By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
At the Upshot over the weekend, Tyler Cowen writes that Americans’ view of income inequality is too narrowly nationalistic. Instead, he says, we should “preface all discussions of inequality with a reminder that global inequality has been falling and that, in this regard, the world is headed in a fundamentally better direction.” Basically, rising incomes in growing economies like China and India should outweigh the inequality concerns of countries (like the U.S.) where increasing exports are causing incomes at the top to rise. “While Chinese growth has added to income inequality in the United States, it has also increased prosperity and income equality globally,” he says.
Coming data on same-store sales will help illuminate whether the modest upward tick in prices is something that is being replicated throughout the economy and signalling a stronger overall economy or perhaps one that remains more weighted to the most wealthy in the United States. According to Thomson Reuters data, Costco is poised to post the strongest same-store sales figures among the retail chains, though its 4.6 percent estimated increase would fall short of the 5 percent rise a year ago. The figures have a bit less utility than in the past given the likes of Wal-Mart stopped supplying this data years ago, but you work with what you have. Either way, it's notable that the discounters have been weak this year - a sign of lackluster spending outlooks for lower income Americans.
There are a lot of things that “explain” inequality. Technology, finance, societal, and cultural changes have all played their part. In this series, Counterparties takes a look at the various things that correlate with rising income inequality in order to ascertain how we got to this economy and where we might go from here. For story tips/comments/complaints email us at Counterparties.Reuters@gmail.com.