The benefits from trade and immigration and globalization are so huge that everyone inside of developed countries should be doing better than they otherwise would have.
Policies such as trade, globalization and immigration have all been proven to be of great global economic benefit.
while China and the developing world have benefited enormously from trade, so too has the developed world. The benefits of comparative advantage are real. But the question then becomes: for every extra dollar that has accrued to the US and the UK, who has been the beneficiary?
Here’s a hint: it’s not the people who are voting for Trump and Brexit. These folks don’t care about the chart above, or what it represents as an accomplishment for humanity. It’s not their chart.
Yes, trade, globalisation, immigration are good things. They have grown the pie immeasurably.
But playing the ultimatum game and screwing the second player — those folks being screwed won’t care how much the pie is being grown if they feel they’re not getting a fair slice. They’ll throw the whole thing out.
For comparison, if all households had experienced equal cumulative percent change in income from 1979 to 2007, then that percentage would have been 53.4%. The top 10% of American households by income took more than the average share of gains since 1979 while everyone else received less. The bottom 20% (bottom fifth / bottom quintile) received about half (29.2/53.4 ~ 55%) of an equal gain. The middle quintile (40th-60th percentile), the core of the middle class, received about a third (19.7/53.4 ~ 37%) of an equal gain.