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These statistics show why the status quo is failing most Americans

Foreclosed houses in Columbus, Ohio

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Louisa Thomson CC BY-ND 2.0

Presidential campaigns are referendums on the economic status quo, but rarely offer more than superficial assessments of how much the status quo should be patched or tweaked in order to win the grudging support of a political majority. Candidates marshal economic indicators to make their case for how far and in what direction the status quo should be nudged.

In proper perspective, however, those indicators become a clarion call to go beyond nudges and patches to challenge the basic foundations of how our economy operates and who controls it. A look beyond the statistical snapshots candidates commonly use to long-term trends and global comparisons reveals that America’s economic problem is not that there’s something wrong with the status quo; it’s the status quo itself that’s wrong.

The Next System Project at the Democracy Collaborative recently published its first Index of Systemic Trends to better inform the political debate over the degree and shape of change America needs. While it is tempting to blame the nation’s ills on Donald Trump and the virulent form of populist, right-wing extremism he represents, this is an inadequate reading of our recent history —and a dangerous one at that. The rise of Trump is actually a symptom of a much longer systemic crisis that has been building over the last several decades. The Index of Systemic Trends is an effort to quantify, track, and visualize this crisis.

One of the signs that a crisis is systemic, rather than purely political or economic, is that key indicators decline or stay the same regardless of changes in political power or business cycles. Since 1970, the United States has experienced six party changes in the White House, five party changes in control of the Senate, and four in the House of Representatives. It has also experienced seven recessions (and recoveries). Yet on critical indicators of economic, social, and democratic health, our index shows little improvement and, in many cases, substantial deterioration over this period.

The trends considered in this section include poverty, wealth inequality, racial wealth inequality, income inequality, wage stagnation, the cost of higher education (and student loan debt), homeownership (and racial inequality), corporate taxation, taxation of the rich, union density, incarceration rates (including by race), labor force participation rates, healthcare costs, climate change, and life expectancy.

Share of US wealth held by key income groups

For example, since the early 1970s:

Wages have been stagnant for the vast majority of Americans. For production and nonsupervisory workers in the private sector, average hourly earnings today are essentially the same as they were in 1970 when inflation is factored in.

The wealth share of the top 1 percent has substantially increased, while the bottom 50 percent saw virtually no growth in their share, with any gains wiped out during the 2008 financial crisis.

● The poverty rate in the United States has remained relatively constant at about 13%, even in the face of what has been called the longest period of economic growth in recent American history.

The racial wealth gap has exploded. Whereas in the 1970s the median net worth of White households was around 1,500% higher than the median net worth of Black households, by 2016 White household median net worth was 4,000% higher than that of Black households, because Black net worth is actually shrinking.

● While average worker wages have stagnated for decades, the average cost of undergraduate tuition has more than doubled when adjusted for inflation, leading to astronomical levels of student debt, and per capita healthcare spending is close to five times higher.

Another way to assess whether a political-economic system is in crisis is to compare its outcomes against similar systems. The infamous slogan of the Trump presidential campaign — ”Make America Great Again” — presumes a state of American exceptionalism that should be our business to restore. Our index shows that, far from being exceptional, the United States compares relatively poorly with other advanced systems — specifically the 35 countries of the Organization for Economic Cooperation and Development.

Wealth inequality OECD comparison.png

For example:

● A higher percentage of children in the United States live in poverty (nearly 21%) than the population as a whole. Not only is that level of poverty unheard of in many other OECD countries, it’s unheard of that child poverty rates would be higher than overall rates. Several OECD countries have lower child poverty rates than general rates, including Denmark (2.9% vs. 5.5%), Finland (3.3% vs. 5.8%), Norway (7.7% vs. 8.2%), and Sweden (8.9% vs. 9.1%). The United States also has among the world’s highest rates of elder poverty.

● The United States still has one of the worst infant mortality rates of any advanced country, more than double many of its contemporaries in Europe. It also has one of the worst maternal mortality rates among advanced countries, with around 26 mothers dying during childbirth for every 100,000 live births. Finally, the United States has the lowest life expectancy of any of the high-income OECD countries (and is bested by numerous lower-income countries as well).

Union membership has always been less robust in the United States than at many of its contemporaries; now it is even more so.

● In an “Index of Economic Democracy” that measures workplace and individual rights, distribution of economic decision-making, transparency, and associational economic democracy, the United States finished dead last.

These are not statistical flukes caused by transitory events; it is evidence of chronic dysfunction at the heart of our current system.

The numbers in the Index of Systemic Trends tell the story of a political-economic system that consistently fails to deliver improvements in the lives of Americans or remain qualitatively competitive with other advanced economies. They reveal a systemic crisis that can only be fully addressed by moving toward a new system that can and will produce better outcomes.

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