https://www.nytimes.com/2017/11/17/upshot/income-inequality-united-states.html?rref=collection%2Fsectioncollection%2Fbusiness-economy&action=click&contentCollection=economy®ion=stream&module=stream_unit&version=latest&contentPlacement=5&pgtype=sectionfront
I found this article on the NY times website. It explains why the 1% has an increasing total income share in the U.S and in other countries. They go through some of the misconceptions such as the relation to information technology, unions and immigration. All of which have little negative effect on the 1%.
Most top earners in the United States are neither executives nor even managers. People in those occupations make up just over one-third of all top earners in the United States. This share has been falling, particularly for corporate executives — and is lower than in many other advanced countries. In Denmark, Canada and Finland, close to half of top earners are in managerial occupations, according to my analysis of data from the Luxembourg Income Study.
Almost all of the growth in top American earners has come from just three economic sectors: professional services, finance and insurance, and health care, groups that tend to benefit from regulatory barriers that shelter them from competition. The groups that have contributed the most people to the 1 percent since 1980 are: physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives. Without changes in these largely domestic services industries — finance, health care, the law — the United States would look like Canada or Germany in terms of its top income shares. The United States also stands out in terms of how much money its elite professionals earn relative to the median worker. Workers at the 90th percentile of the income distribution for professionals make 3.5 times the earnings of the typical (median) worker in all occupations in the United States. Only Mexico and Israel, which have very high inequality, compensate professionals so disproportionately. In Switzerland, the Netherlands, Finland and Denmark, the ratio is about 2 to 1.
Although most of the 1% are people making money privately, it could be beneficial for our economy. Some of these people are using their private gains to create jobs for the less fortunate. However, as you mentioned, the U.S. is falling behind some important countries (some borders). Managerial growth is very important, especially in a country as large as ours. How do you think we can fix this potential issue?
ReplyDeleteA recent CNBC article cited a report by three professors showing that people should compare their income with others in their age group to see the differential with the "top one percent." So for 25 year olds they claim the income level cutoff for those below the top one percent is $160,000 a year but 50 year olds would have to make an income as high as $470,000 a year.
ReplyDeletehttps://www.cnbc.com/2017/11/06/how-much-you-need-to-earn-to-be-in-the-top-1-percent-at-every-age.html
The wealth will not be evenly distributed, at least entirely, but it cannot be helped much either. I hope the tax cuts boost the economy and the ones not in the top 1% get more comfortable. However other costs such as medicare is rising. I am looking at how the US government is going to regulate these expenses.
ReplyDeleteInteresting fact; the 1 percent threshold for net worth from the Fed's data was nearly $8.4 million. That is 69 times the average household's net holdings, which is $121,000.
ReplyDelete