The encampments at Kanawha Plaza have been cleared, and Occupy Richmond protesters have been forced to regroup and consider next steps after two weeks of round-the-clock occupation of the downtown plaza came to an abrupt end Monday morning.
But regrouping doesn't mean going away. Occupy Richmond isn't likely to go away, because the core concerns underlying the movement aren't going away.
The underlying concern of the Occupy movement, locally and nationally, is this: The American economy has not been working well for working people over the past generation.
This fact can be measured a number of ways. Wages, which in the postwar generation tended to increase in lock-step with increases in productivity, have been decoupled from productivity since the 1970s. Every year, American workers get more productive, but that productivity has not translated into corresponding increases in paychecks for most workers. Between 1973 and 2006, median hourly compensation grew at less than one-half the rate of productivity growth.
For a time, American households responded to this trend by increasing working hours, particularly women's working hours. The increased working hours allowed family incomes to rise even as wages stagnated.
But increased work is no longer an option for most households. Starting in the 1990s, instead of fueling consumption out of steadily growing paychecks, middle- and working-class Americans resorted to taking on higher levels of debt — credit cards, refinanced mortgages, payday loans — to keep up spending.
At the same time, rewards at the top end of the economy have grown to an extraordinary degree, especially in the financial sector. Close studies of the incomes of the "top 1 percent" show that much of the growth in the incomes of the very rich is a result of dramatically increased compensation for corporate executives, as well as high earnings in the financial industry.
The result has been dramatically higher levels of income inequality as well as entrenched wealth inequality. That might be fine if the corporate leaders were being rewarded for doing an outstanding job creating useful products and employing Americans at good wages, or if the financial sector was efficiently allocating capital to the productive economy.
The real story is different. Executive compensation packages tying CEO salaries to short-term stock prices gave corporate leaders an incentive to cut labor costs and fatten their own wallets, often at the expense of the long-term productive viability of their firms.
Scholars have coined the phrase "pay without performance" to describe the widespread phenomenon of CEOs guaranteed extraordinary compensation packages even if their firms stagnate or fail. A 2010 study of executive compensation showed that executives who laid off the most workers during the 2008-09 downturn were on average significantly better paid than their peers. That is exactly the wrong kind of incentive structure from the point of view of the American middle and working class.
Likewise, the shenanigans of the financial industry in the 2000s — placing large bets on complex financial products whose risks they did not understand — led directly to the financial crisis of 2008 and the need for a federal bailout to keep the system afloat. The popular indignation at the federal bailout disguises the larger key point, which is that the purpose of the financial sector should be to allocate capital into productive uses that bolster the long-term prosperity of the nation, not to engage in speculation whose benefits flow largely to the financiers themselves.
The federal government picked up the tab for Wall Street's bad bets. But while the bailout and Obama stimulus package did stabilize the situation and prevent a probable depression, those efforts did not bail out ordinary households, who continue to struggle with stagnant wages and high unemployment. Nor did the government intervention result in a needed restructuring of Wall Street to restore gutted regulations, break up "too big to fail" financial giants, and get the banks back in the business of lending and supporting the real economy rather than seeking profits through fancy forms of speculation.
High inequality, a stagnant economy, and a lack of fundamental accountability are a toxic combination. That's why there are protests in the streets of New York and cities across the nation as well as abroad. In a sense, Richmond should be proud to have its own protest movement — it shows that we are in some sense a proper "tier one" city!
As to the Occupy Richmonders themselves, I hope that they can keep in mind that the occupation of Kanawha Plaza was never an end in itself but a way to dramatize and publicize an important set of issues. That work can and should continue, in new forms. If Richmond's version of the Occupy movement can spark a season of citizen education and engagement focused on the need for a fairer and better functioning economy and democracy, October's protests will have been an enduring success.