One-quarter of American workers make less than $10 per hour, which creates an income below the Federal poverty level. These are the people who wait on you every day: cashiers, fast food workers and nurse's aides. Or maybe they are you.
Meanwhile, the top 10% of earners took home 50% of all income in 2012. That's the highest percent in the last 100 years, when the government began collecting income data. The top 1% took home 20% of the income, according to a study by economists Emmanuel Saez and Thomas Piketty. Everything has been blamed from cheap labor in China, unfair exchange rates and Wal-Mart to outsourcing, greedy corporate executives and illegal immigrants.
Many of the causes of income inequality in the U.S. can be traced to an underlying shift in the global economy. Emerging markets, such as China, Brazil and India, are seeing an increase in their income as they become more competitive in the global marketplace. Their work forces are becoming more skilled, and their leaders are becoming more sophisticated in managing their economies. As a result, wealth is shifting to them from developed countries, such as the U.S.
This shift is about lessening a global income inequality. The richest 1% of the world's population has 40% of its wealth, and 25% of that wealth is held by Americans. China, on the other hand, has 22% of the world's population but only 8.8% of its wealth, while India has 15% of its population and 4% of its wealth.
Trying to prevent U.S. companies from outsourcing will not work because it is punishing them for responding to a global redistribution of wealth. Neither will protectionist trade policies or walls to prevent illegal immigrants. The U.S. must accept that a global wealth redistribution is occurring. Those in the top fifth of the U.S. income bracket must realize that those in the bottom two-fifths cannot bear the brunt indefinitely. Changes in tax policies, access to education and employment training should be planned for now so that the transition is gradual and healthy for the economy overall