THE AFFORDABILITY CRISIS Part 4

The U.S. affordability crisis is multifaceted and has been growing for 45 years, caused by low pay and high prices. Many factors have been depressing workers’ pay including the failure to raise the minimum wage, the weakening of unions, globalization, gig work, and reduced competition for workers.

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The U.S. affordability crisis is multifaceted and caused by low pay and high prices. (Previous posts have discussed the reasons for high prices.) This post will discuss the factors leading to low pay.

Over the last 45 years, workers’ pay has barely kept up with the increase in prices (i.e., inflation). And the pay increases there have been, have gone disproportionately to high earners. A study by the Economic Policy Institute found that between 1979 and 2019 the annual wages (adjusted for inflation) of the lowest-income 90% of workers increased by 26%, while the wages of those in the top 1% rose by 160%. The next richest 4% of workers saw their wages increase by 75%. CEOs now make about 300 times what their typical employee makes, while in 1960s they only made 20 times as much as the typical worker.

Good, middle-class blue- and white-collar jobs have been lost to globalization, while the compensation for the remaining jobs has declined due to the purposeful undermining of unions and global pay competition. The result is a crushing affordability crisis for many current and formerly middle-class households, as well as for lower income households.

According to a Brookings Institute analysis, 43% of American families can’t afford to pay for housing, food, health care, child care, and transportation. This figure is 59% for Black families and 66% for Latino families. The shift in income from workers to executives and investors has been dramatic: in 1947 workers received 70% of total national income, while today they get only 59%. Unlike the previous 35 years, after 1980, workers did not receive wage increases that were in line with their increases in productivity: from 1979 to 2025 workers’ productivity increased by 87% but their compensation only increased 33%. According to a Rand Corporation analysis, in 1975, the 90% of workers at the bottom of the income spectrum received 67% of national income, while in 2019 (the latest data it had) they received just 47% of national income. This highlights again the skewing of income to the top 10%. It calculated that if, in 2023, the 90% of workers with the lowest incomes had received 67% of national income (as they did in 1975), they would have earned an additional $4 trillion or, on average, each worker would have made $28,000 more than they did. Over the period from 1975 to 2023, if these workers had received 67% of national income, they would, in aggregate, have received $79 trillion more in income. [1]

There are many factors that have been depressing workers’ pay. They include:

Failure to raise the minimum wage. The federal minimum wage of $7.25 an hour is only 29% of a typical worker’s wage today; in 1968, it was 53% of the typical wage. If the minimum wage had been raised at the same pace as productivity growth since the late 1960s, it would be over $24 an hour today.
Dramatic weakening of unions by the emasculation of pro-union government policies and of the enforcement of labor laws, as well as by the monopolistic power of huge employers. These have resulted in a huge shift in power from workers to employers over the last 45 years. Union membership has declined from roughly a third of workers in the 1950s to under one-tenth of workers today and only one-sixteenth of private sector workers.
Globalization, which shipped jobs overseas and put downward pressure on the pay for the remaining jobs.
Gig work and the misclassification of workers as contractors and not employees, which reduces wages, removes the protections for employees that are in labor laws, and typically means they get no benefits (e.g., health insurance, sick or vacation time, and retirement benefits). A 2021 study estimated that nine million American workers, from Amazon and FedEx delivery personnel to Uber and Lyft drivers, earn between 15% and 30% less than they would as employees.

The gig work-based companies, using AI with vast amounts of personal data and tremendous computer processing power, can tweak the pay of gig workers instantaneously so each worker gets the minimum pay for which they’re willing to do a job. For example, Uber pays drivers based on their past behavior. If a driver is hungry for work, perhaps because they badly need the income, and therefore always grabs the first job that is offered, Uber will pay them less because it knows they’ll take the job. On the other hand, Uber will offer more to a driver that waits for a better paying option.
Reduced competition for workers among employers due to fewer, very large employers and the widespread use of non-compete clauses in workers’ contracts (which prevent workers from moving to similar work for another company, down to and including other franchisees of the same fast-food chain). The Federal Trade Commission under President Biden banned non-compete agreements but the Trump administration undid this.

