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A new study (abstract and free PDF available) authored by several economists at the IMF (International Monetary Fund) reveal an inverse relation between increases in inequality and GDP growth. In what could also be considered a heavy blow to trickle-down economic theory, data analyses show (page 7) that increases of income share on the fifth quintile actually hurt growth, while increases in any other quintile favours growth with the lowest quintile showing the strongest push.
From the abstract:
We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class.
Original Submission
(Score: 3, Informative) by MichaelDavidCrawford on Friday June 19 2015, @12:28PM
Look at Uber, a small company with a $40B valuation. When it goes public only its employees and investors will get a share of that pie.
The vast majority of the actual labor behind Uber is done by its drivers, who do not get stock options, paid vacation nor health insurance.
Yes I Have No Bananas. [gofundme.com]
(Score: 3, Insightful) by tibman on Friday June 19 2015, @02:22PM
That is extremely normal. Tech companies hire contractors who get nothing but a paycheck and a headache. Even full-time employees for startups get the bare minimum. When the tech company sells only the initial owner(s) and VC get a cut of that big money. All the little people who worked nights to help make the company a success get to visit their boss' new mansion for the next christmas party : )
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