The poor see their chances of social and economic mobility eroding; they have become second, or even third choice. The new elite of wealth formation is exclusive, locking out capital poor new comers. Income inequality is growing faster than equality and collective efforts to break the cycle of poverty by education and social mobility. Disparity from an inheritance of wealth is the winner in the not-so-level playing field.
With upcoming masses, more or less, locked out, or condemned to playing second fiddle, the outlook for balanced tranquility on the world stage is also eroding. Frustration, shame, and desperation lead to […]
View Original: Poverty’s frustration
Author Margaret Atwood is pictured in a Toronto hotel room on Tuesday March 6, 2012. (THE CANADIAN PRESS/Chris Young) Author Margaret Atwood has recently come out against an eight-storey condo development in her Toronto neighbourhood on the grounds that it will lead to noise, less privacy, and fewer trees. Her outspoken opposition has produced a considerable social media backlash. Rightly so.
It requires a healthy dose of cognitive dissonance to lament the state of income inequality in the country, as the author of The Handmaid’s Tale does frequently, and then champion housing policies that exacerbate it. But that’s the core […]
View Original: ‘Snob’ zoning rules only help the rich
India, where 50% of the wealth is controlled by the richest 1%, is on the podium with the largest startup economies in the world. But is the Indian entrepreneurial boom making things better or worse for the 99%?
Entrepreneurship has risen organically among Indians as a profitable and meaningful alternative to the traditional grind. Frequently touted by the government as part of the solution that is lowering poverty rates across the country there are government initiatives for incubating, planning and executing business plans, as well as providing tax exemptions for rising startups—and even exit plans for failed ones.
Nurturing new businesses […]
View Original: Is entrepreneurship driving India’s economic inequality even higher?
We approach Labor Day at a fraught moment in the American experiment.
Although the economy has finally made up all the jobs lost from the Great Recession, and those that would have been created had it not happened, few are celebrating. Inequality is worse. Entire vocations and professions have become obsolete. Most wages are rising slowly if at all.
This is especially true of the persistent gap between whites and most minorities, especially blacks. An extensive new study indicates that it has worsened since the turn of the century, cuts across all skill and education levels, and has hardened into severe […]
View Original: Racial gap in incomes has solidified, study finds
Colleges aren’t doing nearly as much to expand economic opportunity as most people think. How can the U.S. solve the problem of lasting poverty? For some, the answer starts with education. Many studies show that young people who go to college earn more than their non-college peers and that teenagers from poor families that attend selective schools especially benefit. While the country’s neighborhoods may be stratified, and its boardrooms may be biased, at least the nation’s best universities can help students from poor families become thriving workers.
Kind of. In a fascinating new paper published this summer, five economists, Raj […]
View Original: The Myth of American Universities as Inequality-Fighters
A new analysis takes the focus off the top 1 percent and ignores deeper structural problems. It’s fun to pick on the professional class. Obsessed with their credentials and careers, helicopter-parenting their children until they’re admitted into the “best” colleges, professionals make easy targets. Even the professional class likes to eye-roll at its own pretensions.
But does the professional class constitute a distinct economic and political problem?
Richard Reeves, the co-director of the Center on Children and Families at the Brookings Institution, gives a strong affirmative answer in his new book Dream Hoarders . Indeed, he argues professionals are the central […]
View Original: Well-off “helicopter” parents are super annoying, but they didn’t create economic inequality
Unbalanced. shutterstock.com Every three years, all Nobel Prize winners in economics are invited to gather in the tranquil setting of the German island of Lindau to meet a selection of bright young economists and discuss the state of their profession. But this year such tranquility was challenged by worrying political developments across the globe. Perhaps unexpectedly, one of the central themes of the meeting became what to do about inequality.
While not all laureates would go as far as Jean Tirole, the 2014 Nobel Prize winner, who said that economic inequality itself is a form of “market failure”, it is […]
View Original: How Inequality Became the Big Issue Troubling the World’s Top Economists
Dioikitopoulos, Evangelos and Turnovsky, Stephen and Wendner, Ronald (2017): Dynamic Status Effects, Savings, and Income Inequality. Abstract
This paper advances the hypothesis that the intensity of status preferences depends negatively on the average wealth of society (endogenous dynamic status effect), in accordance with empirical evidence. Our theory replicates the contradictory historical facts of an increasing saving rate along with declining returns to capital over time. By affecting the dynamics of the saving rate, the dynamic status effect raises inequality, thereby providing a behavioural mechanism for the observed diverse dynamics of income inequality across countries. In countries in which the […]
View Original: Dynamic Status Effects, Savings, and Income Inequality
Denis Healey never actually said he intended to squeeze the rich until the pips squeaked. The man who would soon be Labour chancellor was referring solely to property speculators when he made the remark during the February 1974 election campaign.
But the rich knew full well that Healey was coming for them, too. At the previous year’s Labour party conference, he said: “We shall increase income tax on the better off so that we can help the hundreds of thousands of families now tangled helplessly in the poverty trap, by raising the tax threshold and introducing reduced rates of tax […]
View Original: Should the rich be taxed more? A new paper shows unequivocally yes
The legacy of American racism is dominating the headlines again. One of the arguments used against the removal or relocation of Confederate symbols is that “it is simply part of our history”. This is not the case. The results of the enslavement, disenfranchisement and exclusion of black Americans remain visible and vivid in 21st century America.
Take the economic gap between black and white Americans, which is stark and stubborn. Black median household income was $36,898 in 2015, compared to $62,950 for whites . The gap has actually widened slightly since 2002 (from $23,500 to $26,000).
The black-white income gap obviously […]
View Original: The century gap: Low economic mobility for black men, 150 years after the Civil War