Producing the same with less resources, increases productivity and overtime total wealth.
and reduced real wages and benefits forced on the remaining workers
If Kelly is talking in general terms (rather than perhaps some specific situation with a company that Bain was involved in), then he's wrong. Total compensation has increased.
As for inequality.
Reversal of the Trend: Income Inequality Now Lower than It Was under Clinton
taxfoundation.org
Income inequality myths: No, the rich didn’t steal all the money
blog.american.com
1979-2007: Rich Got Richer, Poor Got Richer
WASHINGTON – "Today, the Employment Policies Institute (EPI) announced the publication of new research by economists Dr. Richard V. Burkhauser of Cornell University, Dr. Jeff Larrimore of the Joint Committee on Taxation and Dr. Kosali Simon of Indiana University, the results of which appear in the most recent issue of the Journal of Policy Analysis and Management (link fixed).
In his recent speech on deficit reduction, President Obama defended his support of higher taxes on wealthy Americans by echoing a widely-held view that the rich are getting richer while the poor and middle class are falling behind. But Burkhauser et al. find that this popular notion is mistaken; in reality, growth in after-tax household income has been substantial across the entire income distribution over the last thirty years (see table above).
“By leaving out additional sources of income – like fringe benefits or employer-provided health insurance – past studies have dramatically understated American households’ access to after-tax resources.” said Dr. Burkhauser. “What we found is that the rich did get richer over the last 30 years, but so did the middle class, the working class and the poorest.”
By taking into account previously unmeasured shifts in household size and the tax units in them, the taxes and transfers of government, and the increasing importance of fringe benefits, the research shows a picture of growth that spans all income groups.
Burkhauser continued: “For instance, the conventional wisdom holds that the poorest households saw their income shrink by a third over the last three decades. But accounting for income transfers and the value of fringe benefits, this research shows that the bottom 20 percent of households actually experienced after-tax income growth of more than 26 percent.”
Burkhauser concluded: “This isn’t a zero sum game, where one group wins at the expense of others. The growth in productivity of Americans in the top twenty percent of tax units increased the size of the economic pie sufficiently to register major gains across the entire distribution of after-tax income.”
mjperry.blogspot.com
Increasing inequality in the distribution of earnings has become one of those stylized facts that everyone “knows.” The nightly news reminds viewers that ordinary workers have not fared well in the labor market over the last 25 years, while corporate executives have. Many professional economists and a recent CBO report have supported this view as well. While it is true that the cash explicitly paid to employees has become more unequal over the last generation, the…more benign explanation for the change in cash compensation over a generation is the dramatic increase in health insurance costs. …inequality in total compensation has not increased because the fixed costs of health insurance are a much larger percentage of the total compensation of lower-earnings workers. Burkhauser and Simon explore this explanation. They add the value of employer-provided health insurance as well as Medicaid and Medicare to the pre-tax, post-cash-transfer household income data and find that the bottom three income deciles actually exhibit higher growth than the top seven deciles from 1995 to 2008. …Warshawsky makes a similar discovery. Using unpublished BLS total compensation data, including employer health insurance expenditures, from 1999 to 2006, he finds that the growth in compensation by earnings decile (from the 30th to the 99th) averages 35 percent, with 41 percent growth at the 30th percentile (workers earning $10–$14 an hour) and only 35.8 percent growth at the 99th percentile (workers earning $59–$80 an hour).
cato.org
Translating all this into simple English, it turns out that the rich are getting richer slower than the rest of us are getting richer.
danieljmitchell.wordpress.com
Adjusting for inflation, the Census Bureau measure of median household income increased by 10% between 1973-2008. This is a broader and in my view better measure of income than BLS wages.
Contrary to popular perception, aggregate hours worked per adult are no higher than in 1973. Furthermore, this comparison does not take into account changing demographics. Compared to 1973, America has taken in millions of unskilled Hispanic workers, who earn less and depress the median. If we look at non-Hispanic white households, real median income increased by 15%. For African Americans, real median household income increased by 22%.
super-economy.blogspot.com
...If we really want to know what happened to the poor of 1979, we need to be able to track specific households through time. Fortunately, we can. According to researchers at the University of Michigan, households in the bottom fifth in 1975 earned an average of almost $28,000 more per year by 1991, adjusted for inflation. According to U.S. Treasury data, a whopping 86 percent of households in the bottom fifth in 1979 had climbed out of poverty by 1988... (And that's not considering that households have gotten smaller - Tim)
philly.com
"...Incomes for the poorest one-fifth of all earners have grown on average 3.9% a year since 1994. Meanwhile, those in the middle three-fifths of incomes — broadly speaking, the middle class — have grown by 3.4% to 3.6% a year..."
ibdeditorials.com
"...After one year, about one-third of workers in the bottom income quintile move to a higher one; about one-quarter of those in the top quintile move to a lower one.
Only 29 percent of workers remain in the same income quintile after 15 years.
On average, individuals can expect to move from the 20 th percentile of the earnings distribution at the beginning of their career to about the 60 th percentile during their peak earning years.
Less than one third (31 percent) of children are in the same income quintile as their parents..."
taxesandgrowth.ncpa.org
Are the poor getting poorer?
youtube.com
(3:27)
1 - Income indeed is inequal, but it hasn't been getting more unequal recently (and by recently I'm not just talking about since Obama became president). Consumption is less unequal. Total wealth is more unequal than income or consumption, but its become less unequal both recently (since the recession started), since the 80s, since the 50s, and over the last century.
blog.american.com
2 - Income inequality doesn't matter much because
A - It isn't a negative thing. Poverty is a negative thing. Rich people getting richer is not.
B - Over time the non-rich have also gotten richer.
C - It is exaggerated by those who make it an issue. They look at say household wages, without considering that wages aren't the only income, and that households have gotten smaller, and while ignoring that patterns in consumption and wealth inequality (see #1 above), because it doesn't support their story, except perhaps for cherry picked years.
D - Because of income mobility. Whether or not there is “growing evidence of less intergenerational economic mobility in the United States than in many other rich industrialized countries”, there still is a lot if intergenerational economic mobility, and also intragenerational economic mobility (the same person has changing, often increasing, income and wealth over time).
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