Michael Spitzer-Rubenstein

The fabled American Dream suggests that by working hard and playing by the rules, any American may prosper. For the generations born in the 1950s and 1960s, this largely held true. The economy boomed, business prospered, and all Americans shared in the gains—both the richest Americans and those working themselves into the middle class.  Children expected to earn more than their parents and, by and large, they did. Times are different now, and this dream has seemingly fallen apart.

Millions of Americans are out of work or are forced to work only part-time. For Americans who are working, they are taking home less and less. Since 1973, incomes for most Americans have stagnated. Just compare the average hourly wage in 1972, $20.06 an hour after factoring in inflation, with today’s average hourly wage of $18.52. Over the same period, corporate profits doubled and CEO pay close to quadrupled. 

It’s not just wages. Many employers are cutting health and retirement benefits, squeezing the 99 percent even more. For instance, take Walmart, which posted a profit of over $15 billion last year.

Last week the retail giant announced its plan to slash health benefits for its workers. The company cited “rising costs.” But this was simply a choice made by Walmart’s executives to squeeze more from its workers at a time of sky-high profits. They expect to increase profits this year compared to last year. Class warfare, indeed.

One worker profiled in a story by The New York Times, Tammy Yancey, would now have to pay $127.90 every two weeks to get health care through Walmart, more than double the $53.80 she had been paying. But Ms. Yancey, who makes $9.50 an hour, is barely above the absurdly low poverty line  and won’t be able to afford those newly increased premiums.

It’s important to keep in mind that Ms. Yancey isn’t the only person in her situation. About one in six Americans with a job today work in retail and for many of those 24 million Americans, it may be worse. The low wages in this growing industry also drive down wages for every American hoping to find work, regardless of the industry.

Walmart executives would tell you they’re just doing their job—maximizing profits for themselves and shareholders. Free-market stalwart Milton Friedman talked of the responsibility of businesses to maximize their profits “within the rules of the game.” But clearly the rules of the game are no longer fair, and it is the responsibility of government to ensure that the rules are fair. This disconnect is at the heart of the Occupy movement that is growing across the US.

This movement should think beyond Wall Street and financial regulations and consider labor laws like the minimum wage. In today’s dollars, the minimum wage was worth far more from 1960 through 1980, hitting a high of $10.04 in 1968. It should also consider strengthening its relationship with labor unions. It is no coincidence that wage stagnation has happened in conjunction with falling union membership. Strong union membership in the retail sector would certainly help lift wages and help struggling Americans like Ms. Yancey.

Of course, Congressional Republicans would tell you that any effort that stems the flow of wealth to the top one percent would hurt employment. That’s why they oppose President Obama’s jobs bill and its tax increases on millionaires and corporate profits. But this thinking is out of step with Americans on Main Street, who oppose cutting corporate taxes and favor raising taxes on millionaires by a margin of two-to-one. Now that the Occupy movement has gained the nation’s attention, perhaps members of Congress will wake up and take notice.