Tap here to turn on desktop notifications to get the news sent straight to you. Decrying a "deficit of opportunity," Obama called for an increase in the minimum wage, more investment in education, and a stronger social safety net.
Business Impact Technology and Inequality The disparity between the rich and everyone else is larger than ever in the United States and increasing in much of Europe.
October 21, Income inequality hinders economic opportunity and innovation. The signs of the gap—really, a chasm—between the poor and the super-rich are hard to miss in Silicon Valley. The homeless are the most visible signs of poverty in the region. But the numbers back up first impressions.
The poverty rate in Santa Clara County, the heart of Silicon Valley, is around 19 percent, according to calculations that factor in the high cost of living. The anger in Northern California and elsewhere in the United States springs from an increasingly obvious reality: Here, technology is arguably evolving faster than anywhere else in the world.
Does the region really portend a future, as Wadhwa would have it, in which a few very rich people leave the rest of us hopelessly behind? Yet it quickly rose to the top of best-seller lists this spring and remained on them for months. Economists have long warned that inflation-adjusted wages for low- and middle-income workers have been flat or declining since the late s in the United States, even as its economy has grown.
Piketty, a professor at the Paris School of Economics, greatly expands on this idea, documenting the exploding wealth of the very rich in the United States and Europe and comparing the trend with developments over the last few centuries. Building on research conducted with his colleagues Emmanuel Saez, a professor at the University of California, Berkeley, and Anthony Atkinson, an economist at the University of Oxford, Piketty collected and analyzed data, including tax records, to show just how extreme the disparity in wealth between the rich and the rest of the population has grown.
The story necessarily revolves around the United States, France, and several other European countries in which such historical data are available.
The gap between the wealthy and everyone else is largest in the United States.
The richest 1 percent of the population has 34 percent of the accumulated wealth; the top 0. Inthe richest 1 percent of the population had 34 percent of the accumulated wealth; the top 0. And the inequality has only gotten worse since the last recession ended: The top 10 percent now accounts for 48 percent of national income; the top 1 percent makes almost 20 percent and the top 0.
The disparity in the portion of income earned from work—what economists call labor income—is particularly striking. Why is this going on? But this is not all. In order to explain why rising inequality has been so strong at the very top in the U.
Privately held wealth in some European countries is now about to percent of annual national income, a level approaching that of the early s. What particularly worries Piketty is the long-term effect of this concentration of wealth. When the rate of return on capital exceeds the growth rate which he says is what happened until the beginning of the 20th century and is likely to happen again as growth slowsthen the money that rich people make from their wealth piles up while wages rise more slowly if at all.
The implications of this should be frightening for anyone who believes in a merit-based system.
It means we are in danger of entering into an era that, like the 19th century in France and England, is socially and politically dominated by those with vast amounts of inherited wealth. As Piketty points out, it is a radical departure from how we have thought about progress.Oct 03, · Tax Cuts, Sold as Fuel for Growth, Widen Gap Between Rich and Poor Image Arthur B.
Laffer made the case in the s that raising tax rates would reduce tax revenue by hampering growth. The gap between rich and poor is bigger than in any other advanced country, but most people are unconcerned. Whereas Europeans fret about the way the economic pie is divided, Americans want to.
How Income Inequality Affects Crime Rates Julia Trello The connection between income inequality and crime rate is a subject that has baffled many social scientists, economists, and even those in the legal and justice systems.
The gap between rich and poor has grown in more than three-quarters of rich countries since the mids, according to a study of income inequality and poverty by the Organization for Economic and Cooperative Development . Part of the reason for this huge gap between the rich and poor (scientifically known as the Gini coefficient) is due to governmental taxation tranceformingnlp.com Gini Coefficient is 0 for maximal equality (i.e.
everyone has exactly the same amount of money) and 1 for maximal inequality (i.e. one person has all the money). By the creation of ‘colonias populares’, self-built houses without legal titles, a huge social and economic gap between the people living in these houses and the corrupted people who took advantage of the economic system and became rich by exploiting the poor was inevitable.