Earlier, I explained why ‘Joe’ losing his job was a good thing.
I won’t recap the utilitarian rant here as you can simply read it and the accompanying commentary from FT’s Rana Foroohar for yourself, but I do want to draw your attention to a visual that illustrates precisely what I was trying to convey.
Have a look at this from Barclays:
See that giant spike in the middle? Yeah, so that’s (and I’m oversimplifying here) people living in emerging markets experiencing a 50%+ increase in real income between 1988 and 2008. See that dramatic dip? Yeah, that’s middle class folks in Western democracies seeing their incomes stagnate over the same period. Here’s Barclays:
Economists Branko Milanovic and Christopher Lakner, among others, point to the stagnation of middle-class incomes in advanced economies during the 20 years of intense globalisation from 1988 to 2008. Figure 6 reproduces their “elephant” chart of 20-year income gains by global income percentile.
And yes, the spike at the end of the chart shows a dramatic rise in real income growth for the “global elites”. Is that evidence of a nefarious attempt on the part of those “global elites” to keep the downtrodden masses underfoot? Well if it is, don’t tell all of those people in the middle of the chart who in some cases saw their incomes grow faster than the elites and who were able to “move from rural to urban areas” (read: escape abject f*cking squalor for life in rapidly industrializing urban centers) thanks to those global elites’ control of the supply chain.
See this is the same argument: people in emerging economies were able to, for all intents and purposes, become part of the modern world as their real incomes sky rocketed thanks to rapid globalization. Meanwhile, the “poor” old middle class in advanced economies has had to “squeak by” (that’s sarcasm) on their stagnant yearly income which, by the way, is still [fill in exponent]-times larger than what people make in emerging economies even after taking into account that period of 50%+ growth.