While most of official Washington has been consumed with the Senate impeachment trial, another part of Washington is preparing the most far-ranging changes in American social policy in a generation.

Congress is moving ahead with Biden’s American Rescue Plan, which expands health care and unemployment benefits, and contains one of the most ambitious efforts to reduce child poverty since the New Deal. Right behind it is Biden’s plan for infrastructure and jobs.

The juxtaposition of Trump’s impeachment trial and Biden’s ambitious plans is no coincidence.

Trump left Republicans badly fractured and on the defensive. The Republican Party is imploding. Since January 6^th, growing numbers of Republicans have deserted it. State and county committees are becoming wackier by the day. Big business no longer has a home in the crackpot GOP.

Republican infighting has created a political void into which Democrats are stepping with far-reaching reforms. Biden and the Democrats, who now control the White House and both houses of Congress, are responding boldly to the largest social and economic crisis since Great Depression.

Importantly, they are now free to disregard conservative canards that have hobbled America’s ability to respond to public needs ever since Ronald Reagan convinced the nation that big government was the problem.

The first is the supposed omnipresent danger of inflation and the accompanying worry that public spending can easily overheat the economy.

Rubbish. Inflation hasn’t reared its head in years, not even during the roaring job market of 2018 and 2019. “Overheating” may no longer even be a problem for globalized, high-tech economies whose goods and services are so easily replaceable.

Biden’s ambitious plans are worth the small risk, in any event. If you hadn’t noticed, the American economy is becoming more unequal by the day. Bringing it to a boil may be the only way to lift the wages of the bottom half. The hope is that record low interest rates and vast public spending generate enough demand that employers will need to raise wages to find the workers they need.

A few Democratic economists who should know better are sounding the false alarm about inflation, but Biden is wisely ignoring them. So should Democrats in Congress.

Another conservative bromide is that a larger national debt crowds out private investment and slows growth. This view hamstrung the Clinton and Obama administrations as deficit hawks warned against public spending unaccompanied by tax increases to pay for it. (I still have some old injuries from those hawks.)

Fortunately, Biden isn’t buying this, either.  

Four decades of chronic underemployment and stagnant wages have shown how important public spending is for sustained growth. Not incidentally, growth reduces the debt as a share of the overall economy. The real danger is the opposite: fiscal austerity shrinks economies and causes national debts to grow in proportion.

The third canard is that generous safety nets discourage work.

Democratic presidents from Franklin D. Roosevelt to Lyndon Johnson sought to alleviate poverty and economic insecurity with broad-based relief. But after Reagan tied public assistance to racism – deriding single-mother “welfare queens” – conservatives began demanding stringent work requirements so that only the “truly deserving” received help. Bill Clinton and Barack Obama acquiesced to this nonsense.

Not Biden. His proposal would not only expand jobless benefits but also provide assistance to parents who are not working – thereby extending relief to 27 million children, including about half of all Black and Latino children. Republican Senator Mitt Romney of Utah has put forward a similar plan.

This is just common sense. Tens of millions are hurting. A record number of American children are impoverished, according to the most recent Census data.

The pandemic has also caused a large number of women to drop out of the labor force in order to care for children. With financial help, some of them will be able to pay for childcare and move back into paid work. After Canada enacted a national child allowance in 2006, employment rates for mothers increased. A decade later, when Canada increased its annual child allowance, its economy added jobs.

It’s still unclear exactly what form Biden’s final plans will take as they work their way through Congress. He has razor-thin majorities in both chambers. In addition, most of his proposals are designed for the current emergency; they would need to be made permanent.

But the stars are now better aligned for fundamental reform than they’ve been since Reagan.

It’s no small irony that a half century after Reagan persuaded Americans that big government was the problem, Trump’s demise is finally liberating America from Reaganism – and letting the richest nation on earth give its people the social supports they desperately need.

Donald Trump poses as a working-class populist, but about his new economic plan would be a gusher for the wealthy. And almost nothing will trickle down to anyone else.

Not incidentally, his plan provides a huge windfall for the Trump family. If Trump is worth as much as he says, his heirs would get a tax break of $4 billion to $7 billion.

Moreover, he’d let global corporations pay just a 10 percent tax rate on untaxed offshore profits – another mammoth gift to big shareholders.

