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<ul class="summary-list"><li>Four therapists shared what their clients from different tax brackets discuss in sessions.</li><li>Money can be a source of stress for both those on lower incomes as well as the <keyword id="20766455" type="General" weightage="20" keywordseo="ultra-rich" source="keywords">ultra-rich</keyword>. </li></ul>We may think getting that big promotion with a hefty pay rise would solve all our problems, but would it? As Business Insider learned from interviewing therapists with clients across the socioeconomic spectrum —from <a target="_blank" class="" href="https://www.businessinsider.com/alices-dinks-henrys-fires-economy-guide-2024-6">ALICEs to HENRYs</a> and beyond — while it's easy to see why having a low income can cause stress — particularly with <a target="_blank" class="" href="https://www.businessinsider.com/wealth-inequality-so-bad-will-take-230-years-end-poverty-2024-1">growing wealth inequality</a> — rich people have their own worries. So what are people across the tax brackets discussing with their therapists? <h2>People on low incomes</h2>Anna Nathanson, a licensed clinical social worker and therapist based in New York, runs a website called Low-Cost Therapy NYC. She said that "financial instability really eats at people's souls." It affects not only people's physical well-being but also their interpersonal relationships and self-worth, which is linked to money for many. Clients might talk about <a target="_blank" href="https://www.businessinsider.com/personal-finance/rules-spender-saver-relationship-build-wealth-2021-9">arguing about money with their partner</a>, job hunting, having to rely on friends for childcare, or how their income affects their self-esteem, Nathanson said. She has also helped patients work through chronic trauma responses, such as depression or nightmares, that they have developed from repeatedly not having their basic needs met. <div type="image" title="A couple sat, arguing." height="1414" width="2121" msid="114215104" hostid="261"></div>Dr. Ashley Castro, a New York-based clinical psychologist who started Healwise, an affordable and accessible therapy nonprofit, said: "Poverty brings with it so many different kinds of stress." She added: "There is a lot that's out of their control that can be difficult emotionally. It's just a reality that life can be tough if you don't have a lot of money." <h2><keyword id="23623471" type="General" weightage="20" keywordseo="ALICEs" source="keywords">ALICEs</keyword></h2><a target="_blank" href="https://www.businessinsider.com/alice-living-paycheck-to-paycheck-without-government-assistance-snap-medicaid-2024-5">ALICEs</a> (Asset Limited, Income Constrained, Employed) are people who earn enough to sit above the federal poverty line but struggle with the cost of living. <div type="image" title="A birds-eye view of a woman typing on a calculator and looking at her bills" height="1414" width="2121" msid="114215097" hostid="261"></div>Traci Williams, a psychologist and certified financial therapist in Atlanta, said that people with little money can end up overspending and getting into debt because they might be "trying to live a life that they desire for themselves that they cannot yet afford." On the other hand, people who have become ALICEs — for instance those who have lost wealth or grew up in financially stable homes butdon't make as much as their parents — may develop <a target="_blank" href="https://www.businessinsider.com/personal-finance/money-anxiety-scarcity-mindset-generational-trauma-2022-6">scarcity mindsets</a>, Williams said. As such, while some ALICEs will discuss in therapy their need to hoard money others talk about wanting to "live it up" and spend recklessly when they are able, she said. <h2>HIFIs</h2><a target="_blank" href="https://www.businessinsider.com/americans-feel-financially-insecure-wont-stop-luxury-shopping-millennials-genz-2024-5">HIFIs</a> (<keyword id="23623474" type="General" weightage="20" keywordseo="high-income" source="keywords">High Income</keyword>, Financially Insecure) earn a high salary, but spend so much they end up living paycheck to paycheck. Just over half of people who make $100,000 or more live paycheck to paycheck, a 2023 report by PYMNTS, a data-analytics company, and LendingClub, a financial-services company, found. <div type="image" title="A woman in a green jumper, looking out a window and away from her phone." height="1086" width="1629" msid="114215098" hostid="261"></div>"That is not because they don't have enough, but it's often because they are overspending or not financially aware," Williams