Friday, June 22, 2007

Inequality to be caused by policy (fg)

Two economists, Frank Levy and Peter Temin, found out that the combination of large inequalities and stagnant wages for many workers – creates its own “soft” inefficiencies as people become disenchanted with existing economic arrangements. Furthermore, they analyzed U.S. federal tax policy and they show that stagnant net wages stem from asymmetric tax cuts. This stands augments the picture of many economists who attribute the average worker’s declining bargaining power to skill-biased technical change – technology, augmented by globalisation, which heavily favours better-educated workers

Accoring to them,
The last six years of U.S. federal tax history have involved an inhospitable politics in which winners have used their political power to expand their winnings.