Over As emphasized in the film Inequality

Over the past
few decades, the global economy, America in particular, has witnessed a
combination in which prosperity is booming for the top 1%, while the rest of
the economy, particularly the middle class, have undergone a vicious cycle. Wages
have stagnated while productivity has grown massively. Simultaneously,
consumption has remained reasonably high in order to maintain a standard of
living.  As emphasized in the film Inequality For All, history shows that
too much concentration of wealth at the top, and too much stagnation everywhere
else results in an economy nearing collapse. For example, as Reich shows, both
the crashes of 1928 and 2007 followed on the heels of peaks in which the top 1%
owned 25% of the country’s total wealth (CITATION).

The first explanation for the divergence between
median and top incomes surrounds technological innovation and globalization. Firstly,
the rise of technology results an increase of obsolete jobs. Secondly, globalization
puts staggering pressures on businesses to outsource jobs and lower wages to vie
against low-wage workers around the world. According to Deloitte’s 2016 Global
Outsourcing Survey, 57% of respondents stated outsourcing allowed them to focus
on core business functions (CITATION).

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Moreover, these forces have favoured the well-educated and degraded low-skill
labour. However, while technology and globalization are clearly generating
transformative pressures, neither of these factors represents the full reasoning
behind the current state of inequality. Yes, technology makes many jobs
obsolete, but it also creates many new jobs. In The Work of Nations (2010), Robert Reich notes that the businesses
that are prosperous through technology and globalization are ones pursuing what
he calls high-value capitalism, the high-quality customization of goods and
services that can’t be duplicated by mass-produced uniformity at cheap places
around the world (CITATION).

 

RISING
TOP WAGES & STAGNANT MIMIMUM WAGE

Therefore, I
believe that while the impacts of technology and globalization are profound, a
key impetus for inequality and median-income stagnation lies primarily with concentration
wealth, and the subsequent lack of wealth distribution everywhere else. Essentially,
the rich are getting richer at the expense of everyone else. Specifically, the share of total income earned by the top 10 percent has risen
from around 31 percent in the 1970s to about 50 percent today (CITATION). Furthermore,
Americans in the top 1% average over 40 times more income than the bottom 90
percent (CITATION).

This suggests that citizens in the lower part of the income distribution have been
receiving a smaller share of total income over time, as the people at the very
top have been receiving greater amounts.

This variance in income distribution underlies the diminution of
the American middle class.

 

While globalization
and technological change have unsettled traditional work environments, both developments
have the potential to benefit everyone. However, the fact that they have not
suggests that the wealthy have captured the benefits for themselves. Firstly, the
US federal minimum wage serves as a huge
setback. Currently at $7.25 per hour, the wage has not increased since July
2009 (CITATION). Due
to the disproportionate influence that wealthy firms and donors have, raising
the minimum wage is tremendously difficult. Correspondingly, more than 20% of
workers are bound 

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