Consider: Apple, Pfizer, Microsoft and other global American corporations hold $2.4 trillion in earnings abroad. They owe some $700 billion in taxes on these earnings. Trump’s 10 percent tax rate would raise only about $150 billion. It wouldn’t even generate new investment in America. A tax amnesty was tried in 2004 and it was a dud.

Trump says his tax cuts would cost $4.4 trillion over 10 years. He claims most of it would be paid for by economic growth.

We’ve been here before.

Both Ronald Reagan and George W. Bush tried supply-side “trickle-down” economics. We should have learned two lessons.

First, nothing trickles down. The giant tax cuts on the wealthy enacted by Reagan in the 1980s and Bush in the 2000s enriched those at the top – but the wages of the bottom 60 percent went nowhere. 

Second, such tax cuts produce giant budget deficits. Under Reagan and George H.W. Bush, the federal budget deficit exploded. It took Bill Clinton’s administration (of which I was proud to have been a member) to get the budget back in some semblance of balance.

Then, under George W. Bush, what happened? The deficit exploded again.  

Trump would do all this on a far grander scale. He’s also proposing a vast expansion of the military, including 90,000 new soldiers for the Army and nearly 75 new ships for the Navy. The tab: an estimated $90 billion a year in additional spending.

This would mean big bucks for military contractors. But it’s hard to see how economic benefits trickle down to anyone else.

Perhaps Trump is banking on an indirect fiscal stimulus – the kind of “military Keynesianism” Ronald Reagan employed to fuel growth in the 1980s. But as we learned then, this sort of growth doesn’t trickle down, either.

Trump also pledges a gigantic infrastructure building program to “build the next generation of roads, bridges, railways, tunnels, sea ports, and airports.”

Hillary Clinton has proposed spending $275 billion on infrastructure over five years.

The Donald is thinking much bigger. “Her number is a fraction of what we’re talking about,” says Trump. “We need much more money to rebuild our infrastructure. I would say at least double her numbers, and you’re going to really need a lot more than that.”

Okay, so let’s call this $500 billion over five years.

Trump doesn’t stop there. A “foundation” of his economic plan, he says, is to renegotiate Nafta, bring trade cases against China, and “replace the present policy of globalism – which has moved so many jobs and so much wealth out of our country –with a new policy of Americanism.”

Who would benefit from a retreat from globalism? Maybe giant American corporations that don’t export from the U.S. because they already make things abroad for sale in foreign markets. But not average Americans, who’d have to pay more for just about everything.

Choking off trade won’t result in more good jobs in America. Trump says his trade policy will bring back manufacturing to the United States. But today’s factories are automated. Even in China, numerical-controlled machine tools and robots are replacing humans.

Oh, and Trump also wants to scrap many environmental, health, and safety regulations. He says this will further stimulate growth.

It’s another form of trickle-down nonsense. Even if we could get more growth by scrapping such regulations, growth isn’t an end in itself. The goal is a higher standard of living for most Americans.

If our air and water are unhealthy, if we’re subject to more floods and draughts (especially lower-income Americans who can’t afford to protect themselves and their homes from the devastation), if our workplaces and our food are unsafe, what’s the consequence? Our standard of living drops.

Trickle-down economics has proven itself a cruel hoax. It’s cruel because it rewards people at the top who least need it and hurts those below who are in greatest need. It’s a hoax because nothing trickles down.

Trump’s “yuge” trickle-down economics would be an even bigger bamboozle.

INTO THE WORLD OF WORK

What do you need to know – about the new world of work, but also about yourself – as you graduate and launch yourself into the world of work? We made a short film of my last class of the semester, where I speak to graduating seniors about these questions and more. If you’re a graduating senior (or know one) we hope this is helpful.

Both Bernie Sanders and Donald Trump are blaming free-trade deals for the decline of working-class jobs and incomes. Are they right?

Clearly, America has lost a significant number of factory jobs over the last three decades. In 1980, 1 in 5 Americans worked in manufacturing. Now it’s 1 in 12.

Today Ohio has a third fewer manufacturing jobs than it had in 2000. Michigan is down 32 percent.

Trade isn’t the only culprit. Technological change has also played a part.

When I visit one of America’s remaining factories, I rarely see assembly-line workers. I don’t see many workers at all. Instead, I find a handful of technicians sitting behind computer screens. They’re linked to fleets of robots and computerized machine tools who do the physical work.

There’s a lively debate among researchers as to whether trade or technology is more responsible for the decline in factory jobs. In reality the two can’t be separated.

Were it not for technological breakthroughs we wouldn’t have the huge cargo containers, massive container ports and cranes, and satellite and Internet communications systems that have created highly-efficiently worldwide manufacturing systems.

These systems have relocated factory jobs from the United States to Asia, especially to China. Researchers find the biggest losses in American manufacturing started in 2001 when China joined the World Trade Organization, requiring the U.S. to lower tariffs on Chinese goods.

MIT economist David Autor and two co-authors estimate that between 2000 and 2007 the United States lost close to a million manufacturing jobs to China – about a quarter of the total decline in those years. Robert Scott of the Economic Policy Institute puts the loss since then at about 3 million.

This doesn’t mean free trade has been entirely bad for Americans. It’s given us access to cheaper goods, saving the typical American thousands of dollars a year.

A recent study by economists at UCLA and Columbia University found that trade has increased the real incomes of the U.S. middle class by 29 percent, and even more for those with lower incomes.

But trade has widened inequality and imposed a particular burden on America’s blue-collar workers.

If you’re well educated, free trade has given you better access worldwide markets for your skills and insights – resulting directly or indirectly in higher pay.

On the other hand, if you’re not well educated, the trade deals of the last quarter century have very likely taken away the factory job you (or your parents or grandparents) once relied on for steady work with good pay and generous benefits.

These jobs were the backbone of the old American middle class. Now they’re almost all gone, replaced by lower-paying service jobs in places like retail stores, restaurants, hotels, and hospitals.

The change has been a dramatic. A half century ago America’s largest private-sector employer was General Motors, whose full-time workers earned an average hourly income (including health and pension benefits) of around $50, in today’s dollars.

Today America’s largest employer is Walmart, whose typical employee earns just over $9 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t even qualify for benefits.

The core problem isn’t really free trade, or even the loss of factory jobs per se. It’s the demise of an entire economic system in which people with only high-school degrees, or less, could count on good and secure jobs.

That old system included strong unions, CEOs with responsibilities to their employees and communities and not just to shareholders, and a financial sector that didn’t demand the highest possible returns every quarter.

Trade has contributed to the loss of this old system, but that doesn’t necessarily mean we should give up on free trade. We should create a new system, in which a greater share of Americans can be winners.

But will we? The underlying political question is whether the winners from America’s current economic system – people with college degrees, the right connections, and good jobs that put them on the winning side of the divide – will support new rules that widen the circle of prosperity to include those who have been on the losing side.

Those new rules might include, for example, a much larger Earned Income Tax Credit (effectively, a wage subsidy for lower-income workers), stronger unions in the service sector, world-class education for all (including free public higher education), a single-payer healthcare plan, more generous Social Security, and higher taxes on the wealthy to pay for all this.

If the winners refuse to budge, America could turn its back on free trade – and much else. Indeed, there’s no telling where the anger we’ve seen this primary might lead. 

The great American middle class has become an anxious class – and it’s in revolt.

Before I explain how that revolt is playing out, you need to understand the sources of the anxiety.

Start with the fact that the middle class is shrinking, according to a new Pew survey.

The odds of falling into poverty are frighteningly high, especially for the majority without college degrees.

Two-thirds of Americans are living paycheck to paycheck. Most could lose their jobs at any time.

Many are part of a burgeoning “on-demand” workforce – employed as needed, paid whatever they can get whenever they can get it.

Yet if they don’t keep up with rent or mortgage payments, or can’t pay for groceries or utilities, they’ll lose their footing.

The stress is taking a toll. For the first time in history, the lifespans of middle-class whites are dropping.

According to research by the recent Nobel-prize winning economist, Angus Deaton, and his co-researcher Anne Case, middle-aged white men and women in the United States have been dying earlier.

They’re poisoning themselves with drugs and alcohol, or committing suicide.

