The article referenced in this blog can be read here from the Aspen Institute.
There is a growing disconnect between wealth and work, according to a report from the Aspen Institute. In recent decades, the US has seen economic growth, but workers’ wages have not increased alongside that growth.
Causes for Declining Wealth
Overall, today’s workers have a more difficult time getting ahead. “Families today work as hard as ever, but access to a middle-class standard of living has become increasingly unreliable,” the report explains. There are three causes identified for Americans’ difficulty accumulating wealth:
1. Wage Stagnation.
Between 1997 and 2012, a majority of the wealth from overall economic gains went to the top 1% of families, while the majority of Americans’ wages remained the same or even fell.
2. Financial Volatility.
Families near or below the poverty line often experience months at a time when their income or expenses deviate by more than 25% from their average. Unpredictable work and pay make it difficult for these families to save.
3. Diminished Access to Benefits.
Workers have a more difficult time accessing employer-sponsored benefits such as health insurance, workers’ comp, paid leave, or retirement.
While these impact many working-class families, minority households are more severely affected. In the last 30 years, the average wealth of white families increased by 14%, while wealth for Latino households dropped by 50% and African American households saw a 75% drop.
How to Address the Divide Between Wealth and Work
First, the report explains that better quality jobs need to be created for more Americans. The report also explains that an increased minimum wage and mandatory paid leave could help many low-income Americans achieve a middle-class standard of living, and argues for increased support of workers who are primary caregivers or returning citizens.
Next, a “broadly inclusive financial market” would better meet many Americans’ needs. This includes new, innovative financial tools to help more people save money and accumulate wealth. Additionally, improved access to retirement saving options would benefit many households.
Where to Learn More
Learn more about wealth and work by reading the report from the Aspen Institute, and explore related topics by checking out Talent 2025’s Workforce Development and Returning Citizens working groups.
