ABSTRACT
The three issues that were the focus of Dan Fusfeld’s 1968 essay-the economic and social erosion of inner city neighborhoods, the persistence of poverty, and the intractability of racial discrimination-are sadly as relevant today as ever. Indeed, the problems that Dan Fusfeld grappled with in a series of papers and seminars more than a quarter of a century ago have grown even more intractable over time. In retrospect, we know that wage and income inequality were actually reaching historic lows in the late 1960s. Since then both have increased dramatically, driving an ever larger wedge between the living standards of the ‘haves’ and the ‘have nots’, particularly in urban America. In the 1950s and 1960s, a rising tide seemed to be lifting most boats. The income growth of families in the bottom quintile of the income distribution actually rose a bit faster than the incomes of everyone else, including those in the top fifth. Since the late 1970s, rising GDP has not translated into higher incomes for those in the bottom 40 percent of the income distribution. Benefits from rising productivity and GDP growth have gone disproportionately to the top 20 percent. In the face of declining real wages, some among the remaining 80 percent of households have maintained their living standards only by increasing their households’ hours of work (through additional members entering the workforce and/or through additional hours of those already at work). Households that do not increase their work effort to compensate for declining real wages continue to fall further and further behind (Mishel and Bernstein 1994).
