Should-Read: Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez and Gabriel Zucman: Inequality is not inevitable–but the US ‘experiment’ is a recipe for divergence

Should-Read: Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez and Gabriel Zucman: Inequality is not inevitable–but the US ‘experiment’ is a recipe for divergence: “Income inequality has increased in nearly every country around the world since 1980–but at very different speeds…

…It is possible for institutions and policymakers to tame the unequalising forces of globalisation and technological change. And it is also possible to unleash those forces with renewed vigour, as in the case of the latest US tax plan. In 1980, both sides of the Atlantic showed similar levels of inequality. Since then, however, the gap between the richest and the rest has surged in the US, while in western Europe it has increased only moderately. In both regions, the top 1% of adults earned about 10% of national income in 1980. Today that cohort’s share has risen modestly to 12% in western Europe, but dramatically to 20% of all income in the US…. This boomtime at the very top has not benefited the rest of the American population in any measurable way…. What explains this dramatic divergence? The US has experienced a perfect storm of radical policy changes which have all contributed to this surge in inequality…. Many observers have been quick to blame globalisation, China and technology for the stagnation of working-class wages in the US. But… the US has run a unique experiment since the 1980s–and the results have been uniquely disastrous. Bad policy can have a real impact on millions of lives, for decades. But what governments have done, they can still undo…