Earlier this year, Oxfam reported that the world’s eight richest people control roughly the same amount of wealth as the bottom half of the world’s population. Around the same time, the World Economic Forum identified income inequality as the most challenging problem the world faces today. It is an issue that has been discussed for decades, but in the wake of political upheaval in the U.S. and Europe from voters hurt by globalization, there is more intense interest in creating a less polarized distribution. In this interview, Nobel Laureate Robert Shiller of Yale and Wharton finance professor Jeremy Siegel discuss how the income distribution gap became so wide, and they offer possible solutions. Shiller also notes that one of the big challenges to future income levels may be artificial intelligence and robots, and he suggests some ideas on how to prepare for that eventuality.
Knowledge@Wharton: The topic of income and wealth inequality has gotten a lot more attention since the Great Recession began in 2008, which was followed by one of the slowest economic recoveries in modern times. The Great Recession just made the statistics about income and wealth inequality even more skewed. The topic then seemed to go mainstream this year when the World Economic Forum at Davos noted that rising income and wealth inequality could be the most significant trend in world economic development over the next 10 years. Their report had input from 700 experts. So there is more agreement today on the size and importance of this challenge.
Nobel Laureate Robert Shiller and Wharton finance professor Jeremy Siegel discuss possible solutions to the growing problem of income inequality.