President Barack Obama did an interview with Vox.com.
At one point he was asked what he thought was leading to growing income inequality in the US.
Here’s what he said:
- “Some of it has to do with technology and entire job sectors being eliminated — travel agents, bank tellers, a lot of middle management — because of efficiencies with the internet and a paperless office.”
- “A lot of it has to do with globalization and the rest of the world catching up. Post-World War II, we just had some enormous structural advantages because our competitors had been devastated by war, and we had also made investments that put us ahead of the curve, whether in education or infrastructure or research and development. And around the ’70s and ’80s and then accelerating beyond that, those advantages went away at the same time as, because of technology, companies are getting a lot more efficient.”
- “One last component of this is that workers increasingly had less leverage because of changes in labour laws and the ability for capital to move and labour not to move.”
Add all that up, and Obama says workers are in a tougher position. He was then asked about taxes, and he gave this additional reason for pressure on wages:
I think that part of what’s changed is that a lot of that burden for making sure that the pie was broadly shared took place before government even got involved. If you had stronger unions, you had higher wages. If you had a corporate culture that felt a sense of place and commitment so that the CEO was in Pittsburgh or was in Detroit and felt obliged, partly because of social pressure but partly because they felt a real affinity toward the community, to reinvest in that community and to be seen as a good corporate citizen. Today what you have is quarterly earning reports, compensation levels for CEOs that are tied directly to those quarterly earnings. You’ve got international capital that is demanding maximizing short-term profits. And so what happens is that a lot of the distributional questions that used to be handled in the marketplace through decent wages or healthcare or defined benefit pension plans — those things all are eliminated. And the average employee, the average worker, doesn’t feel any benefit.
You can watch Obama’s full answer below, or read the whole thing over at Vox.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.