1. Global Labor Trends & Inequality
The World of Labor is changing rapidly, are you ready?

2. New Labor Trends
Over the past 15 years Labor has significantly changed
United States: ↓ Union power
↓ “Job Security” overall
↓ Manufacturing Jobs (blue collar)
↑ use of Automation (robots) & ↑ immigration
↑ Demand for Educated Workers (white collar)
↑ Women advancing in both education/income
↑ Income Gap (Rich & Poor)
Globally: Collapse of Soviet Union & Communist Economies
Signing of free trade agreements around world
China, India, Brazil emerge as new economic powers
European Union struggles with common currency & global competition

3. Income Distribution Free markets focus on EFFICIENCY not EQUALITY
United States has enormous wealth but tremendous inequality
record gap between the rich and poor

4. Top 1% real wages keeps rising faster

5. Numbers to know for Final Exam
47% of Americans pay
no federal incme taxes
(still pay social security,
Medicare & sales tax)
Top 1% keeps paying more!
Top 1% earns 19% Income
Pays 37% of income taxes

7. Falling Income of Low-Skilled
Low-Skilled Workers
Highly Educated Workers
Wages S
Wages S W1 W1 D D Q1
Quantity Q1
Quantity
Demand Falls:
outsourcing of jobs
automation
Supply Rises
↑ low skilled immigration
Demand Rises:
more technology jobs
automation required skilled workers
What is good about inequality?
=> Incentive to ↑ Human Capital

8. Reasons for rising inequality?

9. Why do a few get most of the MONEY?
Classroom Reading:
Why do a few get most of the MONEY?
Economic Theory on the
Distribution of Income

10. Winner Take All: Superstar Theory
Why Now?

11. Top 1% versus Top 0.1% Top 1%: Top 0.1%:
Income: Over $350,000 per year
1.5 million households
Top 0.1%:
Income: $1.4 million per year
Only 146,000 households

13. LeBron James signs lifetime contract

14. Technological Unemployment

15. Is this a problem?

16. Globalization
BENEFITS COSTS

17. Machines replace Workers

18. Entitlements & Income Distribution