[These are the opening remarks I made to the Senate Standing Committee on Social Affairs, Science and Technology of the Parliament of Canada. I appeared as a witness at the May 2nd meeting of the Committee dealing with Social inclusion and cohesion in Canada to address the topic of inequality. These remarks do not substitute for the official transcripts that will be produced by the Standing Committee.]
Tag: top 1%
The ten trends that have shaped the last century, and that will shape the next
Ten forces have defined how we have lived our lives during the last one hundred years, but the “rights” revolution is at their core and will shape how we live the next hundred years.
Daron Acemoglu, the MIT labour economist and co-author of Why Nations Fail, begins a recently released paper on a very personal note: “I write this as I await the birth of my second son.”
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Over 90% of the income gains in the first year of the recovery went to the top 1%
Emmanuel Saez of the University of California at Berkeley has updated his work with Thomas PIketty on the evolution of US Top Incomes to 2010.
He finds that:
“In 2010, average real income per family grew by 2.3% … but the gains were very uneven. Top 1% incomes grew by 11.6%, while bottom 99% incomes grew only by 0.2%. Hence, the top 1% captured 93% of the income gains in the first year of recovery. Such an uneven recovery can help explain the recent public demonstrations against inequality.”
The 10 page update offers a clear picture of how income shares have varied over different business cycles, as well as the long-term trends since 1917. Top income shares fell dramatically after World War II, stayed flat, then began to rise in the early 1980s and have returned to their pre-War levels.
The top 10% in the US take now take home about 47% of all income, but this is driven by the top 1% who account for 20%.
The difference between the business cycle of the 1990s and the 2000s is that the incomes of the bottom 99% grew by 20% between 1993 and 2000, but only by 6.8% between 2002 and 2007.
Saez suggests that this “may … help explain why the dramatic growth in top incomes during the Clinton administration did not generate much public outcry while there has been a great level of attention to top incomes in the press and in the public debate since 2005.”
Inequality begets inequality, according to the Economic Report of the President
On a warm evening last spring I found myself at a dinner party in the lush suburbs of a small Ivy League town not far from New York City.
The main concern of a fellow economist was the trouble his son was having raising his new family: that would be the son living in Manhattan, the one making $10 million a year.
It appears there is a bidding war for spaces in good kindergartens and, as we all know, prices skyrocket when demand outstrips supply.
And demand has been rising. We also know that.
So the most striking claim in the Economic Report of the President for 2012 is not that the share of earnings accruing to the top 1%—a share that was about 8% during the early 1980s—stands at close to 20%. After all, this is old news, the stuff of Occupy Wall Street.
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Inequality and Occupy Wall Street 8: causes of growing inequality and policies to address it
This video of a panel discussion called “The Challenges of Growing Inequality” organized by the Kennedy School of Government at Harvard University features a discussion by Lawerence Katz, a prominent labour economist. Katz speaks on the causes of inequality and offers advice to Occupiers on what should be done about it.
Inequality and Occupy Wall Street 7: tax policy for occupiers
Perhaps a bit more politely than others in the mainstream media, but nonetheless pretty emphatically, the Ottawa Citizen columnist Joanne Chianello tells Occupiers that it’s time to leave, and she offers some advice:
“I don’t know what the answer is to the growing income gap. Unfortunately, neither do the people at Occupy Ottawa or Occupy Toronto or Occupy Vancouver. They could have contacted a lefty economist (yes, they exist) to help frame specific policy issues or demands, but they didn’t. Perhaps that’s the protest’s “stage two” we keep hearing about.”
Contact a lefty economist!
Well, if economists are going to be at the centre of “stage two” why don’t we forget about “lefty” or “righty”, and just consult the “best”?
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Economics for public policy 