Capitalism in the U.S. is out of control. Competition has been stymied and monopolistic power is widespread. This has happened because of the failure to enforce antitrust laws for 45 years (except for four years under President Biden).This means the invisible hand of a market economy and the economic “rules” of supply and demand do not work to give fair compensation to workers. The rules of the economic game have been rigged to favor large employers. One indicator that clearly confirms this is that corporate profits are at very high levels in terms of percentage of revenue. In 1980, 80% of corporate income was paid to workers; in 2025, that percentage was under 72% with the difference largely going to profits.

Regulators have been compromised (aka captured) by the large employers through the political influence garnered by campaign spending and lobbying, as well as the revolving door of personnel between government regulatory positions and private industry jobs. As a result, many aspects of corporate behavior have undergone deregulation, which allows companies to increase profits by, for example, blocking increases in the minimum wage, shipping jobs overseas, gig work, breaking existing unions, blocking union organizing, failing to negotiate in good faith with unions, and frequently preventing new unions from ever getting a contract. In 2018, 63% of new unions, each of which had been voted for by a majority of workers, failed to get their employer to agree to a contract within a year. Amazon workers at a New York City warehouse voted decisively for a union in April 2022, but as of December 2025, Amazon had refused to even begin contract negotiations with them. This reflects a lack of effective labor laws and a lack of enforcement of them.

My next post will discuss steps to take to tackle the affordability crisis.

[1] Meyerson, H., 12/3/25, “The $79 trillion heist,” The American Prospect (https://prospect.org/2025/12/03/79-trillion-heist-worker-pay/)

THE AFFORDABILITY CRISIS Part 3

The affordability crisis in the U.S. is multifaceted and has been growing for 45 years, due to low pay and high prices. Many factors are pushing up prices well beyond normal inflation, including premiumization of markets, profit-taking middlemen, and the failure to enforce antitrust laws. The Trump administration is doing nothing that affectively addresses the affordability crisis, while many of its actions exacerbate it.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

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My last post discussed profit-taking by middlemen and privatization of public goods and services as drivers of high prices. The previous post presented an overview of the affordability crisis in the U.S., its 45 year history, and discussed monopolistic price gouging, tariffs, and personalized (aka surveillance) pricing as factors leading to high prices.

This post will discuss:

The premiumization of markets, meaning that products and prices target consumers with high incomes.
Efforts to reduce pharmacy benefit managers’ (PBMs) inflation of drug prices.
The failure of the Trump administration to enforce antitrust laws, which allows unjustifiable increase prices by Live Nation / Ticketmaster and others.

The so-called premiumization of markets is happening because high economic inequality leads to consumer spending patterns that make things more expensive for everyone. Consumer spending represents roughly 70% of all economic activity in the U.S. and therefore drives the economy. However, given the high levels of economic inequality, the wealthiest 10% of Americans are now doing almost half of all consumer spending. As a result, retailers target their products and prices to those high-income consumers. Products often become more upscale and their prices go up. Lower priced options tend to disappear, or their prices go up because key consumers can afford to pay more. Sometimes the higher prices are “justified” by adding frills or fancier packaging. Sometimes those with money bid up the price of goods or services with a limited supply, such as housing, raising prices for everyone.

Moreover, the middle class, striving for upward mobility (or at least the appearance of it) and to “keep up with the Joneses,” feels coerced into spending like the top 10%. Fancy clothes and cars, expensive parties and weddings, and so forth are what some feel they need to buy to maintain their status with peers. Easy access to debt, including buy now, pay later (BNPL) plans, facilitate living beyond one’s means. For example, a quarter of BNPL consumers have used BNPL to pay their rent, a third have used it to pay for medical or dental expenses, and nearly 40% have used it to pay off another debt, such as a credit card. [1]

One example of premiumization is the market for workout gyms and health clubs. The market is bifurcating in many locations and the middle-priced facilities are disappearing. The remaining options are the bare bones gym at $15 to $50 a month, which is often quite crowded at peak times, and the upper-end health clubs at over $200 a month, featuring plush locker rooms, personal trainers, and sometimes jacuzzies, saunas, and a spa. [2]

Pharmacy Benefit Managers (PBMs) were supposed to reduce drug costs, saving insurers and consumers money, but they have morphed into rapacious profit makers. (See this previous post for more details.) Three huge, monopolistic PBMs (Cigna’s Express Scripts, CVS Health’s Caremark, and United Health’s Optum RX) manage 80% of the prescription drug business in the U.S. It’s estimated that 42 cents of every dollar paid for prescription drugs now goes to a PBM. [3] The spending bill passed by Congress in early February includes an effort to rein in PBMs and reduce drug prices. Starting in 2028, PBMs will be paid a flat fee rather than a percentage of a drug’s price, which will eliminate the incentive to push high-priced drugs even when cheaper alternatives are available. Increased disclosure by PBMs will be required and kickbacks from drug manufacturers will have to be passed back to the PBMs’ customers. [4]

As with the PBMs, other monopolistic middlemen can manipulate the market to make unjustifiably large profits. As this previous post highlighted, Live Nation (parent company of Ticket Master) is a prime example of a monopolistic middleman. [5] It handles the ticket sales for over 80% of the country’s prime concert venues, owns or controls over 330 venues, and manages over 400 top-of-the-line artists. However, the Trump Department of Justice (DOJ) appears to be about to agree to a lenient settlement of the antitrust case against Live Nation. This is happening despite Trump’s executive order in 2025 supposedly cracking down on price gouging for event tickets. And even though 40 state Attorneys General are also parties to the suit against Live Nation / Ticketmaster. Some of them are likely to continue the suit, but the federal settlement will make it harder. By the way, the Federal Trade Commission also sued Live Nation last September for deceptive ticket pricing. [6]

Trump-connected lobbyists have apparently overpowered the DOJ’s own antitrust division and gotten Trump and Attorney General Bondi to overrule the antitrust division once again. As a result, the head of the antitrust division, Gail Slater, resigned a few days after her second in command, Mark Hamer, had resigned. Back in August, the previous number two person, Roger Alford, was fired for resisting sweetheart settlements of antitrust cases. Trump friend, Mike Davis, is the lobbyist for Live Nation and he had previously gotten a $1 million “success fee” for getting the DOJ to drop its challenge to Hewlett Packard’s merger with Juniper Networks. (Several state Attorneys General are challenging the approval of this merger.) He also earned at least $1 million for getting the DOJ to approve the merger of the country’s two largest real estate brokers, Compass and Anywhere Real Estate, over the objections of antitrust division lawyers. Senator Elizabeth Warren (D-MA) said the settlements of these antitrust cases “looks like corruption. … MAGA-aligned lawyers and lobbyists have been trying to sell off merger approvals … to the highest bidder.” [7]

The Trump administration’s failure to enforce antitrust laws allows monopolistic companies to increase prices, overwhelm small businesses, and put a damper on innovation. Overall, the Trump administration is doing nothing that affectively addresses the affordability crisis, while many of its actions exacerbate it.

My next post will discuss the income side of the affordability crisis and the factors that lead to low pay.

[1] Janssen, E., 12/1/25, “Selling the poor on spending like they’re rich,” The American Prospect (https://prospect.org/2025/12/01/premiumization-plutonomy-middle-class-spending-gilded-age/)

[2] Fonseca, C., & Hecht, B., 2/13/26, “Slimmer pickings on midrange gym options,” The Boston Globe

[3] Curry Wimbish, W., 12/5/25, “Meet the connectors,” The American Prospect (https://prospect.org/2025/12/05/meet-the-connectors-middlemen/)

[4] Abelson, R., & Robbins, R., 2/5/26, “Congress looks to diagnose cause of high drug prices,” The Boston Globe from The New York Times

[5] Dayen, D., 4/30/24, “Live Nation strikes up the band in Washington,” The American Prospect (https://prospect.org/2024/04/30/2024-04-30-live-nation-strikes-up-band-washington/)

