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After growing at more than 3% a year in 2004 and 2005, the pace picked up to a blistering 5.6% annual rate in the first quarter of this year - although the pace has since then slipped back to 2.9%.

So far, though, little of that growth has translated into the hands of the average worker, according to new research from the Economic Policy Institute (EPI).

"The unprecedented split between growth and living standards is the defining economic agenda of the day," says the EPI's senior economist, Jared Bernstein. During the five years from 2000 to 2005, the US economy grew in size from $9.8 trillion to $11.2 trillion, an increase in real terms of 14%. Productivity - the measure of the output of the economy per worker employed - grew even more strongly, by 16.6%. But over the same period, the median family's income slid by 2.9%, in contrast to the 11.3% gain registered in the second half of the 1990s.

Their "State of Working America" fact sheet is available now online here.

The poor performance of the US economy in delivering fuller wage packets may be one reason why the public gives the Bush administration's such a low rating on economic policy.

According to the latest Gallup poll, only 37% approve of Mr Bush's handling of the economy, and 70% think economic conditions are getting worse, substantially worse figures than in 2004.

No wonder there is an increasing chasm between the rich and the poor in this country.

This won't end nicely.

The widening chasm between rich and poor is clearly one of the most important and defining issues of this century, not only in the US but worldwide. It raises the question, How can progressives tackle this issue and bring it to the forefront of the political conversation?

It seems to me there is a paradox in the normal liberal approach: The disenfranchised impoverished require enlightened outside help. (1) Most Americans, including liberals, like the idea of a meritocratic society, where ideally people can capitalize on their strengths, and, with luck, move up the ladder. Managed economies smack of failed socialism. (2) No one likes to be told that they are helpless victims of the larger capitalist machine.

I'm all for milking the rich to pay (more of) their share, but to have genuine political change, we need a language of economic justice that gives everyone a sense of agency (personal stakes and control) in addition to the larger call for fairness. Yet, to be convincing, we can't disregard the fact of differing interests, skills, and resources.

The studies of widening income disparities are important, but they lack fangs if they become interpreted in terms of "winners should win, so disparities are inevitable." There is a missing link in the current cultural logic of inequality that economic data alone can't fill.

Thoughts?

Great site, BTW. -- Ian

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