By Jared Bernstein
Economic Policy Institute

As Labor Day once again dawns on America, we are faced with old problems and new solutions.

As any economic cheerleader from Wall Street or Washington will tell you, we've been posting some impressive economic statistics, the most important of which is faster productivity growth.

These same boosters will stress that faster growth of output per hour is the main channel through which we achieve higher living standards.

But over the past few years, that channel has been blocked, and economic growth is failing to reach many, if not most, working families. Real wages for most workers, after rising for the first few years of the 2000s, have fallen lately, and despite 14 percent higher productivity, a typical worker's real weekly earnings are down 3 percent over this expansion. Median family income is down about $1,500 since 2000, and more than 5 million people have been added to the poverty rolls.

In other words, the economy looks fine until you take a closer look at the people in it. And while it continues to bewilder those who focus exclusively on these top-line statistics, majorities consistently report dissatisfaction with the economy.

But it should be no mystery. Many families, stretching to meet their budgets with squeezed paychecks after filling up their gas tanks, must be wondering: With recoveries like this, who needs recessions?

So where's the growth going? Again, no mystery: Profits, as a share of GDP, are the highest they've ever been.

Like I said, it's an old story. But this Labor Day, the story doesn't stop here.

Today, there is a palpable sense among the public that our leaders are not up to the challenges they face. This is most clear in the foreign policy arena, but you see it on the economy as well. A recent New York Times/CBS poll revealed that for the first time since they started asking the question in the early 1980s, fewer than half of the adults surveyed expect their children's living standards to surpass their own.

Stop and ponder this for a second. America's workers are working harder and smarter than ever before, and we've got the productivity numbers to prove it. But we're growing more pessimistic about our kids' future.
Something is awfully wrong with this picture, and I believe the YOYOs are at the root of it.

YOYO is the acronym for "You're On Your Own," the philosophy that drives much of today's politics and policy. It's the idea that the best way to solve the economic challenges we face, from Social Security to health care to globalization and inequality, is a tax cut, a private account and a pat - if not a shove - on the back as individuals are pushed to fend for themselves in the private market, supposedly tapping the power of competitive forces to deal with these daunting forces.

What's lost amid all this rampant, hyper-individualism is the sense of WITT ("We're In This Together"), the notion that there are problems - like those just cited - that are too large for individuals to face down on their own. Each of these challenges is much more effectively addressed by pooling risk, not shifting it to individuals.

Conservatives have been pummeling progressives on these issues for decades, arguing with tremendous conviction - but without convincing evidence - that any steps toward the WITT agenda will kill the golden goose of growth. Whether it's universal health care, a higher minimum wage, greater union power, or a pause in trade agreements while we build the policy structure to offset the downsides of globalization, the YOYOs have only one message: "Sounds nice, but sorry…can't go there."

This Labor Day, their arguments ring especially hollow. The gap between productivity and working-family incomes is too large to ignore, and politicians do so at their peril. Be prepared to hear a lot more about these problems as coming election cycles gear up.

Which leaves us with the critical question: What, precisely, will those who want our support propose to do to close the gap? You'll recognize the Your On Your Owns easily enough: They bemoan the problem, and their solutions will be a) patience, b) privatization, c) tax cuts for investors, and d) more education (the opportunities are there; you're just not smart enough to take advantage of them).

The We're In This Togethers will support the education agenda, because it's critical for equalizing opportunity. But they won't stop there. They'll recognize that the time has come to construct the architecture needed to start actively shaping economic outcomes, not passively accepting them. They will speak of universal health care (listen for "Medicare for All") and replacing the labor demand sapped by globalization by actively creating more quality job opportunities through full employment initiatives and investment in public infrastructure, including energy independence.

They will support a rational fiscal policy that stresses a measured role for government, not one based on starving the public sector of the revenues it needs to do its job.

There lies the continuum on which we should judge those who seek our support. At one end lies YOYO'ism. Been there, done that, and the pendulum has already begun its swing. The question is how far toward the other end - toward the WITT agenda - will it swing.

That, ultimately, is up to us.

(The author is senior economist at the labor-backed Economic Policy Institute is the author of All Together Now: Common Sense for a Fair Economy, published by Berrett-Koehler and available from The Union Shop Online).