[6] Dayen, D., 2/12/26, “Trump Justice Department poised to preserve Ticketmaster monopoly,” The American Prospect (https://prospect.org/2026/02/12/trump-justice-department-ticketmaster-live-nation-monopoly/)

[7] Johnson, J., 2/13/26, “Warren says Trump DOJ ouster of antitrust chief ‘looks like corruption’ as lobbyists, Wall St rejoice,” Common Dreams (https://www.commondreams.org/news/warren-gail-slater-antitrust)

WHAT EVERYDAY AMERICANS WANT FROM GOVERNMENT Part 2

Many Americans are worried about the cost of living. Government policies can reduce or control the costs of everyday expenses. If Democrats or others want to garner support and votes, they should aggressively promote such policies. Some examples are presented below.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

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Many Americans are worried about the cost of living. The affordability of the cost of living has two components: 1) the amount of money people make and the benefits they get from their employer, and 2) the costs of everyday expenses from food to housing to health care to utilities. If Democrats, or another party such as the Working Families Party, want to garner support and votes, they should focus on the affordability of day-to-day life. They need to promote a vision of and policies for a more economically secure future for working Americans. This means embracing economic populism, including reducing economic inequality. [1]

This previous post discussed the first component, workers’ compensation. This post discusses ways public policies and government action can reduce, or at least control increases in, the cost of living, i.e., inflation. Over the last 45 years, the cost of everyday necessities has increased faster than workers’ wages, including for food, housing, child care, utilities, health care, and medicine.

Here’s an overview of some government policies that would reduce or control the cost of living. [2]

Rescind Trump’s tariffs. As even President Trump is now acknowledging, his tariffs have and will drive up consumer prices. He recently rescinded some tariffs on beef, coffee, tea, fruit and fruit juice, cocoa, spices, tomatoes and other commodities. He acknowledged that his tariffs may have contributed to higher prices at the supermarket. Since the first day that Trump announced his intention to impose tariffs, every reputable economist has stated that tariffs increase prices for consumers. (Note: Tariffs can be good policies if implemented as part of well-planned, comprehensive jobs or national security policies. However, Trump’s tariffs clearly do not meet this criterion.)
Enforce antitrust laws. Forty-five years of failure by the federal government to enforce antitrust laws (except for efforts to revitalize them under President Biden) have allowed the emergence of huge companies with monopolistic powers. This has harmed everyday Americans in many ways as outlined below. If Democrats or others, such as the Working Families Party, want to attract support and voters, they should unequivocally call out these huge companies and their oligarchic executives and investors for their greed and monopolistic behavior. This does mean that Democrats will have to stop cozying up to the oligarchs to get campaign donations.

Stop price gouging. Monopolistic or near monopolistic size allows companies to raise prices on consumers who have few if any options. In the short term, governments should implement windfall profits taxes and/or price controls to stop price gouging. In the longer term, governments should enforce antitrust laws and break up or impose very large fines on companies that engage in price gouging and other unfair, monopolistic business practices. This applies to a wide range of consumer goods and services from food to rent to air travel to health care to drug prices. It also applies to the big tech companies, Amazon, Meta (Facebook, Instagram, etc.), Alphabet (Google), Microsoft, and Apple.

Restore competition. By stopping mergers and acquisitions that lead to monopolistic power, and by breaking up monopolistic companies, competition could be restored to consumer markets. Without competition, prices go up and quality goes down, and consumers suffer.

Restoring competition would also reduce employers’ power over workers. Although this wouldn’t reduce costs, it would improve workers’ compensation and therefore the affordability of the cost of living. Employers’ power over workers has grown in multiple ways. The huge and monopolistic size of many employers limits the options for employees and, along with globalization, has allowed employers to undermine unions and cut workers’ compensation. Furthermore, many employers, including some fast-food chains, require employees to sign non-compete employment contracts that limit their ability to move to other employers for better jobs and better pay. President Biden took steps to ban non-compete agreements, but President Trump stopped this effort.

Stop privatization of public services and public goods. Privatization is often sold to the public with claims that the private sector will deliver cheaper and better services or products. This rarely turns out to be true. Once the profit incentive is introduced, prices are likely to go up and quality is likely to go down.

