Economist Branko Milanovic ( <a href="https://twitter.com/BrankoMilan" rel="nofollow">https://twitter.com/BrankoMilan</a> ) wrote about this in a World Bank working paper in 2012. Here is a recent article which refers to his now famous "Elephant Curve."<p><a href="http://www.voxeu.org/article/greatest-reshuffle-individual-incomes-industrial-revolution#.V4eDRJepTrE.twitter" rel="nofollow">http://www.voxeu.org/article/greatest-reshuffle-individual-i...</a><p>His book published in April: <a href="https://www.amazon.com/dp/067473713X/" rel="nofollow">https://www.amazon.com/dp/067473713X/</a>
I think if we want to understand the recent surge of populist movements in western countries, this study gives one good reason for it. Regardless of wether statements/positions of those groups are correct or outrageous.<p><i>“In Sweden, for example, where the government intervened to preserve jobs, market incomes fell or were flat for only 20%, while disposable income advanced for almost everyone. In the United States, government taxes and transfers turned a decline in market incomes for 81% of income segments into an increase in disposable income for nearly all households.”</i><p>So, protectionism works? At least it seems consequential to me, that for western workers came with globalization an increase in wage-competition from workers in emerging markets.<p>That most western workers can afford much more from their flattened or fallen income than they could 10 years ago is the other part of the story that neither this data-point tells nor the populist movements.
Since there is a smaller consumer spending pool to pull from, prices have risen faster on key products to make up for the lack of growth in wages.<p>Housing/rent, healthcare, tuition, food and many other things have risen dramatically. Some products have come down in price but that is typical with technology/entertainment products over time.<p>If you make products to sell to everyone, not just the wealthy, you have also probably noticed consumers having less money to spend. This is not good for the engine of the US that creates jobs, small to medium business. This is bad for both classes in the US: wealthy upper and lower plebs, the middle is just about gone.<p>If we want growth across the board, wages also have to grow, else stagnation for all from lower to upper, when did we forget this?
This is neoliberalism at work. Bernie Sanders challenges this, while Obama and Hillary seek to preserve it.<p>Any chance at changing this in the 2016 election is dead. 4 or 8 more years of this and it's only going to get worse.<p>My only hope is that a strong progressive movement can take off before the right wing Nationalists make it into power.
This is the cost of lifting more than a billion people out of abject poverty and is an exaggeration of the negative impact (for example, ignores transfer payments & quality of life improvements). It is part of what is overall a very good thing.
These 'zero growth for bottom X%' headlines, even when mathematically valid, are deceiving because growth isn't randomly distributed across the income space, it's concentrated at the top.<p>'Zero for bottom 50' is usually code for 'positive for 40-50', 'neutral for 20-40', 'negative for 0-20'.
The article says that the causes of this stagnation were:<p>1. the deep slump and the weak recovery after the 2008 financial crisis<p>2. a decline in the number of people available for work<p>3. more part-time and temporary working<p>4. a decline in the influence of trade unions
"Our research finds that carefully targeted policy measures to boost productivity, GDP growth, and employment can make a significant difference."<p>I don't buy. What their research found is that one country has fared better than the other 5. Everything else are assumptions of causality.
Original report available at: <a href="http://www.mckinsey.com/global-themes/employment-and-growth/poorer-than-their-parents-a-new-perspective-on-income-inequality" rel="nofollow">http://www.mckinsey.com/global-themes/employment-and-growth/...</a>
That's not surprising. Infinite growth is physically impossible and we are just seeing the end of it. We have to shift our economy and planning from a growth driven mindset to a sustainability driven one.