Thomas Piketty of Capital fame has more research results out. They’re not making headlines in the age of hourly Trump-related outrages, but they should. They’re directly related to why the Menace-in-Chief is in the White House in the first place.
It turns out that the bottom 50% of America is doing worse than ever, even as the top incomes continue to expand their wealth. But that’s not a global phenomenon: France and China are both seeing gains among their bottom 50% of incomes.
In the U.S., between 1978 and 2015, the income share of the bottom 50% fell to 12% from 20%. Total real income for that group fell 1% during that time period.
That’s not the case elsewhere. In China — where there also has been a marked rise in income inequality — the bottom 50% saw their income go up by 401%, not surprising given the industrialization the world’s second-largest economy has seen. Even in developed France, however, the bottom 50% saw their income grow, by 39%.
Like income, wealth also has become more concentrated around the world.
The economists say that the varying magnitude suggests different country-specific policies and institutions matter greatly.
These findings put a small dent in the argument that offshoring and automation are the only significant drivers of increasing inequality. While those factors are primarily responsible for the general global trend toward greater wealth and income inequality, it’s quite obvious that political and structural decisions have a huge impact on the distribution of GDP gains.
It’s also clear that American capitalism is failing America’s bottom half, including the very white working class who made up the bulk of the persuadable Trump voters who switched from Democratic to Republican. It turns out that governments run by socialists are better for the struggling majority than those run by kleptocratic tycoons.
It might help to make that argument directly in future elections, rather than claim that America is already great and just needs a fresh batch of targeted, means-tested programs to fix what ails us.
