Richard Florida warns about America's increasing “economic Balkanization”: a shrinking working class and the attendant swelling of low-wage service sector employees and the unemployed on the one hand, and the prosperous creative class on the other.
"Income and wealth inequality have risen to record levels in the United States." writes Richard Florida. "Even as cities have become the new social and economic organizing units of our increasingly spiky world [PDF], their inequalities are approaching levels found in Third World nations."
According to Florida's math, one-third or 40 million of the country's work force is composed of a powerful creative class, "[w]ith average annual earnings of more than $70,000," and controlling "some 70 percent of the nation's discretionary income." In contrast, the growing low-wage service sector employees working in food preparation, personal care, and retail sales earn just over $30,000 annually. This group of 60 million becomes "the other two-thirds" when the unemployed are taken into account.
"If the top third of America's workers are navigating and prospering in the knowledge economy," warns Florida, "the other two-thirds are disconnected and sinking. And if things continue to go in the direction that they have been, their children and their grandchildren will be too."
Florida writes, "America once had a dream. For almost two-thirds of us, that dream is either dead or dying." He urges politicians, including presidential candidates Obama and Romney, to take heed, and says the nation is in "desperate need" of a "new social compact" for its service workers, that enhances their pay, livelihoods and quality of life.
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Harvard GSD Executive Education
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