YUAN & FAREWELL: WHY MONEY HASN'T CHANGED THE STANDARD OF WELFARE IN CHINA.
Here’s some data on Chinese incomes:
That means the migrant worker population (almost as large as the US population) got roughly a 15% pay increase last year in real terms. Have so many people gotten so much richer in such a short time in all of human history? I doubt it, although you could argue that human welfare increased even faster in the early 1980s, after Deng freed up Chinese agriculture. Why will this story receive little attention in the press?
3. There’s no such thing as good news.
4. It’s a contrarian story that doesn’t fit the dominant narrative.
5. People don’t believe the story is true.
The world is rapidly transitioning from a place where residents of rich countries can’t even comprehend the way of life in poor countries, to one where people will all live recognizably similar lives. The current inequality trends in the US look bad, but it wouldn’t surprise me if we saw a reversal in those trends as well. The entire world is evolving toward a near 100% service economy in terms of jobs (not output.) I can’t imagine why low-skilled workers would not be able to do the “jobs of the future,” (which will be serving others) but perhaps I’m missing something. I’m more worried about my job being replaced by the Khan Academy. I suppose the big public policy issue will be deciding who should get to allocate all the wealth that will be accumulated by those with great ideas (or rents.) Should the government or the wealthy get to decide which charities are most deserving?
Consumption inequality won’t be a big issue, especially if there are luxury taxes on big houses, yachts and private jets. Bill Gates doesn’t need 750 washing machines.
HT: Free Exchange