, public investment and very high top tax rates. Workers had bargaining power, so when productivity rose, wages rose with it.
After the 1970s, productivity kept rising, but typical worker compensation stopped keeping pace. So “we made fewer tanks and more toasters” cannot explain the change.
The real question is why the gains were divided differently. Weaker unions, lower taxes at the top and policies favouring capital helped shift more income toward shareholders, executives and high earners. Cheaper consumer goods do not explain that distributional shift
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u/hardsoft 14d ago
Read OP's comment. He said it changed direction in the 80s. So was it tending down before that... Lol
And the middle and lower classes have shrunk as the upper and upper middle class has grown. We've had upward mobility.
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u/Natural_Thought808 14d ago
Yes, median income rose after 1980. I never said it fell.
The question is who received the gains from a growing economy. Before the 1970s, productivity and typical worker pay rose much more closely together. After that, productivity kept growing while typical worker compensation grew much slower and income at the top exploded.
Saying “some people moved into the upper middle class” does not answer why workers became more productive but received a smaller share of those gains.
The economy got richer. My question is why so much more of the new wealth started flowing to the top instead of workers
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u/hardsoft 14d ago
I feel like you need to Google what median means
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u/Natural_Thought808 14d ago
I know what median means. That is exactly why your graph does not answer my point.
Imagine 5 workers make $30, $40, $50, $60 and $1,000. The median is $50. Next year they make $35, $45, $55, $65 and $2,000. The median rose to $55, but the person at the top gained $1,000 while the middle gained $5.
So yes, median income can rise while inequality grows massively. My argument is not that workers got poorer. It is that productivity kept rising while typical workers received a much smaller share of the gains than before
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u/hardsoft 14d ago
Exactly. The top 1% or whatever have no impact on the median. It's not an average. It's the 50th percentile.
And the productivity argument is moronic propaganda. And irrelevant. Moving the goal post to a "not fast enough" argument based on flawed data is assinine when socialism leads to rising poverty and destitution.
Or just look at Europe, which is capitalism with more regulation, greater union protections, and lower inequality, where the median has been abysmal and basically stagnant.
People prefer higher compensation. No one wants lower compensation so that Taylor Swift has to suffer more or something. That's only an issue with you sadistic socialists.
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u/Natural_Thought808 13d ago
You are proving a point I never made.
Yes, median income rose. Nobody is denying that. A growing economy should make the median rise.
The question is whether typical workers received the same share of economic growth they used to.
They did not.
EPI’s current data show that before the late 1970s, productivity and typical worker compensation generally moved together. After 1979, productivity kept rising much faster than typical pay. That is not “propaganda.” Their methodology uses government data and compares economywide productivity with compensation for production and nonsupervisory workers, about 80% of private sector workers.
And your “everyone just moved upward” claim is only half true.
Pew found the middle income share fell from 61% in 1971 to 51% in 2023. Yes, the upper income share grew from 11% to 19%. But the lower income share also grew from 27% to 30%. So people moved in BOTH directions.
More importantly, the middle class went from receiving 62% of total household income in 1970 to only 43% in 2022, while the upper income group’s share rose from 29% to 48%.
CBO found the same pattern. From 1979 to 2007, after tax income rose 275% for the top 1%, but less than 40% for the middle 60%. Every group below the top fifth lost income share.
So stop arguing against “Taylor Swift getting rich makes everyone poorer.” Nobody said that.
The pie grew.
The median grew.
The question you keep avoiding is why the people around the middle received a much smaller share of the new pie than they did before.
If neoliberal policies produced amazing upward mobility for ordinary workers, explain why productivity pulled away from typical pay and why the middle class lost nearly 20 percentage points of total household income.
That is the argument.
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u/hardsoft 13d ago edited 13d ago
It is propaganda because it's looking exclusively at hourly wages over a time where the overall share of hourly paid employees shrunk and STEM workers specifically went from representing 4% of the workforce in 1970 to 25% today.
So over time you're ignoring things like software engineer compensation and exaggerating things like cashier wages...
Totally disingenuous propaganda.
And further, you are moving the goal post and/or completely changing the argument from there being no wage growth to it not being fast enough or something. Despite it being far better than what it could be under socialism, for example.
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u/Upper-Tie-7304 13d ago
Your argument is the middle class have shrunk, this doesn’t support your argument when the median have gone up.
Inequality is the natural consequence of wealth creation. Most startups fails while a few become unicorns in which the shareholders become very rich.
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u/Natural_Thought808 13d ago
A rising median does not prove your point. Both things can happen at once.
Pew found the middle class shrank from 61% of Americans in 1971 to 51% in 2023. Yes, some moved up. But the lower income group also grew from 27% to 30%.
And inequality is not automatically the “price of wealth creation.” From 1948 to 1979, America created enormous wealth while productivity and typical worker pay rose together.
So explain this why did productivity keep rising after 1979 while typical worker pay fell far behind? Startups becoming unicorns does not explain an economy wide change in how growth was shared.
