Question

In: Economics

Why The Inequality Gap Is Growing Between Rich And Poor.

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:

  1. Technological Change

  2. Globalization

  3. Rise of Superstars

  4. Falling Labor

  5. Seizing Advantage


Solutions

Expert Solution

*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:

  • Invention - the creation of a new product or process
  • Innovation - the application of the invention for the first time
  • Diffusion - how fast others begin to adopt the innovation

*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:

  • Creates new products and processes

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.

  • Increases efficiency, lower costs

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.

  • Helps economies evolve

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?

  • Decreases self-reliance

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.

  • Negatively affects the value of workers

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:

  1. Economic globalization. This type focuses on the unification and integration of international financial markets, as well as multinational corporations that have a significant influence on international markets.
  2. Political globalization. This type deals mainly with policies designed to facilitate international trade and commerce. It also deals with the institutions that implement these policies, which can include national governments as well as international institutions, such as the International Monetary Fund and the World Trade Organization.
  3. Cultural globalization. This type focuses on the social factors that cause cultures to converge -- such as increased ease of communication and transportation, brought about by technology.

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.


Related Solutions

Article Why Are the Poor Poor? Explanations of poverty, like explanations of inequality in general, differ...
Article Why Are the Poor Poor? Explanations of poverty, like explanations of inequality in general, differ in several ways. They may focus on individuals or on social structures. They may interpret poverty as inevitable—perhaps even necessary—or as the product of the efforts of the powerful and wealthy to protect their own inter- ests. Let’s look at some of these explanations, keeping in mind that despite their differences, each may contain elements of validity and therefore may offer at least a...
Explain reasons why the inequality gap between educated and less-educated workers has been widening
Explain reasons why the inequality gap between educated and less-educated workers has been widening
Why is there growing inequality of wealth, and why should we be concerned? What are the...
Why is there growing inequality of wealth, and why should we be concerned? What are the adverse consequences of growing inequalities (as related to cash versus in-kind transfers)?
Consider the following quote from chapter 14 of the eText: ”The gap between the rich and...
Consider the following quote from chapter 14 of the eText: ”The gap between the rich and poor in the United States …has been widening for some time. In recent years, the gap has been the widest since our government began to keep records on it in 1947”. For example, one report states that: “Since 2009, 95% of U.S. economic gains have gone to the wealthiest 1% of the population” (“Income Inequality: Why Does the Gap Keep Widening?” The Week Feb....
There has been an increase in the wage inequality (gap between the skilled and unskilled wage)...
There has been an increase in the wage inequality (gap between the skilled and unskilled wage) in the U.S. over the last 30 years. Can international trade be a cause of the rising inequality? Explain by appealing to the theories of trade that you have learnt in class. What do you think is the most plausible explanation for the rising inequality
How does the internet revolution exacerbate the difference in life chances between rich and poor in...
How does the internet revolution exacerbate the difference in life chances between rich and poor in the United States? What is the personal responsibility and work opportunity reconciliation Act, and what impact has it on welfare and social services in the United States
Select an oil-rich and oil-poor country in the region and discuss the differences between their economies,...
Select an oil-rich and oil-poor country in the region and discuss the differences between their economies, government, and role in global geopolitics.
Should we tax the rich more and give to the poor? Why should we tax the...
Should we tax the rich more and give to the poor? Why should we tax the rich more or why not give examples? What is the outcome of taxing the rich more or staying the same? With references please!
Why are some countries poor and others are rich? assignment asks you to look for your...
Why are some countries poor and others are rich? assignment asks you to look for your own answer that is not purely based on economics. Of course, in a 3-paragraph essay, However, take a leap: Please identify one historical and/or political factor that you think might explain the differences between people's lives in Denmark and people's lives in Bolivia. One of these countries is rich and the other is poor. Why? What factor has been responsible?
According to the Fisher model, why would a person who is rich today and poor tomorrow...
According to the Fisher model, why would a person who is rich today and poor tomorrow prefer having a financial market over not having one? State all (relevant) necessary assumptions you make for your argument.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT