perienced previously unknown peacetime growth rates, which most
economists consider to be unsustainable.
Just because the purchasing power of the average income is de-
creasing doesn’t mean that you are required to participate in this
trend. In the next chapter you will learn the importance of the
globalization of the world economy. Later chapters explain skills
you can learn and steps you can take to ensure that your income
does not follow this decreasing trend.
The decline of incomes in America is rarely discussed publicly.
Politicians don’t address it lest they be asked for a solution. Corpo-
rate leaders don’t address this topic because lower wages increase
their bottom line. Labor leaders, usually the champions of in-
creased income for all workers, don’t address the decline in income
lest their powerlessness to prevent it in the first place becomes evi-
dent. Income decline, although experienced by many, is discussed
by almost no one.
One clear response to the wage decline has been a larger per-20 The Old Methods No Longer Work in Today’s Economy
1959196119631965196719691971197319751977197919811983198519871989199119931995199719992001240250260270280290300310320YearPurchasingPowerofWages(in$)FIGURE 2.1 Average American Wages, Adjusted for Inflation
Source:Council of Economic Advisors, Report to the President 1993, 1996,
and 1998 (Washington, DC: U.S. Government Printing Office, various
dates).