Thomas Piketty empirically shows that the top 1% cohort rakes in 20%+ of U.S. national income.

Daisy Harvey

2018-09-01 07:34:00 Sat ET

As the French economist who studies global economic inequality in his recent book *Capital in the New Century*, Thomas Piketty co-authors with John Bates Clark medal winner and Berkeley professor Emmanuel Saez the latest September 2018 World Inequality Report. This fresh report empirically demonstrates that the rise of income-and-wealth for the top 1% U.S. population mirrors the fall of income-and-wealth for the bottom 50% U.S. population. Specifically, the top 1% cohort rakes in more than 20% of U.S. national income in 2017 in comparison to only 11% back in 1980. At the same time, the bottom 50% cohort receives 12% of U.S. national income in 2017 in comparison to about 20% back in 1980.

Not only do the rich become richer and the poor become poorer, the income and wealth transfers seem simultaneous, synchronous, and causal in time-series data. This stark feature shows an empirically robust increase in U.S. economic inequality over the recent decades.

However, this socioeconomic issue cannot reflect talent concentration in specific labor markets. At least some of this dichotomous wealth inequality arises from the fact that several industries such as biotech, telecom, and social media mold large players with competitive moats into quasi-monopolies. These mega players invest heavily in patents, trademarks, copyrights, and other intellectual properties in order to safeguard their market dominance against external competitive forces.

Nobel Laureate and former chief economist at World Bank Joseph Stiglitz points out that tech titans have become quasi-monopolies with high market concentration. This concentration serves as a primary explanation for worse income and wealth inequality in America. When the network platform orchestrators such as Facebook, Apple, Microsoft, Google, Amazon, Netflix, and Twitter (FAMGANT) reinforce their market strength and dominance, they may violate antitrust laws and regulations. Also, several other industries such as pharmaceutical firms (Johnson & Johnson, Merck, and Pfizer etc) and telecoms (AT&T, Verizon, Sprint, and T-Mobile) are new additions to the checklist of U.S. quasi-monopolies.

This new technological trend aggravates socioeconomic inequality, deepens anti-competitive concerns, and harms consumer benefits in terms of longer-term price and quality improvements.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

New computer algorithms and passive mutual fund managers now run the stock market.

Joseph Corr

2019-11-17 14:43:00 Sunday ET

New computer algorithms and passive mutual fund managers now run the stock market.

New computer algorithms and passive mutual fund managers run the stock market. Morningstar suggests that the total dollar amount of passive equity assets re

+See More

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports.

Rose Prince

2018-08-03 07:33:00 Friday ET

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports.

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports. These tariffs encompass chemical prod

+See More

White House economic advisor Gary Cohn resigns due to his opposition to President Trump's protectionist tariff stance.

Peter Prince

2018-03-02 12:34:00 Friday ET

White House economic advisor Gary Cohn resigns due to his opposition to President Trump's protectionist tariff stance.

White House top economic advisor Gary Cohn resigns due to his opposition to President Trump's recent protectionist decision on steel and aluminum tariff

+See More

Analytic business competitors apply smart data science to support their distinctive capabilities and strategic advantages.

Peter Prince

2020-11-24 09:30:00 Tuesday ET

Analytic business competitors apply smart data science to support their distinctive capabilities and strategic advantages.

Many analytic business competitors can apply smart data science to support their distinctive capabilities and strategic advantages. Thomas Davenport and

+See More

Facebook, Apple, Microsoft, Google, and Amazon account for more than 15% of market capitalization of the U.S. stock market.

Jacob Miramar

2017-05-19 09:39:00 Friday ET

Facebook, Apple, Microsoft, Google, and Amazon account for more than 15% of market capitalization of the U.S. stock market.

FAMGA stands for Facebook, Apple, Microsoft, Google, and Amazon. These tech giants account for more than 15% of market capitalization of the American stock

+See More

Our fun podcasts deep-dive into the current global trends, topics, and issues in support of better stock market investment decisions.

Daphne Basel

2026-02-14 11:26:00 Saturday ET

Our fun podcasts deep-dive into the current global trends, topics, and issues in support of better stock market investment decisions.

Our AYA fun podcasts deep-dive into the current global trends, topics, and issues in macro finance, political economy, public policy, strategic management,

+See More