Mr Khan said:
The income gap's grown the last two decades. The stock market has recovered drastically since 2009, but where are the jobs? The top earners are maximizing profits while forcing everyone else a rung or two down the income ladder, with predatory hiring practices like calling 2-3 years experience "entry level." (which should be illegal) |
I haven't seen any studies associated to this but I suspect that unreported inflation results in increases of income inequality ...
People who earn less generally have less control over the amount of money they earn. Most high income people have some direct control over their income, middle income people tend to have indirect control over their income, and low income people have very limited control over their income. Hypothetically speaking, if you have reported inflation at 3% when real inflation is at 9% the low income people will likely be getting wage increases at (roughly) 3%, middle income people will be able to negotiate a (roughly) 6% wage increase, and high income people may be able to negotiate 9% (or more).
Essentially, in my current position I can (and probably will) leave my current job because I can earn 10% to 20% more per year than I currently do because my wage has not kept up with inflation; and my company would be forced to match that to keep me or find a replacement (indirect control). If I was a contractor I would be earning far more and also be able to control my income directly by increasing my rates. In contrast, if I was a lowly janitor working for minimum wage getting the company to give me a cost of living increase would be difficult because they could easily find someone else to do the job for exactly what they were paying me.
