January 20, 2013

The Smartphone Have-Nots - NYTimes.com

A reasoned piece about the two main theories to explain the increase in income inequality during the last couple of decades. I firmly believe that technology is at the heart of this phenomenon because the information technology revolution has empowered high skilled and highly motivated individuals to grab this golden ring.

Meanwhile, others with less intellectual capacity, motivation, skills, unwillingness to move, or inability to pay for educating themselves have not been able to keep up resulting in lower paying jobs.
Another factor at work is the super-rich have leveraged their higher incomes into investment portfolios that have resulted in substantial income from capital gains, dividends, etc, which are taxed at a lower rate.

Income inequality is not inherently evil unless it results in repression. Nevertheless, the democracy is at risk and politicians will continue to fight over its causes and remedies.


The Smartphone Have-Nots - NYTimes.com:

 "....After Mishel finished his presentation, David Autor, one of the country’s most celebrated labor economists, took the stage, fumbled for his own PowerPoint presentation and then explained that there was plenty of evidence showing that technological change explained a great deal about the rise of income inequality. Computers, Autor says, are fundamentally different. Conveyor belts and massive steel furnaces made blue-collar workers comparatively wealthier and hurt more highly skilled crafts­people, like blacksmiths and master carpenters, whose talents were disrupted by mass production. The computer revolution, however, displaced millions of workers from clerical and production occupations, forcing them to compete in lower-paying jobs in the retail, fast-food and home health sectors. Meanwhile, computers and the Internet disproportionately helped people like doctors, engineers and bankers in information-intensive jobs. [emphasis added] Inequality was merely a side effect of the digital revolution, Autor said; it didn’t begin and end in Washington......"

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