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The New Gilded Age

May 5th, 2014 by ProOrbis

In a New York Review of Books, Paul Krugman details the findings of economist Thomas Piketty’s recent book, Capital in the Twenty-First Century. In the book, the Paris School of Economics professor describes the rise of the second Gilded Age, which is characterized by the rise of the “one percent” and backed by careful documentation and pioneering statistical techniques that track the concentration of income and wealth deep into the past. Piketty’s research shows that income from capital as opposed to earnings dominates the top of the income distribution and that unequal ownership of assets rather than pay is the prime driver of income disparities. However, in the US, Picketty does note that the increase of wage income at the top of the income distribution has also surged: real wages for most US workers have increased little since the 1970s, but wages for the top one percent of earners have risen by 165%. Wages for the top 0.1% have risen by 362%, indicating a significant rise in “supersalaries.” Picketty’s analysis concludes with historical and current observations on the linkages between wealth accumulation and public policy, calling for a reassessment of wealth taxes to curb the trend toward greater global inequality.

As part of ProOrbis’ Thought Leadership practice, ProOrbis evaluates global macroeconomic trends that not only impact individuals but also have implications for the human capital stocks of cities, regions and nations.  Consistent with Piketty’s work, ProOrbis’ studies have also concluded that a critical source of the wealth disparity is tied to asset ownership, among other factors. Stay tuned for ProOrbis’ latest Thought Leadership, including speeches by ProOrbis’ Principal, panel discussions and publications further discussing the results of its macroeconomic study initiative, New Perspectives on Human Capital Productivity in the 21st Century.

 

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