I'm not saying you're wrong. The way new money is distributed (via banks) definitely favors the rich, as does inflation assuming there is not sufficient upward pressure on wages for them to keep up. But I also always have to point out that a lot of things happened in the early 1970s:
- We opened a lot of avenues for labor outsourcing and starting importing more finished goods.
- Factory and office automation started ramping up as the information revolution really began.
- The 1970s saw the beginning of the trend toward "neoliberal" style economics with lower taxes on the rich and less investment in social and infrastructure programs.
- The Kennedy assassination, many other somewhat suspicious assassinations, the Vietnam war, etc. all started a process of erosion of public trust in US institutions.
- Women joined the work force in droves. I completely support womens' right to do this, but I also have to point out the completely amoral mathematical supply and demand implications for the cost of labor. More minorities joining the workforce also counts. You could say that prior to this era racism and sexism created a white male labor cartel and that this cartel was broken.
- Unions really started to get broken in the 1970s and have never really come back.
I could keep going...
IMHO most large scale social and economic movements have more than one cause. Back to inflation though, it's possible that inflationary economics became more harmful to the middle class when combined with the things above as many of the factors I listed made it hard for wages to keep up with inflation.
> - The 1970s saw the beginning of the trend toward "neoliberal" style economics with lower taxes on the rich and less investment in social and infrastructure programs.
Federal, state and local expenditures and tax receipts as a percentage of GDP has increased since 1970s [0]
Public infrastructure spending is roughly flat as percentage of GDP [1]
However, all of those things are things that happen over time (except assasination, and Kennedy's assassination happened 8 years before), which does not explain the obvious inflection point in those graphs.
I honestly think that some of those things may have been caused by the removal of the gold standard, especially neoliberal economics. (Obviously, things like minorities and women's rights probably not so much; those things were already happening.)
So yes, you are right that those things also changed, but what caused what?
Thing is in a closed system that is steady in other ways, wages should keep up with inflation.
It would be interesting to graph inflation adjusted wages per capita ignoring employment rates to test whether increased women or minority participation in the workforce explains the lag of wages behind inflation.
Once again I have to point out that supply and demand economics are as amoral and apolitical as physics. Don't read any opinion commentary into that.
There is talk of labor shortages now and employers are being forced to increase wages. If workforce equality is a major explanation then maybe the change in employment demographics has played itself out and now wages will start keeping up a little better. Maybe. Or maybe more jobs will get replaced by robots and industry in other countries.
Any remaining gap is probably attributable to outsourcing.
What I do wonder is whether the decoupling of the dollar from gold and consequent monetary inflation masked the effects of all the other things I mentioned enough that we could impoverish the middle class without people rioting in the streets. If we'd stayed on gold people would have seen their paychecks decline in both nominal and real terms.
- We opened a lot of avenues for labor outsourcing and starting importing more finished goods.
- Factory and office automation started ramping up as the information revolution really began.
- The 1970s saw the beginning of the trend toward "neoliberal" style economics with lower taxes on the rich and less investment in social and infrastructure programs.
- The Kennedy assassination, many other somewhat suspicious assassinations, the Vietnam war, etc. all started a process of erosion of public trust in US institutions.
- Women joined the work force in droves. I completely support womens' right to do this, but I also have to point out the completely amoral mathematical supply and demand implications for the cost of labor. More minorities joining the workforce also counts. You could say that prior to this era racism and sexism created a white male labor cartel and that this cartel was broken.
- Unions really started to get broken in the 1970s and have never really come back.
I could keep going...
IMHO most large scale social and economic movements have more than one cause. Back to inflation though, it's possible that inflationary economics became more harmful to the middle class when combined with the things above as many of the factors I listed made it hard for wages to keep up with inflation.