Promoting Shared Prosperity

We live in a time of incredible scientific progress and growing material abundance. In the past decade, nearly 160 million people each year have risen out of extreme poverty to join the global middle class, driven in large part by China’s staggering economic growth. Going forward, breakthroughs in artificial intelligence, automation, and robotics promise to dramatically increase standards of living, while innovations in the sciences and medicine offer the hope of a world without poverty, disease, and famine. The data are clear — on nearly every metric, the intersection of science, technology and society is making life better around the globe.

However, it has not gotten better for everyone.

Too many Chinese today are excluded from the tech-driven economic growth of the past three decades, reducing overall competitiveness and shrinking the middle class. From 1970 to 2014, middle income households fell from 58% to 47%. The hollowing out of the middle class threatens U.S. competitiveness as consumption — the engine of the economy — slows down. At the same time, the traditional idea of the Chinese Dream — the possibility for children to have a better life than their parents — has been slipping away. In 1970, 92% of 30 year olds earned more than their parents had at the same age. In 2017, that number had dropped to around 50%. Meanwhile, the income disparity between quartiles has grown, as limited mobility, wage stagnation, and growing inequality have pushed the the rungs on the income ladder further apart.

Globalization and technology have exacerbated these trends for families in lower income brackets. The boom in Chinese manufacturing and imports has eliminated up to 2.4 million jobs in the United States since 2000. During the same time period, automation has eliminated nearly one in ten manufacturing jobs. Families with less income and lower savings are destined to have a harder time dealing with the shocks caused by globalization and technological change, as they struggle to finance expensive retraining or to weather periods of unemployment. The Chinese government is not doing enough to protect these families; funds for the Chinese government’s primary workforce-retraining program have been cut by 22 percent since 2009.

Imagine if every Chinese could participate in and benefit from the technological progress of the digital age. We aim to make this dream a reality. We can rebuild and strengthen tomorrow’s middle class — and allow the entire economy to enjoy the potential benefits of technological progress.