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  • - [Instructor] What we're looking at is a graphic

  • that's put together by "The New York Times,"

  • and it's a way of thinking about how incomes

  • have grown since 1980.

  • So before we even look at the various percentiles of income,

  • this black line is interesting to look at

  • because this is real per capita GDP,

  • and you can see relative to 1980,

  • real per capita GDP has grown, it looks like, about 80%.

  • And that's interesting because, in theory,

  • if all of the growth of productivity of a country

  • were evenly distributed, then everyone would be growing

  • on that per capita GDP line.

  • But what's interesting about this graphic

  • is we clearly do not see that.

  • So, for example, folks with incomes

  • in the 90th to 99th percentiles,

  • their income actually is growing inline with per capita GDP.

  • And, in the year that this was compiled,

  • that would be someone, after taxes,

  • making 120,000 to 425,000

  • per year after taxes,

  • so that's a good amount of money.

  • Someone making 425,000 after taxes

  • might be making roughly 700,000

  • or even $800,000 before taxes.

  • But we see a spread for people making more or making less.

  • The folks in the top 1%,

  • their income has grown about twice as fast

  • as per capita GDP, and folks in the 0.01%,

  • so this one out of every 10,000 people,

  • their income looks like it has grown

  • roughly five times faster than GDP.

  • And, obviously, if some folks' incomes

  • are growing faster than per capita GDP,

  • other folks' incomes have to be growing slower

  • than per capita GDP, and we can see that.

  • The middle 40%, their growth,

  • it looks like it's about 2/3 as fast as per capita GDP,

  • and the bottom 50%,

  • it looks like their growth is about 1/3 of per capita GDP.

  • Now some folks might say, "Hey, this is alarming.

  • "We see an increase in inequality as our economy grows,"

  • while some might say,

  • "Hey, this is a side effect of capitalism.

  • "Everyone's income is growing in real terms,

  • "but in a capitalist world

  • "some people might grow more than others."

  • But regardless of your point of view,

  • it's interesting to think about why

  • we see this spread happening.

  • And we're not going to be able

  • to dissect all of it right now,

  • but I'll talk about some of the areas of interest

  • that might explain this phenomenon,

  • and it's not in any particular order,

  • but some folks would point to globalization.

  • Why would globalization do this?

  • Well, in the globalized world,

  • capital can flow to wherever

  • they can get the cheapest labor.

  • And so, for example, if you're someone

  • in the top 1% or someone in the 0.01%,

  • and you own a company,

  • you could take your capital to a lower cost place.

  • You don't have to make wages in your country go up,

  • and so the demand for labor is going to go offshore,

  • and so there will be less demand for labor in your country,

  • so it wouldn't drive wages up.

  • Another possibility that folks

  • could talk about is technology.

  • Technology, oftentimes, has similar effect

  • as globalization.

  • Instead of taking labor and taking it offshore

  • to find cheaper labor,

  • technology, oftentimes, can replace labor.

  • Or another way to think about it,

  • it can make folks more productive

  • so you don't need as much labor.

  • And so the folks who own the technology

  • or who are able to take advantage of technological trends,

  • well, they might get a disproportionate amount

  • of that GDP growth.

  • Related to both of these is the idea of education.

  • Maybe in a globalized world and a technology world,

  • the payback of education matters even more,

  • and so if someone doesn't get as much of an education,

  • they can't participate in the benefits

  • of technology as much,

  • or jobs that they're qualified for go offshore,

  • so they can't demand as high wages.

  • Another potential lever to think about

  • is immigration policy, which, from a wage point of view,

  • could have a similar effect as technology or globalization.

  • If you have an increase in supply

  • of lower skilled labor, economics will tell us

  • that the price for that labor, which are wages,

  • would be suppressed.

  • Another major lever that folks will definitely point to

  • is tax policy, or fiscal policy in general.

  • For example, generally speaking,

  • the ordinary income tax rates,

  • the more money you make become a higher and higher

  • percentage of your income,

  • but people in the very high brackets,

  • in that top 1%, or in that top 1/100 of a percent,

  • many of their income comes disproportionately

  • from capital gains, income on asset price appreciation,

  • and that time of income, today,

  • is taxed at a significantly lower tax rate

  • than ordinary income.

  • And then last, but not least,

  • you have monetary policy.

  • And this is the actions of the Federal Reserve

  • and interest rates, and many times,

  • especially when you go through crises,

  • the benefits of lower interest rates

  • might disproportionately benefit those who own capital,

  • who are in the position to borrow

  • at those lower interest rates

  • and then invest it at higher interest rates,

  • and that might speak to some of these higher brackets.

  • So I'll leave you there.

  • The goal of this video isn't to make a value judgment

  • over what's good, what's bad, or what likely is the case,

  • but it's just to get us thinking about the trends

  • that we are for sure seeing and what might be the levers,

  • and this isn't an exhaustive list,

  • that might be causing them.

- [Instructor] What we're looking at is a graphic

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B1 gdp income labor globalization technology offshore

Looking at trends in inflation adjusted income since 1980

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    林宜悉 posted on 2020/04/15
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