The American Dual Economy

For decades there has been a growing inequality here in the US…..the old saying….”the rich get richer and the poor get poorer”…..is not just a cute slogan but a grown situation….

There has been some good research on this phenom…….

I describe the American economy in the twenty-first century as a dual economy in the spirit of W. Arthur Lewis. Similar to the subsistence and capitalist economies characterized by Lewis, I distinguish a low-wage sector and a FTE (Finance, Technology, and Electronics) sector. The transition from the low-wage to the FTE sector is through education, which is becoming increasingly difficult for members of the low-wage sector because the FTE sector has largely abandoned the American tradition of quality public schools and universities. Policy debates about public education and other policies that serve the low-wage sector often characterize members of the low-wage sector as black even though the low-wage sector is largely white. This model of a modern dual economy explains difficulties in many current policy debates, including education, healthcare, criminal justice, infrastructure and household debts.

If you would like to see where this research has gone then open the pdf and read the rest of the study…..

Source: Microsoft Word – Temin paper final.docx – delivery.php

More on the author of this paper……

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.

Source: There are two Americas entirely: How the U.S. became a “dual economy” — and what can be done to reverse it – Salon.com

Read the research and then tell me what you think needs to be done to find an equilibrium…..

My thought is that the “People’s Budget” would be that equilibrium…..as long as we will have yet another budget debate then why not look for a better answer to the growing problems of this country?

Source: FINAL FY16 Peoples Budget.pdf

I am sure there will those that dismiss this out of hand simply because in comes from progressives….that is moronic…..if it helps the people of this country it is worth a look and a debate…..

 

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7 thoughts on “The American Dual Economy

  1. I completely agree and although I’m part of the FTE economy, my views are very much low-wage sector rooted. So much of my time has been devoted to fighting the system of education I’m given for my daughter because I can’t afford the private schools required to keep her inside the FTE economy. Nothing, and I mean nothing, will change until we knock the top 30% off their politically created pedestal and start seeing Americans as Americans and they stop trying to get richer for the sake of getting richer. I don’t want to be rich, I just want to be comfortable and work to make sure my daughter has a better life than me because that is what any decent parent wants for their children. When she’s 10 and I don’t see a clear path for her to attend a decent college, there is a huge problem that needs to be fixed. The elite in this country has manufactured a system where a new generation has no chance to earn more than their parents did from the previous generation. We’ve allowed this country to be torn up from the inside.

  2. ‘Haves and have nots’ has been the situation in the UK since history was ever recorded. Despite advances after 1945, the situation remains essentially unchanged.
    Best wishes, Pete.

  3. The ‘People’s Budget’ would address inequality. Is there the will for it? Not from our wealthy elite leadership. The kindest thing you can say about them is that they live in rarefied bubbles. The people will need to demand this.

    1. Of course there is not demand….for the reason you stated and I agree the people need to wake up and take to the streets….chuq

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