America has traditionally thought of itself as a
middle-class nation. This claim clashes with data, though. Since the early
1980s, income inequality has been rising and median household income is lower
now than it was in 1999. The lack of middle-class wage growth has originated
from many factors including foreign competition, technological changes that
favor highly skilled workers, and the existence of persistent poverty. A
majority of the competition for American manufacturing has come from China,
causing a stifling of American middle-class wages. This may come to an end,
though. Higher wages in China and other competitive nations are now limiting
the advantage of those economies. In addition, as China nears technological maturity,
it is likely to spread innovations to consumers, creating a net gain for people
in the United States. Income inequality may also be able to reverse itself due
to evolving social norms of religions and social movements with strong moral
codes. The author stated that when inequality trends begin to reverse
themselves, it will be because those processes are operating largely outside of
politics. Technology, trade, and even religion may restore the prosperity to
the middle class.
Hope that's true. If so, I wonder if it may take a while for it to happen. It's hard to imagine an even wealth distribution because of people's tendency to be greedy and hoard things. I wonder how higher wages in China will impact businesses here, considering many US companies make a lot more profit by outsourcing cheap labor to countries like China.
ReplyDeleteIt is nice to see some news that there is hope for America's middle class. It has always been a hot debate topic in the presidential elections, but I have never seen policies really make a positive difference. Perhaps it was just time that, in the end, will benefit our middle class the most.
ReplyDeleteThis is an interesting article and news a lot of people recently have wanted to hear going forward. The middle class has taken quite a hit as the article states with the advancement of technology and outsourcing of various jobs for cheaper labor. However, I wonder if policies and changes like this are sustainable or not in the long run. It really seems that lower skilled jobs are not a promising future and the only way to ensure a promising career is through education. While this brings on its own challenges as well, I think it is a more sustainable option.
ReplyDeleteIt will be interesting to see how presidential candidates respond and wether or not it will have an impact on future votes. On the democratic side, Hilary is currently winning the states with the highest income inequality while Bernie is winning the states with the lowest. This issue clearly plays an important role in politics and will continue to do so in the coming years.
ReplyDeleteIt is interesting to think about just how much our economy can be affected by economic changes in other countries. With China's wages increasing, United States based firms will no longer find manufacturing in China as attractive. Hopefully manufacturing jobs will come back to the U.S., opening more opportunities for lower class individuals to move up into the middle class.
ReplyDelete