STRATEGIC

86 Strategic Choices for a Turbulent World: In Pursuit of Security and Opportunity
upgrading the skill level required to attain or keep those jobs” and
finds that advanced technology was responsible for nearly one-third
of the growing income disparity in OECD countries over the past 25
years. 42 This suggests that absent policy changes, income inequality—
within and between nations—will only increase. 43
In the United States, however, despite the public focus on job
dislocation and income inequality, the story is considerably more complex.
For example, in December 2015, the Pew Research Center found
that the American middle class was shrinking. What was less remarked
upon was that this was because the shift from middle to upper was
actually greater than the shift from middle to lower. 44 Upper-income
households have gained the most, both in income (since 1970) and in
wealth (since 1983)—so income inequality increased—but the share
of adults living in upper-income households also increased. 45 Numerically,
more Americans are doing better financially; yet this is not
reflected in the anxiety expressed by many. Surveys conducted between
2014 and 2016 find high rates of financial stress even among those who
were financially secure, and in spite of falling unemployment and an
improving economy. 46
For the bottom third of Americans, financial insecurity appeared
to be a major factor. A 2016 Federal Reserve survey found that 46 percent
of adults said they could not cover a $400 emergency expense,
42 Era Dabla-Norris et al., Causes and Consequences of Income Inequality: A Global Perspective,
Washington, D.C.: International Monetary Fund, June 2015, pp. 18–20.
43 Brynjolfsson, 2016.
44 Pew Research Center, The American Middle Class is Losing Ground: No Longer the Majority
and Falling Behind Financially, Washington, D.C., December 9, 2015b.
45 The study defined “middle income” as $42,000 to $126,000 in income for a three-person
household in 2014.
46 Surveys indicated that financial anxiety is not confined to low-income Americans; millionaires
also express a large degree of fear of losing their wealth and millennials who are millionaires
are less likely to think they have “made it” and nearly twice as likely to be fearful of
losing it than older ones. See “When is Enough . . . Enough? Why the Wealthy Cannot Get
Off the Treadmill,” UBS Investor Watch, 2Q 2015; Dave Shaw, “The Economy’s Improving
but Americans’ Economic Anxiety Persists,” Marketplace, March 14, 2016.