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
Several business founders and entrepreneurs take low risks with high potential rewards to buck the conventional wisdom.
Chanel Holden

2020-06-24 09:32:00 Wednesday ET

Several business founders and entrepreneurs take low risks with high potential rewards to buck the conventional wisdom.

Several business founders and entrepreneurs take low risks with high potential rewards to buck the conventional wisdom. Renee Martin and Don Martin (2010

+See More
Warren Buffett invests in American stocks across energy, transport, and finance etc.
Daphne Basel

2017-07-07 10:33:00 Friday ET

Warren Buffett invests in American stocks across energy, transport, and finance etc.

Warren Buffett invests in American stocks across numerous industries such as energy, air transport, finance, technology, retail provision, and so forth.

+See More
Goldman Sachs takes a $5 billion net income hit that results from its offshore cash repatriation under the Trump tax law.
Charlene Vos

2018-01-02 12:39:00 Tuesday ET

Goldman Sachs takes a $5 billion net income hit that results from its offshore cash repatriation under the Trump tax law.

Goldman Sachs takes a $5 billion net income hit that results from its offshore cash repatriation under the new Trump tax law. This income hit reflects 10%-1

+See More
Hong Kong billionaire Li Ka-Shing announces his retirement in March 2018 with an incredible rags-to-riches life story.
John Fourier

2018-03-11 08:27:00 Sunday ET

Hong Kong billionaire Li Ka-Shing announces his retirement in March 2018 with an incredible rags-to-riches life story.

At 89 years old, Hong Kong billionaire Li Ka-Shing announces his retirement in March 2018. With a personal net worth of $35 billion, Li has an incredible ra

+See More
Anti-competitive corporate practices may stifle U.S. innovation.
Fiona Sydney

2020-01-15 08:31:00 Wednesday ET

Anti-competitive corporate practices may stifle U.S. innovation.

Anti-competitive corporate practices may stifle U.S. innovation. In recent decades, wage growth, economic output, and productivity tend to stagnate as U.S.

+See More
Fed Chair Jay Powell suggests that the recent surge in U.S. business debt poses moderate risks to the economy.
Laura Hermes

2019-06-05 10:34:00 Wednesday ET

Fed Chair Jay Powell suggests that the recent surge in U.S. business debt poses moderate risks to the economy.

Fed Chair Jay Powell suggests that the recent surge in U.S. business debt poses moderate risks to the economy. Many corporate treasuries now carry about 40%

+See More