Silicon Valley Made a Bunch of Dudes Billionaires, But It’s Making You Poorer

<a href="http://www.shutterstock.com/gallery-2324765p1.html">GaudiLab</a>/Shutterstock

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


First the tech industry made your life easier with iPhones, tablets, and smart-everything. But is it also making it harder for you to get ahead?

A recent study on global income inequality by the International Monetary Fund identifies technological change as a top factor driving the split between rich and poor worldwide. Specifically, the study’s authors found that the growth of technology accounts for nearly one-third of the widening gap between the top 10 percent and bottom 90 percent over the past quarter century. Other factors include the globalization of trade and finance.

Here’s how tech has contributed to widening the gap: It’s eliminated jobs by automating tasks, and it’s driven up the “skill premium,” meaning jobs that require skills like coding pay more lucratively than traditional blue-collar jobs. But even tech workers aren’t safe, because their industry’s needs evolve so quickly that they may be made obsolete by the very advancements they’re working toward. In the end, the jobs that pay the most are only for those who can keep up with the changing times, and those who can afford the required education to get a position in the first place.   

The study notes that technological change has contributed most to rising income inequality in the 39 OECD countries that make up 80 percent of global trade and investment. It finds that inequality has grown the most in the United States and the United Kingdom, even as poverty in emerging economies has decreased.

Education hasn’t alleviated income inequality as much as it could, according to the study. Despite a notable rise in highly-educated workers, the wage gap between high- and low-skilled workers remains. The researchers suggest that education is a viable solution only if governments invest it and make it affordable. “What we find really is that raising income shares of the rich doesn’t trickle down,” says Era Dabla-Norris, the study’s lead author and a researcher at the International Monetary Fund. “And raising the income shares of the poor and middle class is actually good for growth.”

And while other studies have found links between housing costs and venture capital investment, high levels of innovation, high concentrations of high-tech industry and venture capital startups (looking at you, San Francisco), the issue of inequality is a complex one. “There are some common drivers across the world, but the drivers vary,” Dabla-Norris says. “Policies to alleviate inequality have to be country-specific; there is no one-size-fits-all.”

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate