And not just re her speech, of course, but these figures represent critical themes she and the other candidates have and will continue to hit on.
First (h/t: Larry Mishel), here is something I suspect you haven’t seen, because these compensation data (wages + benefits) are not as well known as they should be. They are high quality, firm-level data on both wages and the full-spate of employer-provided benefits, including shift premiums, health and pension coverage, vacation pay, and more (see the underlying article for details).
Between 2007 and 2014, real wages and compensation fell up to about the 80th percentile for comp and the 90th for wages. Interestingly, the very low-end has done a bit better, perhaps due to minimum wage increases. Also, the inequality pattern is clear, as beginning around the 20th percentile, real pay falls less or starts rising as you go up the pay scale.
Also notably, compensation inequality outpaces wage inequality, as employer provided benefits have grown faster than wages for higher paid workers, who are much more likely to get such benefits in the first place.
The next figure is just as dramatic. It’s from an important new report by Bill Galston and Elaine Kamarck, documenting the sharp increase in both “financialization” (the growing share of the financial sector in GDP) and “short-termism” in financial markets, with an emphasis on dividend payouts and share buybacks versus using retained profits to reinvest in productive capital.
The figure shows the sharp divergence of these two trends–shareholder payouts and business investment–starting in the 2000s. Obviously, there’s a lot more going on here than two variables can reveal, but I found the report plenty convincing that as the emphasis on short-term returns has grown, in part due to its role in executive compensation, investment has suffered.
The authors recommend ways to disincentivize impatient capital, including changing some SEC rules that a) I believe would help and b) does not need legislation, I’m told.
Unfortunately, they ignore another potentially good idea in this space: a financial transaction tax, of which I’ll have more to say about later this week.