Tag Archives: Economic inequality

Are Computers Making Society More Unequal?


BOOK REVIEW

Average Is Over, Author: Tyler Cowen.

By Joshua Rothman – There are three main reasons inequality is here to stay, and will likely grow.

The first is just measurement of worker value. We’re doing a lot to measure what workers are contributing to businesses, and, when you do that, very often you end up paying some people less and other people more.

The second is automation—especially in terms of smart software. Today’s workplaces are often more complicated than, say, a factory for General Motors was in 1962. They require higher skills. People who have those skills are very often doing extremely well, but a lot of people don’t have them, and that increases inequality.

And the third point is globalization. There’s a lot more unskilled labor in the world, and that creates downward pressure on unskilled labor in the United States.

On the global level, inequality is down dramatically—we shouldn’t forget that. But within each country, or almost every country, inequality is up. more> http://tinyurl.com/p2p769q

New Census Figures on Income Inequality Bode Poorly for Social Mobility


By Elisabeth Jacobs – One reason growing economic inequality over the last several decades might be troubling for the promise of greater social mobility is the increasingly tight correlation between income and education. Economists generally agree that rising returns to skill are a major factor driving the run-up in inequality.

As the demand for skilled workers has outpaced the supply, wages for the most-educated Americans have risen sharply relative to those with less education. As a result, better-educated parents have relatively more income available for investing in their children’s acquisition of human capital as compared to parents with less education.

Moreover, highly-educated parents are able to transmit social and cultural capital to their children, which in turn impacts the next generation’s ability to climb the economic ladder. more> http://tinyurl.com/mlsbayr

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The Capitalist’s Case for a $15 Minimum Wage


By Nick Hanauer – The fundamental law of capitalism is that if workers have no money, businesses have no customers. That’s why the extreme, and widening, wealth gap in our economy presents not just a moral challenge, but an economic one, too. In a capitalist system, rising inequality creates a death spiral of falling demand that ultimately takes everyone down.

An economy such as ours that increasingly concentrates wealth in the top 1 percent, and where most workers must rely on stagnant or falling wages, isn’t a place to build much of a pillow business, or any other business for that matter. more> http://tinyurl.com/kuem9dk

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Inequality’s pernicious twin is our growing cultural divide


By Don Peck – I enjoyed reading Reuters’ textured survey of the nature of inequality in America, and how government shapes it, shrinking the gaps between us through some of its actions and widening them through others. One comes away from the series with an appreciation for the complex blend of factors — federal policy, technology, unevenness of educational opportunity, the evolution of the market — that has helped propel some of us to where we are today, while failing to lift others. more> http://tinyurl.com/cvcfvge

The biggest driver of income inequality: capital gains


By Suzy Khimm – A new report (pdf) from the Congressional Research Service — the nonpartisan public policy branch of Congress — takes a closer look at the drivers of income inequality between 1996 and 2006, the last period of moderate economic growth before the latest boom-bust cycle.

Changes in income from capital gains and dividends were the single largest contributor to rising income inequality between 1996 and 2006. Changes in tax policy also made a significant contribution to the increase in income inequality. more> http://is.gd/j2YuPz