In: Economics
Video Analysis Paper (watch, analyze, agree & disagree)
You are required to submit (see Submit Assignment tab in right hand column) an approximately 1,000 word essay. The essay should include a clear summary and analysis of this CNBC video, entitled "Why The Inequality Gap Is Growing Between Rich And Poor."
https://www.youtube.com/watch?v=41y4c1Oi5Uo&list=PL9Yr7AeheMx94eOF4zT50MXpuDozTxnYU&index=6
Note there are five (5) key points the video makes:
Technological Change
Globalization
Rise of Superstars
Falling Labor
Seizing Advantage
*Inquality between Rich & Poor: -
Inequality is bad and getting worse. In the 1980s, the richest 10% of the population in OECD countries earned 7 times more than the poorest 10%. They now earn nearly ten times more. When you include property and other forms of wealth, the situation is even worse: in 2012, the richest 10% controlled half of all total household wealth and the wealthiest 1% held 18%, compared to only 3% for the poorest 40%. The poorest members of society suffer immediately from inequality, but in the longer term, the whole economy is also damaged. OECD figures show that the rise in inequality observed between 1985 and 2005 in 19 OECD countries knocked 4.7 percentage points off cumulative growth between 1990 and 2010. To reduce inequality, we have to promote inclusive growth. Create economies where every citizen, regardless of income, wealth, gender, race or origin is empowered to succeed. Our approach to doing this rests on four main pillars.
*Rising Inequality: -
Income inequality has been rising in many wealthy countries in recent decades. In the 1980s, the average disposable income of the richest 10% in OECD countries was around seven times higher than that of the poorest 10%; today, it’s around 9½ times higher. Income gaps are even more striking when it comes to the highest earners. In the 1980s, the top 1% of earners commanded less INTRODUCTION OECD Insights – INCOME INEQUALITY OECD 2015 11 than 10% of total pre-tax income in every OECD country bar one. Thirty years later, their share was above 10% in at least nine OECD countries and above 20% in the United States.
*Topics to be focused upon: -
1. Technological Change :
In economics, a technological change is an increase in the efficiency of a product or process that results in an increase in output, without an increase in input. In other words, someone invents or improves a product or process, which is then used to get a bigger reward for the same amount of work.
The telephone is an example of a product that has undergone a technological change. It has undergone many different changes over the years that have made it more efficient. Processes or products, such as the telephone, move through technological change in three stages:
*Impacts of Technological Change: -
We have all likely experienced the impact of technology. Let's take a look at the ways, both good and bad, technological change has impacted our world:
When telephones were first invented, the object was to be able to verbally communicate with someone. Due to technological changes, we have multiple ways to communicate using our phones, such as text, email, or talk.
Technology makes it possible to perform everyday tasks faster and with less energy on our part. For instance, some people have a vacuum cleaning robot. Instead of spending 30 minutes vacuuming, they push a button and go do something else. That's efficiency.
People are able to increase the ways in which they create wealth. It also has a ripple effect. When one technological change occurs, it changes how we live. With the integration of technology, societies evolved from traditional hunting and gathering to industrialized. So that fewer people are growing crops and more are moving into other industries.
Almost every industry, such as aviation, education, or the medical field, have been improved by technological change. Think about how you are learning this very lesson today. How would students have obtained this information 50 years ago?
As technology changed over time, so too did our role in society. We are less self-reliant today, as we rely more and more on technology than our ancestors did.
In the dynamic changing world where the technology upgradation is held on daily basis, it leads to negative affects on value of the workers and their associated work culture wherein they live and sustain their earnings. Increasing automation leads to less manpower engagement.
*The impact of rapid technological change on sustainable development:
-Recent decades have seen a dramatically accelerating pace in the development and adoption of new technologies, even though various gaps persist in terms of adoption in different parts of the world, especially in the least developed countries. This rapid technological change is affecting almost every area of the economy, society and culture.
-Rapid technological change involves, among others, technologies like big data, the Internet of things, machine learning, artificial intelligence, robotics, 3D printing, biotechnology, nanotechnology, renewable energy technologies, and satellite and drone technologies. These represent a significant opportunity to achieve the 2030 Agenda and the Sustainable Development goals.
-At the same time, rapid technological change poses new challenges for policymaking. It can outpace the capacity of Governments and society to adapt to the changes that new technologies bring about, as they can affect labour markets, perpetuate inequalities and raise ethical questions.
-This paper responds to General Assembly resolution 72/242, which requests that CSTD, through the Economic and Social Council, to give due consideration to the impact of key rapid technological changes on the achievement of the Sustainable Development Goals.
-CSTD seeks to deepen the understanding of the impact of rapid technological change on sustainable development, especially the consequences for the central principle of the 2030 Agenda of leaving no one behind, and the implications for the science, technology and innovation community.
-It examines the opportunities, risks and challenges brought about by rapid technological change and looks at the role of science, technology and innovation (STI) policy.
-It identifies strategies, policies and immediate actions to take to use science, technology and innovation to empower people, especially those who are vulnerable, and ensure inclusiveness and equality.
2. Globalization : Globalization means the speedup of movements and exchanges (of human beings, goods, and services, capital, technologies or cultural practices) all over the planet. One of the effects of globalization is that it promotes and increases interactions between different regions and populations around the globe.
*How globalization works:
Globalization is driven by the convergence of political, cultural and economic systems that ultimately promote -- and often necessitate -- increased interaction, integration and dependency amongst nations.
*There are three types of globalization:
It's important to note that all the types influence each other. For example, economic globalization is made possible by certain liberal trade policies that fall under the category of political globalization. Cultural globalization is also affected by policies passed in political globalization and is affected by economic globalization via the imports and exposure a culture has to other cultures through trade.