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Technology leads companies to, inevitably, eliminate the workers whose labor has been replaced by a more efficient process in order to remain competitive in their markets. businesses worked the same number of labor hours (194 billion) in 2013 as in 1998, yet productive output increased 42 percent over that same time frame. However, income inequality goes hand in hand with wealth inequality, as excess income allows one to invest in other capital, such as stocks and bonds, leading to the accumulation of wealth. Thus, these workers’ income has dropped to zero, forcing them into other lower-skill industries, such as food and restaurant services, that already have an ample supply of workers and thus driving wages downward.
By 1999 this number grew to $35,864, which is a small increase.
In that same span of time the average annual compensation of the top one hundred CEO's went from $1.3 million to $37.5 million.
These factors of production include physical holdings (land, money) as well as intangibles (labor time, creativity).
If an entrepreneur or inventor can successfully develop and market a desirable invention, the market will reward him/her by offering tremendous profits.
This spring the Minneapolis Fed held its 27th Annual Student Essay Contest, which is open to all high school students in the Ninth Federal Reserve District.
The contest drew 269 essays from schools throughout the district. Other top essays can be found at under the Student Resources section of the Community & Education tab. The third-place winner received an additional 0, and the second-place winner an additional 0.In every society there will be those who are better off than others.There are people who are poor and people who are rich. The American way of life for a long time was to have a society where the majority of the people are not poor or extremely rich, but rather in a middle class.Additionally, rapid globalization, enabled by advances in technology in transportation and communication, has opened up cheaper foreign labor markets for U. companies, further eroding the domestic manufacturing base. “Tech Leaps, Job Losses and Rising Inequality.” 3 (12). Applying technology to the economy thus creates both “winners” and “losers.” It enables entrepreneurs and inventors, people with natural creativity and determination, to have the chance for great profits. merriamwebster.com/dictionary/luddite 2 Porter, Eduardo. Note that this unequal distribution of income is not necessarily a bad thing for the economy—in fact, the U. government openly supports new innovation by offering patents through the Patent and Trademark Office, thereby granting a (time-limited) legal monopoly (and the monopoly profits that follow). While the number of manufacturing jobs has decreased from 1990 to 2013, the number of food and restaurant service workers has increased from 6545.3 to 10487.1 (in thousands) during that same time period. But once an inventor earns these large incomes, the wealth inequality over others is unlikely to dissolve easily. “Manufacturing Globalization: The Real Sources of U. Inequality and Unemployment.” Council on Foreign Relations. foreignaffairs.org/articles/north-america/2011-11-01/manufacturing-globalization 16 See Rotman. As technology is applied to skilled jobs (which are already high paying), the productivity of those workers increases and their income increases too, further extending the income inequality between skilled and unskilled laborers. However, not everyone benefits from advances in technology; laborers whose jobs can be substituted by technology are negatively affected. There is a “snowballing effect on wealth distribution: top incomes are being saved at high rates, pushing wealth concentration [further] up,” perpetuating the cycle of inequality. While by no means will every inventor “strike gold” with his/her invention (in fact, most do not succeed), a skilled and lucky few will reap tremendous income; thus, propelling them into the highest echelon of income.