The third reason is that many of the participants in the public debate were working professionals at a time when pessimism about the economic outcomes of typical workers was the empirically supported stance. [...] Average real wages began growing in the mid-1990s, but it wasn’t until the late 1990s that they recovered their 1970s- and 1980s-era losses.1 Finally, the economic trauma of the 2008 global financial crisis, Great Recession, and sluggish recovery that followed is a crucial driver of the current pessimism about the outcomes of typical workers. [...] In other words, had the expansion ended in 2014, real wages at the median would not have recovered despite five years of economic growth.2 Indeed, the severity of the downturn and the slow recovery not only help to explain pessimism about the state of American workers—they help to explain the rise of populist politics in both U. [...] But consider the following: If the government had seized 10 percent of the income of the top 10 percent over the years immediately following the financial crisis, threw it in a ditch, and set it on fire, then income inequality would have decreased—and the bad stretch endured by typical workers would have remained. [...] The fundamental economic and policy question is whether changes in the productivity of a demographic group affect the compensation of the same demographic group, not whether changes in aggregate productivity are related to changes in the compensation of a particular group of workers.
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