Category: inequality

Inequality and Occupy Wall Street 3: the top 1% are superstars

~ MilesCorak ~ 3 Comments

To explain the fact that the top 1% now take home a larger share of total earnings than they ever have since the 1940s Occupiers need to understand the economics of superstars.

Talent is unique. Or as the late University of Chicago economist Sherwin Rosen stated, “hearing a succession of mediocre singers does not add up to a single outstanding performance.” When he was at his best there was only one Wayne Gretzky, and I guess that is why they nicknamed him “the Great One.” To those of us listening to the opera, or watching the hockey game, the superstar is one-of-a-kind. And because there are no substitutes they get paid much more than even the second best.

This only explains that there is a top 1%, and that as the most talented they get paid a good deal more than the rest of us. It does not explain what has changed, why have they been taking away a bigger and bigger slice of the pie since about 1980.

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Inequality and Occupy Wall Street 2: the facts are fertile soil

~ MilesCorak ~ 3 Comments

The Occupiers have their facts right.

There has been an unprecedented increase in earnings inequality in the United States, with significant shares of total earnings increasingly going to the very top.

Let’s be clear on this: we are not talking about inherited wealth, but rather “earnings”, the stuff we get from being an “employee”.

The only group to see their average earnings rise over the course of the last three decades or so are highly educated, older, men. And this is driven by the select few. It is not an exaggeration to say that it is the top 1%.

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Inequality and Occupy Wall Street 1: who should you believe, Wente or Carney?

~ MilesCorak ~ Leave a comment

Margaret Wente argues, in her column in the Saturday Globe and Mail,  that “Occupiers are blaming the wrong people“. She states that :”It’s not the greedy Wall Street bankers who destroyed these people’s hopes.”

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