The Economic Landscape

The State of Working America (SWA) focuses most of its attention on economic outcomes—wages, incomes, employment, and other indicators of economic security. But implicit in such an analysis is also the story of how the economic landscape  has changed through the years for America’s workers. Unlike natural landscapes, the economy can change its overall surroundings rapidly and in direct response to political and social policy.

A core finding from the State of Working America is the U.S. economy’s failure in recent decades to increase the living standards of typical American workers at a pace matching the country’s overalleconomic growth. But this wasn’t always the case, as is clear when contrasting the past three decades with the quarter century following World War II—an era that saw very different economic outcomes.

The following feature provides just such a picture, illustrating some of the major institutional and structural features of the economy and documenting how they have changed (or not) over time.

There are some stand-out trends characterizing the past three decades:

  • The American workforce is larger, more diverse, and better educated than ever before, and continues to expand on each of these fronts.
  • Productivity, or how much income can be generated in an average hour of work, has risen consistently over time, but the last 30 years (and especially the 1980s and first half of the 1990s) saw productivity growth rates far lower than those in the first quarter century after World War II.
  • Public investment has fallen as a share of the overall economy, while tax rates across income groups have converged.
  • Policy makers have generally made policy choices that allow for a higher rate of unemployment in recent decades compared to the period after World War II, often failing to get unemployment down far enough to achieve full employment levels in the labor market.
  • Labor market institutions (unions and minimum wages) explicitly designed to boost bargaining power for rank-and-file workers have seen their effectiveness eroded.
  • The share of the overall economy accounted for by the finance sector has risen quickly in the past 30 years, while the steady decline in manufacturing’s share of the overall economy accelerated rapidly in the same period.

This feature concludes with a quick reminder of some of the key outcomes we have seen over the past three decades—economic growth that is slower, less-equitably distributed, and which has not translated into steady improvement by many measures of broad economic security. In short, it does not seem that the vast changes to the economic landscape have been accompanied by better economic performance for low- and middle-income Americans.

Get the data behind the charts.

Explore Our Charts



Select a subject or demographic

Interactive feature

Interactive feature promo image When income grows, who gains?

For the media

Economic Policy Institute Media Relations Department (202) 775–8810 |