No one in Washington is talking about America’s most fundamental economic problem, said Chrystia Freeland. That problem is income inequality—the growing chasm between the wealthy and the middle class. The top 1 percent of earners now take home more than 18 percent of national income—a startling increase from 1973, when the rich’s share of income was 7.7 percent. Why is so much wealth being concentrated at the top?
Few like to admit it, but globalization and technology have triggered an economic revolution that’s “hostile to the middle-class majority.” Our new economy benefits a fairly small class of people—those who run companies, technologists, engineers, and Wall Street traders, whose salaries have soared. Meanwhile, jobs that once sustained the middle class—from manufacturing to a growing number of white-collar jobs—can be done more cheaply by machines or workers in India and China.
As Republicans and Democrats battle over less important issues, this is the elephant in the room. “Someone needs to admit that modern capitalism isn’t working for the middle class, and find a way to make it work better, before it is too late.”