Mares: Wealth Inequality
Pope Francis has condemned the trickle-down theory of improved well-being as a naive trust in the goodness of those wielding economic power.
French economist Thomas Piketty has authored a best-selling neo-Marxist grand theory of how wealth historically has grown faster than economic output.
Two MIT professors have sounded the alarm about a "Great De-coupling" between productivity and wage growth.
And New York Times columnist Thomas Friedman is among those concerned about a world economy where the middle class has been hollowed out and winners take all.
The Global Wage Report for 2012 to 13 by the UN’s International Labor Organization, confirms a world trend in which the workers' share of national income has decreased. Even in high productivity Germany, wages have been flat for 20 years.
This is partly due to globalization and technological innovation – both of which have reduced the need for workers in general, while increasing the demand for workers who are highly skilled. At the same time, as compared to other countries, the skills and educational preparation of American workers have declined.
The nature of work itself is changing to accommodate more part-time jobs, the new sharing economy with services like Uber, the app-based mode of transport, and Airbnb, that turns your home into a hotel.
This kind of transformation promises new efficiencies and greater flexibility for ‘employers’ and ‘employees’ alike, but it may also further imperil the shrinking middle-class.
Bernie would increase estate taxes to trim inter-generational shifts of money, and levy heavier taxes on the very rich. Mr. Piketty recommends a global tax on wealth.
In the U.S., either option would require a renewal of political will and a reversal of the infamous Citizens United Supreme Court decision, in which unlimited political contributions of the very rich are allowed under the guise of free speech.
Less political solutions might include more education to increase creativity, inter-personal skills and problem-solving ability; others might focus on apprenticeship programs as an alternative to college (and crippling college debt); and still others might invest in the nation's physical infrastructure.
Nobel-Prize winning economist Paul Krugman argues that simply raising the minimum wage would help stabilize our workforce – while many place their trust in science and technology.
But MIT professor Erik Brynjolfsson reminds us that technological advances alone can’t guarantee societal benefits, and concludes, "if we build economies and societies that exclude many people from the cycle of prosperity shame on us!"