archon fung - why has inequality grown in america? what should we do?
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Occupy Harvard Teach-In 12/7“Why Has Inequality Grown in America? What Should We Do?”Archon Fung, Ford Foundation Professor of Democracy and Citizenship and Co-Director of Transparency Policy Project, Kennedy School of Government, Harvard UniversityTRANSCRIPT
American Inequality:How Did We Get Here andWhat Can We Do About it?
Archon FungHarvard Kennedy School
#OccupyHarvard Teach-In
December 7, 2011
Thursday, December 8, 11
Thursday, December 8, 11
Three Questions
• How F**ked Up Is It?
• How Did It Get to Be So F**ked Up?
• What Can We Do About It?
Thursday, December 8, 11
How F**ked Up Is It?
Thursday, December 8, 11
Very.
Thursday, December 8, 11
$2M
$1.5M
$1M
$0.5M
AVERAGE HOUSEHOLD INCOMEbefore taxes
2007 dollars. Source: Congressional Budget Office
‘79 ‘83 ‘87 ‘91 ‘95 ‘99 ‘03 ‘07COURTESY OF:
BASED ON GRAPHS BY:
top 1%
top 20%
second 20%
third 20%
fourth 20%
bottom 20%
Thursday, December 8, 11
Source: Congressional Budget Office, 2011
Growth in After-Tax Income, 1979-2007
Thursday, December 8, 11
Top 1% Share, 1960-2007
Thursday, December 8, 11
Distribution of Wealth
Thursday, December 8, 11
Distribution of Wealth
■
■
■
■
■
Source: Michael Norton and Dan ArielyThursday, December 8, 11
0
15,000
30,000
45,000
60,000
75,000
90,000
105,000
120,000
1945 1955 1965 1975 1985 1995 2005
($ 2
006)
GDP / Family
Median Family Income
Who Eats The Pie?
Thursday, December 8, 11
Text
Source: Mother Jones MagazineThursday, December 8, 11
How Did It Get So F**ked Up?
Thursday, December 8, 11
Economics
Thursday, December 8, 11
Economics
Thursday, December 8, 11
Economics
Thursday, December 8, 11
Politics!
Thursday, December 8, 11
Dominant Explanation
Skills Biased Technological Change
Thursday, December 8, 11
Thursday, December 8, 11
But...
Thursday, December 8, 11
Mechanism for top 1% may be very different
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Who Is Top 1%?
0
10
20
30
40
1979 1993 1997 1999 2001 2002 2003 2004 2005
Composition of Top 1%
Executives, managers, supervisors (non-finance)MedicalFinancial professions, including managementLawyersComputer, math, engineering, technical (nonfinance)
Source: Source: Mike Konzcal via New York TimesThursday, December 8, 11
Executive Compensation
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SBTC Should Be Global
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Top 1% in Anglo CountriesFigure 4. Plutonomy At Work: The Income Share of the Top 1% Has Risen Dramatically Since the Late 1970sin the U.S., the U.K., and Canada
5
7
9
11
13
15
17
19
60 63 66 69 72 75 78 81 84 87 90 93 96 99 025
7
9
11
13
15
17
19
USAUKCanada
Income Share of the Top 1%
Please see references 18, 4, 22 in the bibliography at the end of the report for the data underlying the chart. Estimates based on tax return data.Source: Citigroup Investment Research
Figure 5. Of Egalitarian Bent: The Income Share of the Top 1% Is Much Smaller and Is Not Rising as Much, Ifat All, in Switzerland, the Netherlands, Japan, and France
5
7
9
11
13
15
17
19
60 63 66 69 72 75 78 81 84 87 90 93 96 99 025
7
9
11
13
15
17
19
SwitzerlandFranceJapanNetherlands
Income Share of the Top 1%
Please see references 7,17,15,4 in the bibliography at the end of the report for the data underlying the chart. Estimates based on tax return data.Source: Citigroup Investment Research
See Figures 6 thru 11 for a panorama of plutonomy and egalitarianism.
6
Source: CitiGroup Investment ResearchThursday, December 8, 11
Top 1% Elsewhere
Figure 4. Plutonomy At Work: The Income Share of the Top 1% Has Risen Dramatically Since the Late 1970sin the U.S., the U.K., and Canada
5
7
9
11
13
15
17
19
60 63 66 69 72 75 78 81 84 87 90 93 96 99 025
7
9
11
13
15
17
19
USAUKCanada
Income Share of the Top 1%
Please see references 18, 4, 22 in the bibliography at the end of the report for the data underlying the chart. Estimates based on tax return data.Source: Citigroup Investment Research
Figure 5. Of Egalitarian Bent: The Income Share of the Top 1% Is Much Smaller and Is Not Rising as Much, Ifat All, in Switzerland, the Netherlands, Japan, and France
5
7
9
11
13
15
17
19
60 63 66 69 72 75 78 81 84 87 90 93 96 99 025
7
9
11
13
15
17
19
SwitzerlandFranceJapanNetherlands
Income Share of the Top 1%
Please see references 7,17,15,4 in the bibliography at the end of the report for the data underlying the chart. Estimates based on tax return data.Source: Citigroup Investment Research
See Figures 6 thru 11 for a panorama of plutonomy and egalitarianism.
6
Source: CitiGroup Investment ResearchThursday, December 8, 11
Political Causes
• Executive compensation policies
• That tie exec incomes to stock markets
• Deregulation of financial sector
• Tax policy (esp. capital gains and corporate tax)
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What Can We Do?
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Strategy 1
Social Democracy:Effective Demand
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Policies
• Tax and Transfer
• De-commodification
• social wages
• health care
• pensions
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Thursday, December 8, 11
Thursday, December 8, 11
Strategy 1I
Productive Democracy:Effective Supply
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Modes of ProductionLow Road High Road
Price Competition Value Competition
Sweated Labor Good training & equipment
Poor Labor Relations Productivity Partnerships
Economic Insecurity Continuous improvement
Minimal state Rich public goods
Rising inequality Higher worker incomes
Source: Joel Rogers, University of WisconsinThursday, December 8, 11
Public Policy
“Help pave the high-road, block off the low road”
Thursday, December 8, 11
Industrial Policy
• Real, relevant training
• Aligned standards
• Deliberative spaces for employers, workers, communities, governments to form productivity partnerships
• Even playing field for workplace governance
Thursday, December 8, 11
Time to get to work.
Thursday, December 8, 11
Occupy the truth.
Thursday, December 8, 11
Educate.
Thursday, December 8, 11
We have real choices.
Thursday, December 8, 11
Occupy the future.
Thursday, December 8, 11