Given the obsession with economic inequality, you might think it¡¯s the main force squeezing the middle class. It isn¡¯t.
We have this not from some right-wing think tank but from President Barack Obama¡¯s top economists. The bigger culprit, they show, is the slow growth of productivity ¡ª that messy process by which the economy improves efficiency and living standards. Greater inequality is a distant second in assaulting middle-class incomes.
So concludes the annual report of the White House Council of Economic Advisers. The CEA, as it¡¯s known, performed a fascinating ¡°what if¡± exercise. Assume that the most favorable post-World War II trends had continued: Productivity maintained its rapid growth of the 1950s and 1960s; inequality stayed at lower levels; and labor-force participation didn¡¯t drop. What happens then to middle-class incomes?
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