Abstract
The topics of inequality in growth and unfair labor markets have been a part of the public chatter on both sides of the aisle. There is little doubt that the rich have become richer at the expense of the poor. Fiscal and public policy have played a part and that has been much discussed, including by the authors of this piece with the conclusion that there is room on the fiscal side of policy to close that gap, especially among the richer countries with vast resources.
As a sort of closing loop in all things policy, we believe it is important to study the effect of monetary policy and the state of the labor markets in defining inequality. In order to gain universal credibility, it is important to focus on both America and across the Atlantic. It is also important to view all sides of the story to get to a more objective conclusion.
Some indications point to an unhealthy presence of monopsony on a universal basis. There are also studies that clearly show the lack of labor market violations being tried as anti-trust cases. Some of the minorities are at a disadvantage both in terms of wages and job stability. On monetary policy, there is a distinct effect on the income and wealth of the different deciles under study. What is revealing is that these policies notwithstanding, the effect is disproportionately more intense on the lower income and wealth deciles relative to the upper echelon, leading to an even wider gap in terms of inequality.
What remains unanswered is whether poverty elimination and increasing inequality can coexist. Or, actually, should they?