The odds of being gunned down in America by a jihadist are far smaller than the odds of such self-inflicted deaths, but the recent tragedy in San Bernadino only heightens an overwhelming sense of arbitrariness and fragility.

The anxious class feels vulnerable to forces over which they have no control. Terrible things happen for no reason.

Yet government can’t be counted on to protect them.

Safety nets are full of holes. Most people who lose their jobs don’t even qualify for unemployment insurance.

Government won’t protect their jobs from being outsourced to Asia or being taken by a worker here illegally.

Government can’t even protect them from evil people with guns or bombs. Which is why the anxious class is arming itself, buying guns at a record rate.

They view government as not so much incompetent as not giving a damn. It’s working for the big guys and fat cats – the crony capitalists who bankroll candidates and get special favors in return.

When I visited so-called “red” states this fall, I kept hearing angry complaints that government is run by Wall Street bankers who get bailed out after wreaking havoc on the economy, corporate titans who get cheap labor, and billionaires who get tax loopholes.

Last year two highly-respected political scientists, Martin Gilens and Benjamin Page, took a close look at 1,799 policy decisions Congress made over the course of over twenty years, and who influenced those decisions.

Their conclusion: “The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.”

It was only a matter of time before the anxious class would revolt.

They’d support a strongman who’d promise to protect them from all the chaos.

Who’d save jobs from being shipped abroad, slam Wall Street, stick it to China, get rid of people here illegally, and block terrorists from getting into America.

A strongman who’d make America great again – which really means make average working people safe again.

It was a pipe dream, of course – a conjurer’s trick. No single person can do this. The world is far too complex. You can’t build a wall along the Mexican border. You can’t keep out all Muslims. You can’t stop corporations from outsourcing abroad.

Nor should you even try.

Besides, we live in a messy democracy, not a dictatorship.

Still, they think maybe he’s smart enough and tough enough to pull it off. He’s rich. He tells it like it is.

He makes every issue a test of personal strength. He calls himself strong and his adversaries weak.

So what if he’s crude and rude? Maybe that’s what it takes to protect average people in this cruelly precarious world.

For years I’ve heard the rumbles of the anxious class. I’ve listened to their growing anger – in union halls and bars, in coal mines and beauty parlors, on the Main Streets and byways of the washed-out backwaters of America.

I’ve heard their complaints and cynicism, their conspiracy theories and their outrage.

Most are good people, not bigots or racists. They work hard and they have a strong sense of fairness.

But their world has been slowly coming apart. And they’re scared and fed up.

Now someone comes along who’s even more of a bully than those who for years have bullied them economically, politically, and even violently.

The attraction is understandable, even though misguided.

If not Donald Trump, then it will be someone else posing as a strongman. If not this election cycle, it will be the next one.

The revolt of the anxious class has just begun.

In 1928, famed British economist John Maynard Keynes predicted that technology would advance so far in a hundred years – by 2028 – that it will replace all work, and no one will need to worry about making money.

“For the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”

We still have thirteen years to go before we reach Keynes’ prophetic year, but we’re not exactly on the way to it. Americans are working harder than ever.

Keynes may be proven right about technological progress. We’re on the verge of 3-D printing, driverless cars, delivery drones, and robots that can serve us coffee in the morning and make our beds.

But he overlooked one big question: How to redistribute the profits from these marvelous labor-saving inventions, so we’ll have the money to buy the free time they provide?

Without such a mechanism, most of us are condemned to work ever harder in order to compensate for lost earnings due to the labor-replacing technologies.

Such technologies are even replacing knowledge workers – a big reason why college degrees no longer deliver steadily higher wages and larger shares of the economic pie.

Since 2000, the vast majority of college graduates have seen little or no income gains.

The economic model that predominated through most of the twentieth century was mass production by many, for mass consumption by many.

But the model we’re rushing toward is unlimited production by a handful, for consumption by the few able to afford it.

The ratio of employees to customers is already dropping to mind-boggling lows.

When Facebook purchased the messaging company WhatsApp for $19 billion last year, WhatsApp had fifty-five employees serving 450 million customers.

When more and more can be done by fewer and fewer people, profits go to an ever-smaller circle of executives and owner-investors. WhatsApp’s young co-founder and CEO, Jan Koum, got $6.8 billion in the deal.

