The real failure of the American worker was failing to convert their wages into wealth when companies began to transition from defined benefit pensions to defined contribution retirement accounts in the early 80s. Americans spent and spent and spent, while their savings rates continued to plummet.

Also, you jumped on my first point of worker compensation, productivity, but you completely failed to address the second point: value-over-replacement. Let’s say I’m working for an employer and my productivity brings in 100 dollars of revenue-above-cost per hour. What should my compensation be? Somewhere close, but under 100 an hour? Let’s say…80 an hour? Maybe even 90?

It depends on the fungibility of my position. If 99.99% of the workforce could do my job as well as I did, then the employer is not going to pay me very much because it would be trivial to replace me with another worker. If only .01% of the workforce could do my job, it would be much harder to replace me and therefore it gives me more bargaining power to get a higher wage.

A lot of the jobs we see in the workforce are low value-over-replacement jobs. Anybody can be cashier, for example. Hell, they even have self-checkout lanes in grocery stores now. An employer essentially just needs a warm body to mind the register and deter customers from stealing.

Arguably it’s the most important job in the store (since point-of-sale is where retail corporations get 98%+ of their revenue), but because you could literally pull a person off the street to replace your current cashier, the current cashier has almost no bargaining power for higher wages, and they get paid accordingly.

“And again, there will be no one to purchase the goods and services of businesses if the middle class continues to disappear and more and more people become working poor. What happens to the economy then?”

Here’s a dirty little secret that nobody wants to admit: as the cost of “respectable” living rises and more and more people decide either not to have kids or to have smaller families, this problem solves itself as low-wealth households gradually age out of the population.