Science of Inequality

Extreme Events, Resilience, and Uncertainty

Roger D. Jones

Center for Complex Systems and Enterprises

Stevens Institute of Technology

Hoboken , NJ USA

jones@xevents.com

What are the right questions?

1

Income Inequality in the Last 100 Years in the U.S.

2

Note that income inequality was as high as it is today in the 1920s. It reached its bottom in the 70s.

U.S. Has Highest Inequality, But Only After Taxes (Gini Index)

3

But … it is part of the American mythology that everyone has the opportunity to be rich.

Intergenerational Mobility

4

Unfortunately, the poorest regions of the country are the least mobile. Inequality seems to be associated with lack of mobility.

The Great Gatsby Curve

5

Causes of Inequality (Piketty)

Technology has eliminated mid-level jobs. What was left was demand for either highly-skilled technically-trained workers or low-skill, lowly-paid laborers.

At pay-setting organizations like banks and large corporations, “Above a certain level it is very hard to find in the data any link between pay and performance.”

Laxity in corporate governance

My own opinion is that the second two causes are probably consequences of the first. From my own experience managing companies I can say that Senior Managers take credit for any success, whether they are responsible or not.

Productivity: Be Careful What You Wish For6

Increased productivity requires skilled highly paid workers.

The new market place requires skilled creative cooperation and competition

Matisse and Picasso

9

Steve and Bill

Unfortunately, this leaves many mid-level workers out because their skill sets did not keep up.

 

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