The Rich Get Poorer and the Poor Get Richer
By Alan Stewart Carl | Related entries in EconomyAfter decades of a widening income gap between the poorest and the wealthiest in America, the trend may be reversing. Recent studies indicate that since the turn of the new century, the wealthiest Americans have seen a slight decrease in their earnings while the poorest have seen a slight up tick.
If this is not just a statistical aberration, what does it mean? One theory:
Perhaps so many lower-skilled jobs have now left the U.S.–or have been created elsewhere to begin with–that today’s high school grads are left doing jobs that cannot be easily outsourced–driving trucks, stocking shelves, building houses, and the like. So their pay is holding up.
College graduates, by contrast, look more outsourceable by the day. New studies from the Kauffman Foundation and Duke University show companies massively shifting high-skilled work–research, development, engineering, even corporate finance–from the U.S. to low-cost countries like India and China. That trend sits like an anvil on the pay of many U.S. college grads.
While it is fundamentally unfair when the rich get richer and the poor get poorer, we also gain nothing when the middle and upper-middle classes grow poorer. America has always been defined by a self-starting, upwardly mobile middle class and the last thing we want is for our middle classes to lose their financial security.
I don’t think any of us can fully predict what globalization will do to our economy. I’m fairly certain the American people are capable of adjusting. I just hope our system is also nimble enough to change accordingly.
This entry was posted on Monday, March 13th, 2006 and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
March 14th, 2006 at 1:48 pm
I’m doing my part to get poorer. Cool: I’m part of a trend.
March 14th, 2006 at 3:50 pm
What’s left out is that the very rich are still getting very richer. Being in the top 20% doesn’t make you that rich. Look at the top 1%, or the top 0.1%.
March 15th, 2006 at 10:48 am
Ehhhhhhh . . . I think that maybe the middle class and upper middle class are getting poorer, but I agree with Tom that the very rich are getting very richer. And while the poor might be a little less poor lately, the very poor are still getting very poorer. The net result is that the gap between the rich and the poor is still widening. It’s just that the middle class and upper middle class are sliding down towards the lower class - making more poor people.
For God’s sake, most of my law school graduating class are having a hard time paying their bills - living paycheck to paycheck. While I appreciate the fact that I can still at least pay my bills, it shouldn’t be a very comforting thought that the lawyers and the doctors are struggling along with everyone else. Well - maybe it is : )