The current economic recovery, such as it is, is actually exacerbating the problem of inequality.
One side of that problem is the growth of corporate profits, and consequently the rise in the stock market and high-end salaries. The other side is the growth of low-paying jobs.
New research by the National Employment Law Project [pdf] shows that, during the recession, employment losses occurred throughout the economy, but were concentrated in mid-wage occupations. By contrast, during the so-called recovery, employment gains have been concentrated in lower-wage occupations, which grew 2.7 times as fast as mid-wage and higher-wage occupations.
The lower-wage occupations that grew the most during the recovery include retail salespersons, food preparation workers, laborers and freight workers, waiters and waitresses, personal and home care aides, and office clerks and customer representatives.
At this rate, we’re going to come out of the Second Great Depression with an even more unequal distribution of income in the United States than we went in with. And that’s saying a lot!
I can think of a couple remedies for this: Encourage union organization and pass laws that protect and strengthen them. Higher taxes for the highest incomes. Take the revenue from the higher taxes to fund higher salaries for educators–high enough to create public sector competition for the brightest minds. These changes will also strengthen middle class pay by forcing business to compete for talent with better pay and benefit packages. Prosperous middle class will further spread the wealth.