The post WWII economic boom ended in the late 1970s. In 1973, a survey of large US companies found that chief executives were paid 27% more than the average worker. By 2005 that had risen to 262 times.
In the 1970s, bank tellers were one of the fastest growing occupations. The job only required a high school degree and bank tellers made the equivalent of about $28,000 in 2010 dollars. Counting for inflation, the job now pays less than it did in 1970, averaging around $25,000 a year. Today, the BLS projects a growth for bank tellers of only 6% during the next decade. Workers such as cashiers, typists, welders, farmers and appliance repairmen have `hollowed out'. The book mentions a 25 year old high school graduate factory worker whose wife in 1973 was able to stay home to raise their three children. This factory worker's pay was good enough to earn him close to the median for married couples.
From the 1950s to the 1972, college tuition cost 4% (for public) and 20% (for private) of a family's median income. Bt 2005, public university education cost a family 10% of their median income, and 45% for private university tuition.
Elizabeth Warren, who was appointed by President Obama to set up the Consumer Financial Protection Bureau, said that `Today's dual income families have less discretionary income and less money to put away for a rainy day'. Middle income families, she says are living close to the financial edge.
The author cites statistics and offers usual reasons for what he calls `The Great Divergence' such as racism, sexism, shifts in marriage patterns, the rise in single parenthood, computers and foreign workers.
The author states that in the past, productivity increases meant prosperity for everyone. Now it means prosperity for the wealthy.
The author has a chapter about why this matters and makes suggestions about what can be done.