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Extreme policies lead to extreme outcomes.
Income inequality reached its highest level in more than half a century last year, as a record-long economic expansion continued to disproportionately benefit some of the wealthiest Americans.
A key measure of wealth distribution jumped to 0.485 in 2018, the Census Bureau said Thursday, its highest reading since the so-called Gini index was started in 1967. The gauge, which uses a scale between 0 and 1, stood at 0.482 a year earlier.
Work alone won't solve poverty—unless wages and earnings pick up substantially. It still takes government aid for families with children and others who do not earn enough, despite working 40 plus hours a week.
The most troubling thing about the new report, says William M. Rodgers III, a professor of public policy and chief economist at the Heldrich Center at Rutgers University, is that it "clearly illustrates the inability of the current economic expansion, the longest on record, to lessen inequality."
According to some research, US income inequality might be higher than it was during the Roman Empire, and pre-tax income inequality is as high as it was in the Roaring Twenties.
Income inequality is blamed on cheap labor in China, unfair exchange rates, and jobs outsourcing. Corporations are often blamed for putting profits ahead of workers. But they must to remain competitive. U.S. companies must compete with lower-priced Chinese and Indian companies who pay their workers much less. As a result, many companies have outsourced their high-tech and manufacturing jobs overseas. The United States has lost 20 percent of its factory jobs since 2000. These were traditionally higher-paying union jobs.
Service jobs have increased, but these are much lower paid.
If current policies touted as "decreasing globalism" in the US economy are trying to reduce income inequality, they're failing.
(Score: 5, Interesting) by sjames on Sunday September 29 2019, @05:07AM
The cheap labor overseas excuse has worn a bit thin. For example, according to Investopedia, the iPhone7 costs Apple $219.80 in BOM costs and $5 in labor [investopedia.com]. Then it sells for $649.
Figures are right around $3.60/hr for factory work in china, so call it an hour and a half of labor (to be generous). That means at $30/hr, the phone would cost $264 to manufacture. That's $689 if Apple makes the same amount of money on their phone. In other words, 6% more expensive. Note that that assumes the same level of automation. In reality, there would be more automation in the U.S. since
The real issue is that American companies, including sub-contractors are demanding ever higher margins and increasingly looks for reasons why they can't rather than how they can do things. This is compounded by crazy high rents and an unwillingness to go where rent is lower within the U.S.