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Income Inequality, Social Mobility & Class Conflict

How has income inequality changed recently?
Why has this happened?
Discuss the associations between social mobility, class conflict, and income inequality.

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Interesting question! Let's take a closer look. I also attached a supporting article, form which this response is drawn, at least in part.

RESPONSE:

1. How has income inequality changed recently? Why has this happened? Discuss the associations between social mobility, class conflict, and income inequality.

Recently, and over the past four decades, overall income inequality has increased in the U.S. One particular feature of the data is that the income gap has widened most between the top and the middle of the distribution, while it has remained relatively stable between the middle and the bottom. The causal forces behind the increase in inequality have been a topic of much debate among the public, the media, and policymakers (see, for example, Yellen 2006, in http://www.frbsf.org/publications/economics/letter/2007/el2007-28.html), as well as research for economists.

Why has this happened?

Economists have pointed to three particularly important drivers of the recent trends in income inequality: offshoring and immigration, both of which are related to globalization trends, and technological advances that favor skilled workers (often referred to as "skill-biased technological change" or SBTC). Offshoring could help explain the stagnation of wages at the middle of the income distribution (working class) while immigration could push down wages at the bottom. SBTC (upper class) could help account for the surge in income at the top of the distribution (http://www.frbsf.org/publications/economics/letter/2007/el2007-28.html). In other words, class conflict theorists would argue that the bourgeoisie are controlling most of the top high paying jobs, whereas the working class (lower and middle class) are fighting for scare resources, and have remained fairly ...

Solution Summary

This solution discusses how income inequality has changed recently, and why this has happened. It also discusses the associations between social mobility, class conflict, and income inequality. Supplemented with an informative article on social inequality.

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