This in turn will leave the rest of us with fewer well-paying jobs and less money to buy what can be produced, as we’re pushed into the low-paying personal service sector of the economy. 

Which will also mean fewer profits for the handful of billionaire executives and owner-investors, because potential consumers won’t be able to afford what they’re selling.

What to do? We might try to levy a gigantic tax on the incomes of the billionaire winners and redistribute their winnings to everyone else. But even if politically feasible, the winners will be tempted to store their winnings abroad – or expatriate.

Suppose we look instead at the patents and trademarks by which government protects all these new inventions.

Such government protections determine what these inventions are worth. If patents lasted only three years instead of the current twenty, for example, What’sApp would be worth a small fraction of $19 billion – because after three years anybody could reproduce its messaging technology for free.  

Instead of shortening the patent period, how about giving every citizen a share of the profits from all patents and trademarks government protects? It would be a condition for receiving such protection.

Say, for example, 20 percent of all such profits were split equally among all citizens, starting the month they turn eighteen.

In effect, this would be a basic minimum income for everyone.

The sum would be enough to ensure everyone a minimally decent standard of living – including money to buy the technologies that would free them up from the necessity of working.

Anyone wishing to supplement their basic minimum could of course choose to work – even though, as noted, most jobs will pay modestly.

This outcome would also be good for the handful of billionaire executives and owner-investors, because it would ensure they have customers with enough money to buy their labor-saving gadgets.

Such a basic minimum would allow people to pursue whatever arts or avocations provide them with meaning, thereby enabling society to enjoy the fruits of such artistry or voluntary efforts.

We would thereby create the kind of society John Maynard Keynes predicted we’d achieve by 2028  – an age of technological abundance in which no one will need to work.

Happy Labor Day.

WHAT THE FED’S ABOUT TO DO WILL AFFECT YOUR JOB AND YOUR INCOME, AND HERE’S WHAT YOU CAN DO TO MAKE SURE THE FED MAKES THE RIGHT DECISION

#10 END MASS INCARCERATION NOW

Imprisoning a staggering number of our people is wrong. The way our nation does it is even worse. We must end mass incarceration, now.

If I’m walking down the street with a Black or Latino friend, my friend is way more likely to be stopped by the police, questioned, and even arrested. Even if we’re doing the exact same thing—he or she is more likely to be convicted and sent to jail.

Unless we recognize the racism and abuse of our criminal justice system and tackle the dehumanizing stereotypes that underlie it, our nation – and our economy – will never be as strong as it could be.

Please take a moment to watch the accompanying video, and please share it so others can understand what’s at stake for so many Americans.

Here are the facts:

Today, the United States has 5 percent of the world’s population, but has 25 percent of its prisoners, and we spend more than $80 billion each year on prisons.

The major culprit is the so-called War on Drugs. There were fewer than 200,000 Americans behind bars as recently as the mid-70’s. Then, a racially-tinged drug hysteria swept our nation, and we saw a wave of increasingly militant policing that targeted communities of color and poorer neighborhoods.

With “mandatory minimums” and “three strikes out” laws, the number of Americans behind bars soon ballooned to nearly 2.5 million today, despite widespread evidence that locking people up doesn’t make us safer.

Unconscious bias and cultural stereotypes lead to discriminatory enforcement of the laws – from who gets pulled over to where police conduct drug sweeps.

Even though Blacks, whites, and Latinos use drugs at similar rates, people with black and brown skin are more likely to be pulled over, searched, arrested, charged with a crime, convicted, and sent to jails and prisons where they can be subject to some of the worst human rights abuses.

As a result, black people incarcerated at a rate five times that of whites, and Latinos incarcerated at a rate double that of white Americans.

Even if you’ve “served your time,” you never escape the label.

A felony conviction can bar you from getting a student loan, putting a roof over your head, or even from voting. It might even disqualify you from getting a job which can make it impossible for people with felony convictions to pull themselves out of poverty. And many who end up in prison were living in chronic poverty to begin with.

All of this means a lot of potential human talent is going to waste. We’re spending a fortune locking people up who could fuel our economy and build strong communities, in some cases just to increase the profits of private prison corporations.

