This is an interesting article that ties into the article we read for class, "Comparisons of Economic Mobility". The article discusses the income for the middle class over the years, along with the struggles the middle class is facing. It touches on the role of unions and the decline of unions over the past 30 years and how that has affected the middle class. While this is happening the rich are becoming richer, creating more difference between the classes, pointing to the benefits of globalization for corporations among other things.
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This is one of the consequences that is bounded to happen when it comes to globalization. Everybody is out to maximize profits with minimal cost. My concern is that this would maybe decrease the standard of living (due to stagnation of income and higher inflation) and that the middle class may no longer be able to afford their children to be sent to colleges? This is one of the issues that need to be addressed by the Obama administration.
This article only drives home the points that were made in class about the low mobility in the U.S. It also shows that education is more important than ever, in order for future generations to compete they must be educated. However, I do not believe it is the role of government to redistribute income, as long as everyone can be educated to close to the same level. After the population is eeducated it should be left up for people to work to see how successful they can become, you cannot just hand out money to people because our system is "unfair".
It is a challenge for many to get an education when they can not afford one in the first place. Less than 30% of Americans over 25 have Bachelor Degrees. So presently not everyone can be educated to close to the same level.
As the article stated the average tax payer made LESS in 2008 then they did in 1988, while the rich few grew their incomes 33% within that time span.
It is easy for us to say everyone has the same opportunities while we attend OWU, but most Americans do not get this opportunity.
It seems to me that globalization is not going to be stopped. So instead of trying to protect the jobs of middle class in U.S. which might drag down U.S. economy, government should invest and try to provide equal education opportunities to middle class so that they will find their place in the changing dynamics of the economy. I feel like this fits into the idea of Schumpeter's creative destruction. People seeking for innovation will find jobs, wealth, upward movement in the class and globalization can only help with the process as it provides the whole world as the market.
This is similar to what happens in South American countries. The rich get richer and the gap keeps expanding. The United States experiences lot less economic mobility than Americans like to think. The economic mobility of the United States has more in common with the economic mobility of South America than that of more equitable countries like Sweden and Denmark.
This gap seems that it is only going to get worse as more and more companies continue to cut costs by moving production overseas. This is a tough time for Americans because we come from a history of blue collar factory workers who were happy making enough money to put food on the table and a roof over their head. Today people seem to not only want to get rich but get very rich no matter what kid of affect it has on the American economy, or how many American workers are put out of work.
This is yet another question of equity VS efficiency. How much efficiency are we willing to give up for relative income equality? By not having strong unions and with little government involvement in labor market, we keep labor market flexible. Flexible labor markets are great for corporations, they can do whatever they want. In my opinion, the government should be more involved in the labor market.
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