Print-Friendly Version Rising Tides, Sinking Wages Lawrence Mishel T he economy seems to be in great shape. The growth rate in 1994 was a brisk 4.1 percent. Job growth has been so strong that President Clinton's campaign pledge to create eight million jobs may well be fulfilled in the third year of his first term. Corporate profitability has reached postwar records. The stock market is booming.
Inflation is nowhere to be found except in the imagination of central bankers and bond traders.
We are also witnessing a revival of productivity growth and a celebration of America's renewed competitiveness, as U.S. products close the quality gap with imported goods and unit labor costs continuously fall relative to those of other advanced countries. Some analysts feel that our productivity growth is so strong and the promise of computerization so great that we are on the verge of a new, golden economic age. This recovery has demonstrated that improved competitiveness, productivity, and overall economic growth do not necessarily translate into improved incomes for most families. In the 1980s, family incomes were stagnant. Meanwhile, poverty grew at the bottom end while income and wealth soared among the top 1 percent.