We can’t ignore the reality that today’s economy has made a huge divide between the richest homes and everybody else. Recent observations indicate that the top 40% of earners are thriving, while the remaining 60% face significant financial challenges. This stark reversal highlights the reality of a two-speed economy, one of growing opportunity and another of deep struggle.
This national economic prosperity has only exacerbated the wealth gap, with wealthy households experiencing a dramatic comedown in their financial fortune. Media coverage suggests that this slice of the population is doing great. Moreover, they are enjoying the full fruits of their job growth—increased investments and affiliated capital continue to rise. Meanwhile, those in the lower income brackets struggle with stagnant wages and rising living costs, creating a divide that is difficult to bridge.
While all of these domestic economic conditions are certainly significant, perhaps even more striking are the currency fluctuations. Over the last year, the U.S. dollar (USD) has seen its share of volatility against most major foreign currencies. The currency has lost 0.45% vs euro (EUR=X) and 0.49% vs British pound (GBP=X). It ended up taking the biggest hit at its day low closing to 0.72% against the Japanese yen (JPY). The dollar strengthened by 0.10% vs the CAD. It increased by 0.50% against the Aussie (AUD) and 0.55% against the Kiwi (NZD). The dollar’s only loss was a mild one of 0.40% versus the Swiss franc (CHF).
These recent volatility are signs of continued turmoil in foreign exchange markets, a situation that can only deepen the economic travails at home. Many Americans identify the strength of the dollar as an indicator of economic vitality. Given its recent performance this will be hugely important to international trade and investment.
This two-speed economy begs the question of how long a two-speed economy can be sustained. And lifting the burdens the rest of the population faces would likely do more to help the economy grow than letting the rich continue to prosper. Retaking our power now Policymakers are under tremendous pressure to respond to these inequities and create a more inclusive economic landscape.