Media Roundup: Income Inequality Is The Biggest Story For The U.S. Economy

[JRLeft]

During Memorial Day weekend at a biker rally in Washington DC Donald Trump spoke to a group of supporters. “We’re going to give the right for those people to see a private doctor or even a public doctor and get themselves taken care of and we’re going to pay the bill,” he said. The message was tailored for the audience of veterans, but it touches on a common theme. Over the last few months I’ve seen my Twitter feed flooded with news stories about the increasing divide between people succeeding in the globalized economy and people who are just struggling to get by. A lot of this stuff is old news. A study looking at pay packages in 2014 by the consultancy Payscale Human Capital found that CVS CEO Larry Merlo earned 422 times the average wage paid to the company’s employees. Merlo took home more a compensation package worth more than $12 million while the average employee earned $28,000. Goodyear, Walt Disney, and Honeywell also topped Payscale’s list for most egregious gaps between CEO and worker pay. In past years, however, the wealth gap has seemed like a niche topic in the news cycle. In the 2016 election season it feels like income inequality has become the dominant issue. Over the last few weeks I’ve seen a number of fascinating stories.

On May 3 I tweeted this Washington Postwonkblog article on the ongoing struggles of young people in the US. In the article reporter Max Ehrenfreund explains that despite being better educated than the previous generation that started their careers in New York City in 2000, the current group of young people in the city is earning less, despite being better education. Ehenfeund explains, “For most young adults in the city, though, incomes have declined. A typical 25-year-old made $43,000 in New York in 2000, adjusting for inflation. In 2014, a 25-year-old in the city could expect to make about $37,000.” The percentage of young people working in low wage industries such as retail and hospitality increased from 23% to 33%. As of 2014 an astounding 45% of all 18 to 29-year-olds in New York City lived with their parents. “Wherever they live, young people are having a hard time getting a start on life in the modern American economy,” Ehrenfreund explains. 

"In the past few years, even as the United States has pulled itself partway out of the jobs hole created by the Great Recession, some economists and technologists have warned that the economy is near a tipping point. When they peer deeply into labor-market data, they see troubling signs, masked for now by a cyclical recovery. And when they look up from their spreadsheets, they see automation high and low—robots in the operating room and behind the fast-food counter.

In the article Thompson addresses the idea of Universal Basic Income, an interesting and controversial idea that has recently gained favor with a number of tech-industry billionaires. Universal Basic Income is the policy platform for a workless economy, a future in which robots and software generate wealth and through income transfer payments to citizens, governments can free people to pursue interests other than remunerated labor. The article, which is an interesting read, delves into territory that may seem like science fiction, but seems to be plausible based on current trends in the global economy. Thompson explains, “Technology creates some jobs too, but the creative half of creative destruction is easily overstated. Nine out of 10 workers today are in occupations that existed 100 years ago, and just 5% of the jobs generated between 1993 and 2013 came from ‘high tech’ sectors like computing, software, and telecommunications.”

http://www.forbes.com/sites/nathanielparishflannery/2016/05/31/media-roundup-income-inequality-is-the-biggest-story-for-the-us-economy/#49bb9fbb50c8