Nowhere is this clearer than in our health care system. The privatized system in the U.S. is the costliest system in any of the well-off countries of the world and its outcomes are among the worst. All elements of the system are putting profits before patients. Medicare is much more efficient than any of the private health insurance companies. The health care industry vehemently resisted including a public, Medicare-like option in the Affordable Care Act (ACA) because it knew the public option would deliver better care at lower prices. (See this previous post for more information on the failures of for-profit health care.)

Numerous other examples exist. Rail transportation in the rest of the world is more efficient, dependable, and convenient than the privatized system in the U.S. Internet service is cheaper and faster in Europe than in the U.S. (I’ve been criticizing privatization since way back in 2012. See this previous post and this one for more information.)

Stop the abuse of patents. Pharmaceutical companies abuse patent laws to keep cheaper generic versions of drugs from being introduced to the market. Classic cases of this are insulin and EpiPens. (See this previous post for more information.)
Enhance regulation. Regulations and enforcement of regulations need to be strengthened to protect consumers from fraud, price gouging, and unsafe food and products. Particularly where large companies have monopolistic power, strong regulation is needed. For example, millions of homeowners lost their homes in the aftermath of the 2008 financial crisis because large financial institutions were pushing fraudulent mortgages. The Consumer Financial Protection Bureau (CFPB) was created to protect consumers from financial fraud and abusive practices, such as exorbitant late and overdraft fees. The Trump administration is trying to eliminate the CFPB so big financial institutions can maximize their profits by ripping off consumers. (See this previous post for more information on the Trump administration’s weakening of regulations and the scams that are likely to be the result.)

My next post will discuss economic insecurity and inequality and the government policies that are needed to address them.

[1] Reich, R., 11/3/25, “What the Democrats must do. Now!” (https://robertreich.substack.com/p/what-the-democrats-must-do-now) /

[2] Kuttner, R., 11/12/25, “A blessing in disguise?” Today on The American Prospect (https://americanprospect.bluelena.io/index.php?action=social&chash=9a32ff36c65e8ba30915a21b7bd76506.3779&s=6009966078bda0f5 056f960a346ead8a

STANDING UP TO TRUMP AND CORPORATE OLIGARCHS

Oligarchy Definition A small group of people having formal and informal power based on (1)wealth; (2) connections; and (3) privilege.

American oligarchs have spent 45 years and billions of dollars undermining democracy and skewing government policy in their favor. We need to stand up and make Trump and corporate CEOs understand that the long-term success of their companies and our country depend on the trust and support of us, their customers and voters. We did this in a big way with the reaction to media executives pulling the Jimmy Kimmel show off the air. We need to do it again and again.

SPECIAL NOTE: We need millions of Americans at the No Kings protests on October 18 in defense of democracy. Please support this however you can. You can find an event near you here.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and get notices of my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

American oligarchs, i.e., wealthy individuals and their large corporations, have spent at least the last 45 years undermining democracy and skewing government policy in their favor by: (See this previous post for more details.)

Increasing, coordinating, refining, and hiding their spending of billions of dollars on election campaigns. They spent over $10 billion in the 2023-24 federal election cycle alone.
Spending billions of dollars on lobbying the federal government, currently to the tune of $4 billion a year.
Moving tens of thousands of people through the revolving door between jobs in their corporations and in the government agencies that regulate them.

These efforts have been very successful; their return on investment has been extraordinary. Trump and his anti-democratic, authoritarian, and fascist administration are the culmination of this work that has undermined our democracy and skewed government policies and our economy to favor the oligarchs. Examples of skewed government policies include the following.

The individual income tax rates on oligarchs’ incomes have been cut from 70% in 1980 and 92% in the 1950s to 37% today. Income taxes on income from wealth, i.e., long-term capital gains, have been cut from 28% in 1980 to 15% in 2012 but are back up to 24% today. Note that the tax rate on income from wealth (i.e., unearned income) has always been much lower than the tax rate on income from work (i.e., earned income). This benefits the oligarchs and entrenches and exacerbates wealth inequality. Furthermore, increases in wealth that aren’t cashed in aren’t taxed at all. As a result, the richest billionaires pay about 3.4% in income tax on their incomes while the average American pays 14.5%.

