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Income Polarization of the U.S. Working Class: An Institutionalist View

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  • Kosta Josifidis
  • Novica Supic

Abstract

We provide an institutional insight into the trend of income polarization within the U.S. working class. In contrast to the previous industrial waves, the current and ongoing industrial revolution is characterized by the replacement of “creative destruction” with jobless growth. Instead of replacing the lost jobs with new ones, new disruptive technologies eliminate more jobs in traditional labor and capital-intensive sectors than create jobs in new idea-intensive sectors. By examining the relationship between the income share of the bottom 50 percent, the middle 40 percent, and the top 10 percent and technological progress, we obtain robust econometric results. According to our results, the income polarization among U.S. workers can be associated with the shift of R&D activities from the public to the corporate sector. The concentration of innovations by corporate capital limits the power of society to reduce inequality and to provide greater social stability through “the incredible productivity” of technological progress.

Suggested Citation

  • Kosta Josifidis & Novica Supic, 2018. "Income Polarization of the U.S. Working Class: An Institutionalist View," Journal of Economic Issues, Taylor & Francis Journals, vol. 52(2), pages 498-508, April.
    • Handle: RePEc:mes:jeciss:v:52:y:2018:i:2:p:498-508
    DOI: 10.1080/00213624.2018.1469929
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    Cited by:

    1. Yang Shen & Xiuwu Zhang, 2024. "The impact of artificial intelligence on employment: the role of virtual agglomeration," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    2. Thomas E. Lambert, 2020. "Monopoly capital and innovation: an exploratory assessment of R&D effectiveness," International Review of Applied Economics, Taylor & Francis Journals, vol. 34(1), pages 36-49, January.
    3. Yang Shen, 2024. "Future jobs: analyzing the impact of artificial intelligence on employment and its mechanisms," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-33, April.
    4. Kosta Josifidis & Novica Supic, 2020. "Innovation and Income Inequality in the USA: Ceremonial versus Institutional Changes," Journal of Economic Issues, Taylor & Francis Journals, vol. 54(2), pages 486-494, April.

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