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

Corporate strategies, portfolio choices, and management memes add value and drive business process improvements over time.

Jacob Miramar

2020-08-19 10:32:00 Wednesday ET

Corporate strategies, portfolio choices, and management memes add value and drive business process improvements over time.

Corporate strategies, portfolio choices, and management memes add value and drive business process improvements over time. Andrew Campbell, Jo Whitehead,

+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 Jerome Powell sees a remarkably positive outlook for the U.S. economy in early-October 2018.

Charlene Vos

2018-10-03 11:37:00 Wednesday ET

Fed Chair Jerome Powell sees a remarkably positive outlook for the U.S. economy in early-October 2018.

Fed Chair Jerome Powell sees a remarkably positive outlook for the U.S. economy right after the recent interest rate hike as of September 2018. He humbly su

+See More

Apple, Alphabet, Microsoft, Amazon, and Facebook have become the most valuable public companies in the world.

Olivia London

2017-05-13 07:28:00 Saturday ET

Apple, Alphabet, Microsoft, Amazon, and Facebook have become the most valuable public companies in the world.

America's Top 5 tech firms, Apple, Alphabet, Microsoft, Amazon, and Facebook have become the most valuable publicly listed companies in the world. These

+See More

Millennials can save to make a fortune with compound interest over 40 years.

Laura Hermes

2017-07-25 10:44:00 Tuesday ET

Millennials can save to make a fortune with compound interest over 40 years.

NerdWallet's new simulation suggests that a 25-year-old millennial who earns an inflation-free base salary of $40,456 and saves 15% each year faces a 99

+See More

Paulson, Geithner, and Bernanke warn that people seem to have forgotten the lessons of the global financial crisis from 2008 to 2009.

Daphne Basel

2018-07-17 08:35:00 Tuesday ET

Paulson, Geithner, and Bernanke warn that people seem to have forgotten the lessons of the global financial crisis from 2008 to 2009.

Henry Paulson and Timothy Geithner (former Treasury heads) and Ben Bernanke (former Fed chairman) warn that people seem to have forgotten the lessons of the

+See More