• pbeconomiste

Technology, Globalization, and Social Tension

There has been a quiet jobs revolution in the USA, which has become more acute since year 2000. Recessions are having a bigger and bigger impact on jobs, and income inequality has risen to levels unseen since the 1920s. Roughly 50% of total market income goes to 10% of the population, which was also the case in the 1920s.

Half the population brings home about 30 000$ or less, while costs for education, health, and housing have risen constantly and significantly more than wages. Note that is a normal market mechanism: demand increased more than supply for these “goods and services”, so the price increased. We may fully acknowledge that this decentralized market mechanism works well to avoid allocative problems, but these markets are special, as they provide an edge for the ones who access them and cause self-reinforcing feedback loops that perpetuate and accentuate inequality of income and of opportunity (which is more serious).

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Pascal Bédard

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