So what do we do?

First, enact smarter sentencing laws that end mandatory minimums and transform the way we treat people who enter the criminal justice system. Instead of prisons and jails, we need well-paying jobs, and to invest in proven and cost-effective alternatives to incarceration, like job training and mental health and drug treatment programs.

Second, stop the militarized policing and end discriminatory policing practices such as “stop and frisk” and “broken windows” that disproportionately target communities of color.

Third, stop building new jails, start closing some existing ones, and begin to invest in schools, public transit, and housing assistance or local jobs programs. States are spending more and more on prisons, while cutting funding for schools. That’s crazy.

Finally, “ban the box” – the box on job applications that asks whether you have ever been convicted of a felony on a job application. Already, dozens of states cities, and counties have passed bills requiring that employers consider what you can do in the future, not what you might have done in the past.

Instead of locking people up unjustly, and then locking them out of the economy for the rest of their lives, we need to stop wasting human talent and start opening doors of opportunity – to everyone.

It’s now possible to sell a new product to hundreds of millions of people without needing many, if any, workers to produce or distribute it.

At its prime in 1988, Kodak, the iconic American photography company, had 145,000 employees. In 2012, Kodak filed for bankruptcy.

The same year Kodak went under, Instagram, the world’s newest photo company, had 13 employees serving 30 million customers.

The ratio of producers to customers continues to plummet. When Facebook purchased “WhatsApp” (the messaging app) for $19 billion last year, WhatsApp had 55 employees serving 450 million customers.

A friend, operating from his home in Tucson, recently invented a machine that can find particles of certain elements in the air.

He’s already sold hundreds of these machines over the Internet to customers all over the world. He’s manufacturing them in his garage with a 3D printer.

So far, his entire business depends on just one person – himself.

New technologies aren’t just labor-replacing. They’re also knowledge-replacing.

The combination of advanced sensors, voice recognition, artificial intelligence, big data, text-mining, and pattern-recognition algorithms, is generating smart robots capable of quickly learning human actions, and even learning from one another.

If you think being a “professional” makes your job safe, think again.

The two sectors of the economy harboring the most professionals – health care and education – are under increasing pressure to cut costs. And expert machines are poised to take over.

We’re on the verge of a wave of mobile health apps for measuring everything from your cholesterol to your blood pressure, along with diagnostic software that tells you what it means and what to do about it.

In coming years, software apps will be doing many of the things physicians, nurses, and technicians now do (think ultrasound, CT scans, and electrocardiograms).

Meanwhile, the jobs of many teachers and university professors will disappear, replaced by online courses and interactive online textbooks.

Where will this end?

Imagine a small box – let’s call it an “iEverything” – capable of producing everything you could possibly desire, a modern day Aladdin’s lamp.

You simply tell it what you want, and – presto – the object of your desire arrives at your feet. 

The iEverything also does whatever you want. It gives you a massage, fetches you your slippers, does your laundry and folds and irons it.

The iEverything will be the best machine ever invented. 

The only problem is no one will be able to buy it. That’s because no one will have any means of earning money, since the iEverything will do it all.

This is obviously fanciful, but when more and more can be done by fewer and fewer people, the profits go to an ever-smaller circle of executives and owner-investors.

One of the young founders of WhatsApp, CEO Jan Koum, had a 45 percent equity stake in the company when Facebook purchased it, which yielded him $6.8 billion.

Cofounder Brian Acton got $3 billion for his 20 percent stake. 

Each of the early employees reportedly had a 1 percent stake, which presumably netted them $160 million each.

Meanwhile, the rest of us will be left providing the only things technology can’t provide  – person-to-person attention, human touch, and care. But these sorts of person-to-person jobs pay very little. 

That means most of us will have less and less money to buy the dazzling array of products and services spawned by blockbuster technologies – because those same technologies will be supplanting our jobs and driving down our pay.

We need a new economic model. 

The economic model that dominated most of the twentieth century was mass production by the many, for mass consumption by the many.

Workers were consumers; consumers were workers. As paychecks rose, people had more money to buy all the things they and others produced – like Kodak cameras. That resulted in more jobs and even higher pay.

That virtuous cycle is now falling apart. A future of almost unlimited production by a handful, for consumption by whoever can afford it, is a recipe for economic and social collapse. 

Our underlying problem won’t be the number of jobs. It will be – it already is – the allocation of income and wealth.

What to do? 

“Redistribution” has become a bad word.

But the economy toward which we’re hurtling – in which more and more is generated by fewer and fewer people who reap almost all the rewards, leaving the rest of us without enough purchasing power – can’t function. 

It may be that a redistribution of income and wealth from the rich owners of breakthrough technologies to the rest of us becomes the only means of making the future economy work.

Jobs are coming back, but pay isn’t. The median wage is still below where it was before the Great Recession. Last month, average pay actually fell. 

What’s going on? It used to be that as unemployment dropped, employers had to pay more to attract or keep the workers they needed. That’s what happened when I was labor secretary in the late 1990s.

It still could happen – but the unemployment rate would have to sink far lower than it is today, probably below 4 percent.

Yet there’s reason to believe the link between falling unemployment and rising wages has been severed.

For one thing, it’s easier than ever for American employers to get the workers they need at low cost by outsourcing jobs abroad rather than hiking wages at home. Outsourcing can now be done at the click of a computer keyboard.

Besides, many workers in developing nations now have access to both the education and the advanced technologies to be as productive as American workers. So CEOs ask, why pay more?

Meanwhile here at home, a whole new generation of smart technologies is taking over jobs that used to be done only by people.  Rather than pay higher wages, it’s cheaper for employers to install more robots.

Not even professional work is safe. The combination of advanced sensors, voice recognition, artificial intelligence, big data, text-mining, and pattern-recognition algorithms is even generating smart robots capable of quickly learning human actions.

In addition, millions of Americans who dropped out of the labor market in the Great Recession are still jobless. They’re not even counted as unemployment because they’ve stopped looking for work.

But they haven’t disappeared entirely. Employers know they can fill whatever job openings emerge with this “reserve army” of the hidden unemployed – again, without raising wages.

Add to this that today’s workers are less economically secure than workers have been since World War II. Nearly one out of every five is in a part-time job.

Insecure workers don’t demand higher wages when unemployment drops. They’re grateful simply to have a job.

To make things worse, a majority of Americans have no savings to draw upon if they lose their job. Two-thirds of all workers are living paycheck to paycheck. They won’t risk losing a job by asking for higher pay.

Insecurity is now baked into every aspect of the employment relationship. Workers can be fired for any reason, or no reason. And benefits are disappearing. The portion of workers with any pension connected to their job has fallen from over half in 1979 to under 35 percent in today.

Workers used to be represented by trade unions that utilized tight labor markets to bargain for higher pay. In the 1950s, more than a third of all private-sector workers belonged to a union. Today, though, fewer than 7 percent of private-sector workers are unionized.

None of these changes has been accidental. The growing use of outsourcing abroad and of labor-replacing technologies, the large reserve of hidden unemployed, the mounting economic insecurities, and the demise of labor unions have been actively pursued by corporations and encouraged by Wall Street. Payrolls are the single biggest cost of business. Lower payrolls mean higher profits.

The results have been touted as “efficient” because, at least in theory, they’ve allowed workers to be shifted to “higher and better uses.” But most haven’t been shifted. Instead, they’ve been shafted.

The human costs of this “efficiency” have been substantial. Ordinary workers have lost jobs and wages, and many communities have been abandoned.

Nor have the efficiency benefits been widely shared. As corporations have steadily weakened their workers’ bargaining power, the link between productivity and workers’ income has been severed.

Since 1979, the nation’s productivity has risen 65 percent, but workers’ median compensation has increased by just 8 percent. Almost all the gains from growth have gone to the top.

This is not a winning corporate strategy over the long term because higher returns ultimately depend on more sales, which requires a large and growing middle class with enough purchasing power to buy what can be produced.

But from the limited viewpoint of the CEO of a single large firm, or of an investment banker or fund manager on Wall Street, it’s worked out just fine – so far.

Low unemployment won’t lead to higher pay for most Americans because the key strategy of the nation’s large corporations and financial sector has been to prevent wages from rising.

And, if you hadn’t noticed, the big corporations and Wall Street are calling the shots.