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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsOut-Of-Control Inequality Is Making The World’s Top Financial Officials Worried
2/11/15
On Tuesday, a draft statement from the Group of 20 finance officials warned that growing income inequality could harm economic growth, the first time the group has voiced concern over the issue.
In some countries, potential growth has declined, demand continues to be weak, the outlook for jobs is still bleak and income inequality is rising, it reads. The officials write later in the draft, We will also strive to ensure that growth is inclusive, including through policies that address income inequality. According to Bloomberg News, the group has never explicitly mentioned it in a communiqué before.
According to the Organization for Economic Cooperation and Development, the income gap between rich and poor in most developed countries is the biggest in three decades, with the wealthiest 10 percent making 9.5 times more than the bottom 10 percent. And a recent report from Oxfam forecast that the top 1 percent of the worlds earners would own more wealth than the bottom 99 percent by next year. Its share of wealth has already increased from 44 percent in 2009 to 48 percent last year.
Here in the United States, income inequality has been growing for decades, but its gotten even worse since the financial crisis. Between 2009 and 2012, the top 1 percent of earners captured all of the income gains while average income actually fell for everyone else. That continues a recent trend in which the richest 10 percent capture increasingly larger shares of income growth during times of economic expansion.
The G-20 isnt the only group concerned about what these trends mean for the economy. Economists at the International Monetary Fund released a paper arguing that higher inequality is correlated with lower and less long-lasting growth, while taking steps to redistribute income gains wont hurt the economy. Federal Reserve Chair Janet Yellen has warned that income inequality is a very serious problem. The CEO of one of the worlds largest banks has called it very destabilizing. A majority of large American companies have warned investors that falling incomes for most consumers could hurt their businesses....
http://thinkprogress.org/economy/2015/02/11/3621727/first-time-g-20-warns-income-inequality-dangerous/
*that last sentence..."A majority of large American companies have warned investors that falling incomes for most consumers could hurt their businesses"....ya think?
winter is coming
(11,785 posts)dotymed
(5,610 posts)Bernie Sanders as our next POTUS...
meow2u3
(24,819 posts)Income inequality didn't bother those guys 10 years ago, so why now? It seems as if their parents either never taught them to share or they forgot those lessons when they came into money.
ashling
(25,771 posts)were as greedy as them
meow2u3
(24,819 posts)Especially for rich, greedy billionaires.
stillwaiting
(3,795 posts)RiverLover
(7,830 posts)We have a sign, though, that this is catching on in the modern corporate world. There's a CEO who actually, voluntarily, raised his company's lowest wages to $16/hour, along with increasing benefits.
And he's loving the result~
Jim Hightower
2/14/15
Not only did Mark Bertolini, corporate chief of the health insurance giant Aetna, increase the company's lowest wage to $16 an hour and improve health benefits, he publicly revealed that these increases arent as financially painful as other corporate conglomerates claim.
http://www.nationofchange.org/2015/02/14/corporate-apostate/
Hope, from an insurance company....who'd have thunk it?
daredtowork
(3,732 posts)So businesses will feel comfortable that "everyone" is having to negotiate a living wage.
Also, if you think that Insurance chief is ironic, in San Francisco our chief voice of R2R(tm) (RichPeople-to-RichPeople) "do the right thing" talk is the guy who owns Salesforce.com, Marc Benioff. Totally blows my mind.
aspirant
(3,533 posts)With more robots on the way you have another dilemma. You smirk as you say that robots don't require pay, bonuses, benefits etc but aren't you forgetting something.
Your robots don't buy food, clothing,computers,houses,cars,vacation spa packages,furnaces, air conditioners and on and on.
When the people don't have money to buy your junk, the economic theory of supply/demand will become extinct.
Ichingcarpenter
(36,988 posts)with the global approaches to alternative energy technology, such as cold fusion. In combination with the ongoing development of 3D printing technology, and the ability to share and distribute information freely online the potential exists for revolutionary times in our near future and the End of Artificial Scarcity
daredtowork
(3,732 posts)truebluegreen
(9,033 posts)hatrack
(59,660 posts)laundry_queen
(8,646 posts)jwirr
(39,215 posts)paleotn
(18,097 posts)lovuian
(19,362 posts)unchecked it produces Great Depressions
when a 1% holds more assets than the 90% ....it means social revolution is in the works
and the Worker will rise up
Economics 101
the Emperors, Monarchs, and Robber Barons ....history repeats itself
SammyWinstonJack
(44,130 posts)produced?
Something's gotta give.
laundry_queen
(8,646 posts)Anyone who knows anything about economics understands this. The only people who don't get it are those who buy into trickle down (long since disproven) or those who are dumb and ideological (think small gov't conservative types) and usually people who don't understand the consequences of income inequality are both.
There are CEOs out there who don't understand this and think that paying employees bottom wages while making money for shareholders is a GOOD thing. They don't understand how it hurts the broader economy. They don't get how they could be doing better if they, and other CEOs just paid employees better. Many are very narrow minded, never looking beyond this quarter...at the most they look forward a year. And they don't want to be the first one to pay employees better and risk losing that fraction of a percent of profit, lest shareholders start fleeing. Too many people out there running things are not knowledgeable enough to run things. Not enough people able to look at the big picture. I blame our business schools. There are some good ones out there (ahem, mine of course) but so many still teach disproven theories as valid. Keynes has been proven right over and over again, and trickle down has been discredited over and over again. Yet, trickle down persists. Why is that? Why are business school allowed to teach it? Are universities allowed to teach the science of anti-vaxx? Um, no.
The business community is going to have to get their act together and start paying employees more, or they are going to have it forced upon them by some other means that they aren't going to like very much. Large masses of people struggling to survive has never been a good thing for rich people.
Agony
(2,605 posts)and we should be shooting for full employment with the government providing it until the private sector will be able to hire those workers.
Business people know this. We need a fiscal policy change and the political class is not up to the challenge. Maybe if they all worked a blue collar job for a couple of years
It is our monetary system for fx sake.
rhett o rick
(55,981 posts)and that some day will all collapse, but they all want the other guy to sacrifice. There is no way you can get capitalists to voluntarily "back off" their quest for more gold. Alan Greenspan thought that corporate leaders were too smart to kill the goose. Alan Greenspan is an idiot.