passage from Hillbilly Elegy and labour share of income

Tara Thanh
Jul 25, 2017 · 3 min read

one of the passages that struck me the most in reading Hillbilly Elegy was the below. isn’t this why we have polar views? we are no longer united because we now bicker and resent each other, democrats vs republicans? we put our hates above working together. if we can’t repeal and replace obamacare, the vote is possibly to just repeal? what will that accomplish?

the passage below makes me think… how much have “we” as a country, failed so many people?

“as a culture we had no heroes… i doubt my neighbors could even name a high-ranking military officer. the space program, long a source of pride, had gone the way of the dodo, and with it the celebrity astronauts. nothing united us with the core fabric of american society. we felt trapped in two seemingly unwinnable wars, in which a disproportionate share of the fighters came from our neighborhood, and in an economy that failed to deliver the most basic promise of the american dream — a steady wage.”

Furthermore, this problem isn’t going to be solved any time soon, if the current economics condition continue. See this article on FT.
https://www.ft.com/content/d6181b88-6c95-11e7-b9c7-15af748b60d0

“The role of increasingly oligopolistic markets, with a small number of powerful companies having an ever larger market share, in holding down inflation is one that is puzzlingly overlooked.

A recent paper* by a team of academics largely from MIT and the National Bureau of Economic Research sheds some light on this issue.

Across every sector, bar finance, the study found that the labour share (as measured by the payroll to sales ratio) had fallen, in some cases sharply, since the turn of the century.

It also found that industry concentration in each of these sectors, defined as the market share of the largest companies, has risen inextricably since the 1990s, a trend the authors attribute to the fact that industries are increasingly characterised by a ‘winner takes most’ quality and strong network effects enjoyed by the likes of Google, Facebook and Amazon.”

So, what?

we are not united as a country. we remain divided in a winner-takes-most economy. the share of income goes to the largest companies or the richest of the rich. we cannot deliver on the promise of the american dream via steady wage. if the majority of americans do not see their share of income rise, they wouldn’t be able to afford higher priced products. low inflation will persist. i doubt if the FANGs of the world will help contribute to the “steady wage” situation.

i don’t have ideas for solutions, and this post is mostly repeating the mantras of issues we’re facing. though perhaps, it means we need new national heroes or causes we can all unite on, or policy makers to work together on the steady wage issue. that’d be a start. (If you’re going to point out “basic income” trials as the efforts to resolve the “steady wage” issue, let’s see if it has any traction).

But, aside from helping the rest of the nation with income disparity, would that really help us mend the divide?

We need national “heroes” we all can support. The country certainly discussed Trump less during the Eclipse of 8/21/17, that’s one day of reprieve from the divisiveness of this country. That’s something else.

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