Wednesday, June 17, 2015
Wealth does not trickle down from the rich to the poor. Period.In fact, concentration of wealth in the hands of the rich, the report concludes, is bad for the economy. In the words of the report itself:
[I]f the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth. The poor and the middle class matter the most for growth via a number of interrelated economic, social, and political channels.So, income inequality is a problem, not just for the people at the lower portion of the income ladder, but for the entire economy. And here are the report's general recommendations for lessening inequality.
Irrespective of the level of economic development, better access to education and health care and well-targeted social policies, while ensuring that labor market institutions do not excessively penalize the poor, can help raise the income share for the poor and the middle class.Interesting. Maybe the notion that making the rich richer is good because they're the "Job Creators" (The word "creator" in that term was carefully chosen to evoke God-like images of The Creator) and their wealth will trickle down to others is a self serving myth created by those at the top of the heap and their enablers. And maybe, if wages were higher and social/educational programs were stronger, we'd all be better for it—except, of course, the folks who have benefitted the most from our current robber-baron levels of income inequality.