The Top 0.1% and the Disappearing Middle-Class

“The ongoing explosion of the incomes of the richest households and the erosion of middle-class employment opportunities for most of the rest have become integrally related in the now-normal operation of the U.S. economy. Since the beginning of the 1980s, employment relations in U.S. industrial corporations have undergone three major structural changes – summarized as “rationalization,” “marketization,” and “globalization” – that have permanently eliminated middle-class jobs in the United States. . . .

“The fundamental problem is the obsessive focus of U.S. corporations on their stock prices. While the old structures of stable and remunerative employment were being undermined by rationalization, marketization, and globalization, U.S. business corporations became afflicted with a socioeconomic disease known as “financialization.” The prime manifestations of financialization have been, and remain, the distribution of corporate cash to shareholders through stock repurchases, often in addition to generous cash dividends, and, incentivizing these distributions, the stock-based explosion of the remuneration of top corporate executives. . . .

“The exploding incomes of the top 0.1% and the erosion of the American middle class are integrally related. The attainment of stable and equitable growth in the U.S. economy in the twenty-first century will require an organizational revolution far more profound than the managerial revolution that occurred in the opening decades of the twentieth century. And it is the employees at the top of the major corporations, the legatees of that managerial revolution, who now must be brought under control. If not, inequity and instability in the U.S. economy will only get worse.”

Read the complete paper at -- http://www.theairnet.org/v3/backbone/uploads/2014/09/Lazonick_LaborInTheTwenty-FirstCentury_AIR-WP14.0801.pdf