In an interview with The Economist, President Obama outlined areas which Trump will need to address. He said Trump must work on “restoring faith in an economy where hhard working Americans can get ahead requires addressing four major structural challenges: boosting productivity growth, combating rising inequality, ensuring that everyone who wants a job can get one and building a resilient economy that’s primed for future growth.”
According to Newsweek, inequality, or pay disparity is the one area Donald Trump can make a difference. The gap between America’s rich and poor has been widening for decades. Research has shown that the top 1% of households received 20% more than all U.S income in 2013. Since the 1980s trickle-down economics has been popular. As it turns out, the top 1% does not trickle-down but instead stays in the pockets of the 1%.
The other factor that is widening the pay gap is America’s shrinking middle class. It has shrunk by 8.3% from the 70s. The Middle Class is important and has been described by critical by Greek philosopher, Aristotle. This is because it provides a buffer between rich and poor in the class struggle. Karl Marx predicted that the class struggle would eventually destroy capitalism.
As rich people get richer, they tend to save rather than spend. This causes economy, to take a hit and a host of other problems ensue. Rising unemployment, lower economic growth, reduced tax revenues, all make balancing the economy harder to solve.
In the past, richer people have looked to invest their extra money. As this market becomes more competitive, according to Newsweek, financial institutions take more risks. This was a contributory factor to the financial meltdown in 2008.
Although this all makes grim reading on the surface, President – elect Donald Trump can address many of the issues that are causing the problems at the moment.