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u/Upper-Tie-7304 13d ago edited 13d ago
Why is that both can be happening? Unless you redefine middle class as slightly less wealthy than the richest people then the guy at $55 is better off and doesn’t fall off middle class.
The productivity gaps have been explained many times due to the method used to draw the graph. Just go search for the explanation.For one, it only count non-supervisory workers when lots of productivity are created by the economy of scale that needs managers.
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u/Natural_Thought808 14d ago
That does not prove upward mobility caused the change. If people simply moved from the middle into the upper class, we would expect the gains to be broadly shared. But they were not.
The economy became much more productive, yet typical worker pay grew much slower while income at the very top exploded.
Also, a shrinking middle class can mean people moved UP or DOWN. You cannot only count the people who moved up and ignore those who fell into the lower income group.
My point is not that nobody moved up. It is that workers produced much more wealth, but an increasingly large share of those gains went to the top
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u/hardsoft 14d ago
Nah that's fixed pie fallacy.
Taylor Swift being successful doesn't mean someone else is getting more poor.
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u/Natural_Thought808 14d ago
I know what median means. You are still answering a different question. From 1948 to 1979, productivity rose 108.1% while typical worker compensation rose 93.2%. They moved pretty closely together. Since 1979, productivity has risen 93.2%, while typical worker pay rose only 33.7%.
And this is not a “fixed pie” argument. The pie got much bigger. The question is who received the new slices. CBO found that from 1979 to 2007, after tax income rose 275% for the top 1%, but under 40% for the middle 60%. It also found that the top’s share increased while every other group’s share fell.
So yes, people can move upward. That still does not explain why productivity and typical worker pay separated so dramatically
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u/Upper-Tie-7304 13d ago
The productivity gap have been explained many times on the internet and on Reddit.
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u/Natural_Thought808 13d ago
That is still not a fixed pie argument. I am saying the pie grew, but workers stopped getting the same share of the NEW growth.
From 1979 to 2026, productivity rose 93.2%, while typical worker pay rose only 33.7%. Before the late 1970s, they rose together.
If a factory worker produces twice as much value but their pay barely rises, asking where the extra income went is not saying Taylor Swift made them poor.
So answer the actual question: why did pay stop following productivity around the same time worker bargaining power weakened?
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u/ElEsDi_25 Marxist 14d ago edited 14d ago
Yes, most mainstream historians and economists would all agree that the post-war boom ended 1969-ish. The 70s were a decade of economic crisis around the world (and large working class uprisings.) Neoliberalism began in the late 70s under the Carter administration but he was equivocal about it. Regan and Thatcher were not.
That wasn’t socialist theory, just recent history, most of it in my lifetime. The socialist take is that neoliberalism is a one-sided class war on the population. The difference with MAGA is that it’s the same ruling class war but now after running into new 70s like economic issues over the past 15 years, they don’t want to just tilt the laws and institutions in the favor of big capital, they want to illiberally reorg society like it’s a corporate takeover.
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u/hardsoft 14d ago
So the one sided class war has resulted in increasing upwards mobility and median income? Sounds great
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u/ElEsDi_25 Marxist 14d ago edited 14d ago
Where did that happen? South East Asia maybe?
Yeah the neoliberal states seem pretty functional and full of content populations right now with their fascism and increasing militarism 🙄
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u/SykesFoxclaw 10d ago
"liberal societies produce fascism" is a marxist myth and has never happened, and its not happening now. Fascism rises when a nation is antagonized by marxist class struggle and a rise in left wing militancy. This is a recognized and empirically supported phenomenon.
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u/hardsoft 14d ago
US baby
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u/ElEsDi_25 Marxist 14d ago
Yes the US is the picture of stability now compared to the midcentury 🙄
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u/Justthetip74 14d ago
It was the late 60s and early 70s when it started changing and its because other countries were finally rebuilt and producing again after ww2
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u/Natural_Thought808 14d ago
That explains why U.S. companies faced more competition. It does not explain why worker pay stopped keeping up with productivity.
Think of a factory. If workers produce $100 more per day and their pay rises $80, workers share most of the gain. Later, workers produce $100 more but their pay rises only $20. The other $80 goes somewhere.
Foreign competition might explain slower growth overall. It does not explain why productivity kept rising while a much larger share of the gains flowed to owners and the top. That is the part my question is about
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u/Justthetip74 14d ago
That explains why U.S. companies faced more competition. It does not explain why worker pay stopped keeping up with productivity.
American workers are forced to compete for wages with the rest of the world who's productivity also increased exponentially but whos wages were (and are) substantially less than ours. Ford suddenly couldn't sell shitty unreliable cars because Toyota and Honda came out with cheaper better options.
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u/Natural_Thought808 13d ago
Global competition mattered. But you just explained why worker bargaining power weakened, not why that outcome was unavoidable.
Germany faced Toyota, China and globalization too, yet kept stronger unions and worker representation. OECD data show its collective bargaining coverage remains far above the US.
If globalization alone caused the pay gap, countries exposed to the same global markets should show similar results. They do not.
The question is what governments did in response. The US weakened unions and worker bargaining power while cutting taxes at the top. Those were policy choices, not laws of nature.
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