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

2. 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

4. Humans Need Not Apply

5. 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

6. 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

7. Poverty in the USA is rising

8. Top 1% real wages keeps rising faster

9. 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)

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

11. Winner Take All: Superstar Theory
Why Now?

12. 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

13. 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