Global Labor Trends & Inequality The World of Labor is changing rapidly, are you ready?

New Labor Trends Over the past 20 years Labor has significantly changed United States: ↓ Union power ↓ “Job Security” overall ↓ Manufacturing Jobs (blue collar) ↑ use of Automation (robots) & ↑ immigration ↑ Demand for Educated Workers (white collar) ↑ Women advancing in both education/income ↑ Income Gap (Rich & Poor) Globally: Collapse of Soviet Union & Communist Economies Signing of free trade agreements around world China & India emerge as new economic powers European Union struggles with common currency & weak GDP growth

Humans Need Not Apply https://www.youtube.com/watch?v=7Pq-S557XQU

Income Distribution Free markets focus on EFFICIENCY not EQUALITY United States has enormous wealth but tremendous inequality gap between the rich and is the highest since the 1920’s Globalization & Technology have exacerbated this trend

Wealth vs. Income Top 1% has 21% of Income & 40% of Wealth Bottom 20% has 3.4% of Income & 0.4% wealth Know these Numbers for final exam

Poverty in the USA is rising

Top 1% real wages keeps rising faster

47% of Americans pay no federal income taxes Top 1% pay more taxes 20% => 40% The bottom 90% pay less 50% => 33% BUT, the inequality gap rises! 47% of Americans pay no federal income taxes (still pay social security, Medicare & sales tax)

Reading: Winner Take All Society? Why do a few get most of the MONEY?

Winner Take All: Superstar Theory Why Now?

Top 1% versus Top 0.1% Top 1%: Top 0.1%: Income: Over $350,000 per year 1.5 million households Top 0.1%: Income: $1.4 million per year Only 146,000 households

Falling Income of Low-Skilled Low-Skilled Workers Highly Educated Workers Wages S Wages S ---------- ---------- W1 W1 ---------- D ---------- D Q1 Quantity Q1 Quantity Demand Falls: outsourcing of jobs automation Supply Rises ↑ low skilled immigration Demand Rises: more technology jobs automation required skilled workers What is good about inequality? => Incentive to ↑ Human Capital