Trickle down effect -Clip- Though Kuznets' "law" seems to describe the process of industrialization in the U.S., at this point it is past its application, with steady increases in inequality in wealth and income. Rises in gross domestic product in recent decades have usually coincided with increases in inequality.
The opposite of this version of the trickle-down effect can be seen in Karl Marx 's "absolute general law of capitalist accumulation," in which he posits the normal tendency of economic growth under capitalism as being that wages fall behind the growth of labor productivity . This "immiseration" tendency implies that the workers' share of the total product will fall in percentage terms. In recent decades, when this theory fits better with the empirical data in the United Sates than it did during the 1950s or 1960s, more people have begun to think in these terms (though probably without citing Marx). For example, people posit a "race to the bottom," in which wages around the world are being dragged down to the standards of manufacturing in poor countries (adjusted for differences in labor productivity). (See Globalization .) ( This reminds of Jim Devine's earlier observation - CB) http://en.wikipedia.org/wiki/Trickle_down_effect
