not by those at the bottom of the inverted pyramid of income, but of policies of governments.
In this Opinionator blog piece from the New York Times, the Nobel economic laureate takes us through the numbers.
He is exploring the work of World Bank economist Branko Milanovic and others, and starts with the development of the industrial revolution to provide historical context.
Consider this paragraph, focusing on the work of Milanovic:
From 1988 to 2008, Mr. Milanovic found, people in the world’s top 1 percent saw their incomes increase by 60 percent, while those in the bottom 5 percent had no change in their income. And while median incomes have greatly improved in recent decades, there are still enormous imbalances: 8 percent of humanity takes home 50 percent of global income; the top 1 percent alone takes home 15 percent. Income gains have been greatest among the global elite — financial and corporate executives in rich countries — and the great “emerging middle classes” of China, India, Indonesia and Brazil. Who lost out? Africans, some Latin Americans, and people in post-Communist Eastern Europe and the former Soviet Union, Mr. Milanovic found.Please keep reading.
The pattern is world-wide, but especially and increasingly acute in the United States.
It is worth noting, as Stiglitz does, that increasing inequality is not foreordained - in recent years,
countries like Chile, Mexico, Greece, Turkey and Hungary managed to reduce (in some cases very high) income inequality significantly, suggesting that inequality is a product of political and not merely macroeconomic forces. It is not true that inequality is an inevitable byproduct of globalization, the free movement of labor, capital, goods and services, and technological change that favors better-skilled and better-educated employees.note carefully, that inequality is a product of political and not merely macroeconomic forces.
It does not have to be this way.
Unfortunately, in the US it is increasingly so. As Stiglitz notes:
The gross domestic product of the United States has more than quadrupled in the last 40 years and nearly doubled in the last 25, but as is now well known, the benefits have gone to the top — and increasingly to the very, very top.I am already pushing the limits of fair use.
Last year, the top 1 percent of Americans took home 22 percent of the nation’s income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent. Recently released census figures show that median income in America hasn’t budged in almost a quarter-century.
This is an important posting.
It is well worth reading, especially for the final paragraph.
What I want to know is this: when will we in the United States honestly address the issue of inequality, of how it is getting worse?
When will we have a political party that is willing to take it on, to recognize that our tax policies make it even worse?
Or are we willing to continue a pattern that destroys democracy, and which will also ultimately undermine the very production of wealth that is so benefiting the already wealthy? Or are they too blind to see that they are eating their own seed corn?
Read the Stiglitz.
Then perhaps offer your thoughts on the thread?