New Labor Trends Over the past 15 years Labor has significantly changed Globally: Globalization: “free trade” with other countries Collapse of Soviet Union & Communist Economies China & India emerge as economic powers European Union forms common currency United States: Unions are declining Less “Job Security” Declining Manufacturing Jobs Rising Demand for Educated Workers ↑ Gap between Rich & Poor

Income Distribution Free markets focus on EFFICIENCY not EQUALITY United States has enormous wealth but tremendous INEQUALITY

Bottom 20% Top 5% Income Distribution 1968 $7,900 $83, $7,995 $130, % + 1.0% Change: The pay gap widens! D2D2 D2D2

CEO Pay vs. Average Worker to to 1

Household Income % of Total U.S. Household Income Bottom 20%$0 - $18,000 Next 20%$18,001 - $33,000 Middle 20%$33,001 – $52,000 Next 20%$52,001 - $82,000 Top 20%$82,001+ 3% 9% 15% 23% 50%

The top 5% earn _____ of ALL income (Those with incomes over $145,000) The top 1% earn _____ of ALL income (Those with incomes over $300,000) 22% 15%

Wealth versus Income

What is Income? What is Wealth? The sum of _________ and other forms of earnings received in a ____________________. The total value of ___________________; cash, stocks, bonds, real estate, etc. wages given time period all assets owned

Joe v. Bob example Joe Bob Annual Income$200,000 $60,000 Stocks $500,000 none Bonds $300,000 none House $500,000 rents

Percentage of Total Income Percentage of Total Wealth Bottom 20%3.5% Next 20%9.0% Middle 20%14.7% Next 20%22.8% Top 20%50.0% 0.1% 0.8% 4.2% 10.6% 84.3%

Top 1% has _____ of all the wealth! Top 1% has more wealth than the ______________________!!!!! Bottom _____ has less than _____ of the wealth. 39% bottom 95% combined 40% 1%

Wealth vs. Income Top 20% earns 50% of Income Top 20% has 84% of Wealth Top 1% earns 15% of Income Top 1% has 39% of Wealth Pay 34% of all taxes Numbers YOU should know for TEST