Corporate income tax rates have also been cut from 46% in 1980 to 21% today. Moreover, tax loopholes allow corporations many strategies to avoid taxes. In particular, multi-national corporations artificially shift profits to foreign countries with very low taxes. Corporations have also been allowed to move jobs to low-wage countries and to resist and undermine workers’ unions. Roughly one out of every three private sector workers was a union member in the 1950s; today it’s one out of every 15. [1]

Antitrust laws have basically been unenforced for the last 45 years. As a result, many sectors of the American economy are dominated by a few, large, monopolistic corporations. Reduced competition means corporations can raise prices, cut quality, and strong-arm employees. Deregulation has left consumers vulnerable to poor products and frustrating services.

All of this has led to 45 years of dramatically growing income and wealth inequality. The 50% of Americans with the least wealth now, collectively, have only 2.5% of national wealth (less than $23,000 each on average). The wealthiest 1% of Americans own 33% of national wealth (about $15 million each on average). Pay for CEOs is now 1,094% higher than in 1978, while a typical workers’ pay has only increased 26%. As a result, the CEO-to-worker pay ratio grew from 31 times a typical worker’s pay in 1978 to 281 times in 2024. [2] And CEOs now believe that their only responsibility is to maximize returns for shareholders; other stakeholders, including workers, customers, and communities, are not a matter for concern.

The oligarch’s successful assault on our democracy and public policies has resulted in many Americans losing their economic security, as well as their trust in government and democracy. Many of them don’t feel it’s worth voting because they don’t believe it’s going to make any difference. They believe government is controlled by special interests working to benefit themselves. These Americans are angry and fearful about the future. Therefore, they are willing to believe the lies that Trump tells them about bringing back their good jobs and wages. And they are willing to overlook his undermining of democracy.

We, American consumers, need to make corporate CEOs understand that the long-term success of their companies depends on the trust and support of us, their customers. We did this in a big way with the reaction to media executives pulling the Jimmy Kimmel show off the air in response to President Trump’s displeasure with him. We’ll need to do this again and again to wake up CEOs and to get them to focus on the long-term instead of pleasing the would-be dictator in the White House in the short-term.

The spinelessness of corporate CEOs in the face of Trump makes it clear that they “are poorly suited to be custodians of democracy or counterweights to presidential overreach.” [3] “Capitalism is compatible with democracy only if democracy is in the driver’s seat. … [Otherwise] It fuels despotism.” [4]

We, the American public, consumers and workers, must stand up for democracy and for its regulation of corporations and capitalism. Otherwise, we’ll continue down the slippery slope to oligarchy, authoritarianism, and fascism. We can stop this slide, as we did in the Jimmy Kimmel case.

I look forward to seeing millions of Americans engaged in the No Kings protests on October 18 and in many, many other smaller protests daily. Thank you for all you’re doing! Please keep up this great and important work to save our democracy!

Find an October 18^th No Kings event near you here and participate and support it in whatever way you can.

For lots of current good news see Jess Craven’s Chop Wood Carry Water blog here.

[1] Economic Policy Institute, retrieved from the Internet 9/29/25, “State of Working America: Unions,” (https://data.epi.org/unions/union_members_historical/line/year/national/percent_union_members_historical/overall)

[2] Gould, E., Bivens, J., & Kandra, J., 9/25/25, “CEO pay increased in 2024 and is now 281 times that of the typical worker,” Economic Policy Institute (https://www.epi.org/blog/ceo-pay-increased-in-2024-and-is-now-281-times-that-of-the-typical-worker-new-epi-landing-page-has-all-the-details/)

[3] Edelman, L., 9/23/25, “Why corporate leaders are appeasing Trump,” The Boston Globe

[4] Reich, R., 9/26/25, “Why are we so polarized? Why is democracy in such peril?” Blog post (https://robertreich.substack.com/p/why-are-we-so-polarized)