Gap Between Rich And Poor In America Essay

Gap Between Rich And Poor In America Essay-2
Privately, some policymakers admit that the recent trends have them worried, and not just because of the congressional elections in November.The statistics suggest that the economic boom may fade.Such sceptics will be sure to make much of any sign that the broad middle-class reaps scant benefit from the current productivity boom, setting back the course of European reform even further.

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Even so, ordinary Americans seem to believe that theirs is still a land of opportunity.

The proportion who think you can start poor and end up rich has risen 20 percentage points since 1980.

The elites in the early years of the 20th century were living off the income generated by their accumulated fortunes.

Today's rich, by and large, are earning their money.

In America about half of the income disparities in one generation are reflected in the next.

Gap Between Rich And Poor In America Essay Rapid Growth Of Technology Essay

In Canada and the Nordic countries that proportion is about a fifth.Eventually, the country's social fabric could stretch.“If things carry on like this for long enough,” muses one insider, “we are going to end up like Brazil”—a country notorious for the concentration of its income and wealth. Despite a quarter century during which incomes have drifted ever farther apart, the distribution of wealth has remained remarkably stable.In 1916 the richest 1% got only a fifth of their income from paid work, whereas the figure in 2004 was over 60%.The rise of the working rich reinforces America's self-image as the land of opportunity. Several new studies* show parental income to be a better predictor of whether someone will be rich or poor in America than in Canada or much of Europe.Its workers now produce over 30% more each hour they work than ten years ago. Though incomes were rising fastest at the top, all workers' wages far outpaced inflation. The pace of productivity growth has been rising again, but now it seems to be lifting fewer boats.After you adjust for inflation, the wages of the typical American worker—the one at the very middle of the income distribution—have risen less than 1% since 2000. If you take into account the value of employee benefits, such as health care, the contrast is a little less stark.Eight out of ten, more than anywhere else, believe that though you may start poor, if you work hard, you can make pots of money. The political consensus, therefore, has sought to pursue economic growth rather than the redistribution of income, in keeping with John Kennedy's adage that “a rising tide lifts all boats.” The tide has been rising fast recently.Thanks to a jump in productivity growth after 1995, America's economy has outpaced other rich countries' for a decade.The richest Americans now earn as big a share of overall income as they did a century ago (see chart 2), but their share of overall wealth is much lower.Indeed, it has barely budged in the few past decades.


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