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Thursday, December 17, 2015

America’s Great Divide: How the U.S. Transformed Into a 'Dual Economy' and What Can Be Done to Reverse It

Common to developing nations, a dual economy is taking root in the U.S. MIT economist Peter Themin explains how this happened and what can be done to stop it.

In the America of haves and have-nots, fewer folks are “movin’ on up” like George Jefferson of the classic sitcom. In a new paper for the Institute for New Economic Thinking, Peter Temin, MIT economist and economic historian, breaks down how it happened and where we’re headed with a powerful model first used by West Indian economist W. Arthur Lewis, the only person of African descent to win a Nobel Prize in economics. Dual economies are common in less developed countries, but Temin argues that America has now diverged into a top thirty percent, where children receive excellent educations and grow up to work in sectors like finance, technology and electronics industries (FTE)— and then there’s the rest, the low-wage folks who live paycheck to paycheck and whose kids have little hope of joining the lucky ones at the top. Temin explains what drives the dual economy, what race has to do with it, how children are hurt, and why our political system can’t seem to fix anything. *This post originally appeared on the blog for the Institute for New Economic Thinking.



Anonymous said...

More leftist BS.

Anonymous said...

Not necessarily. I'd like to read the entire paper before making a judgment. We all know there's a growing divide, since tbe middle class is disappearing. Some may make it into the "upper" class...but too many are inexorably sliding towards poverty.

A family that lives within its means, can still face poverty even with a stable income. As wages stagnate, more and more take home pay is eaten up by the normal household bills, which increase at a rate much higher than wages. Eventually heat, taxes, insurance, groceries and so on, become unaffordable without making hard choices affecting one's quality of life.

And that is what poverty is.

Anonymous said...

This is the result of policies put in place over 30 years ago, called the Reagan revolution. To squash the unions (basically get rid of blue collar jobs)and move the money to the wealthy at the top. It took some time, but here it is.