said. This may be due to the <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-causes-inflation">increased cost of living</a>, which has contributed to many people's <keyword id="22941859" type="General" weightage="20" keywordseo="financial-insecurity" source="keywords">financial insecurity</keyword>, she said. Many of Williams' clients say they also feel pressured to spend above their means in order to keep up with the lifestyles of their peers that they see on social media. <h2><keyword id="23623470" type="General" weightage="20" keywordseo="HENRYs" source="keywords">HENRYs</keyword></h2>Some <a target="_blank" href="https://www.businessinsider.com/henry-student-loans-six-figure-income-millennial-gen-z-retirement-2023-11">HENRYs</a> (High Earners, Not Rich Yet) might seem wealthy to others, but still worry about having enough money, Williams said, because "it's all relative." She gave the example of higher-earning clients who <a target="_blank" href="https://www.businessinsider.com/personal-finance/investing/how-to-invest-in-stocks">invest in stocks</a> and worry markets could crash at any time, despite that being unlikely. <div type="image" title="A stressed men looking a stock market graph on a laptop." height="1414" width="2121" msid="114215100" hostid="261"></div>HENRYs who didn't grow up with much money might tell Nathanson that they feel guilty being wealthy, she said. They might also talk about feeling uncomfortable receiving gifts because they don't feel deserving, she said. Or they may feel the reverse and have an unnecessary scarcity mindset. Such people often talk to Nathanson in therapy about feeling "really <a target="_blank" href="https://www.businessinsider.com/young-people-are-developing-money-dysmorphia-2024-7">nervous about spending</a> anything and feeling like they can't indulge in any way." Two HENRYs in a couple, meanwhile, might want to discuss tension in their relationship if they have different ways of thinking about shared wealth, she said. <h2>Ultra-high net worth individuals</h2>"The stereotype is that rich people problems aren't real problems, that they're just in therapy talking about really inconsequential trivial things," Castro said. "But my patients have real issues and they genuinely struggle." Dr. Paul L. Hokemeyer, a licensed marriage and family therapist and clinical consultant to <a target="_blank" href="https://www.businessinsider.com/what-ultra-high-net-worth-investors-are-buying-family-office-2024-6">ultra-high net-worth people</a>, based in Colorado, agreed with Castro. "At the core, people of wealth suffer from the same mental health and relational issues as the rest of humanity," he said. <div type="image" title="A man and woman sit far apart in a fancy apartment." height="1414" width="2121" msid="114215106" hostid="261"></div>For example, Hokemeyer helps people who feel "objectified" and "vilified" because of their wealth; who feel pressure to use it in productive ways; and who deal with the "highly stressful and chaotic" process of starting a business. Well-off children and teens, meanwhile, must often deal with the expectation that they will get into <a target="_blank" class="" href="https://www.businessinsider.com/extreme-moves-gifts-parents-use-get-kids-into-prestigious-preschools-2020-6">elite educational institutions</a> with intense workloads, Castro said. The pressure to achieve can cause problems with perfectionism and anxiety disorders, as well as depression from a lack of downtime and fun. Williams said that she sees a lot of guilt and hopelessness in her wealthier clients, because they realize they can't make as big a difference in the world as they would like to. And, as people live longer, she said that some worry about not having enough money to sustain their lifestylesas they get older. Wealth can also cause issues within families, she said, with disagreements over wills, estates, and spending on vacations. According to Hokemeyer, "wealth can be both a blessing and a curse," but, at the end of the day, "emotions are emotions, pain is pain." Correction: October 16, 2024 — An earlier version of this story misspelled the first name of a psychologist and financial therapist in Atlanta. Her name is Traci Williams, not Tracy. An earlier version also misstated the name of a financial-services company. It’s LendingClub, not LendingCompany.

From ALICEs to HENRYs, here's what people across the tax brackets discuss in therapy

<ul class="summary-list"><li>US-based academics Daron Acemoglu, Simon Johnson, and James A. Robinson won the Nobel Prize in economics.</li><li>Their work has helped demonstrate how institutions affect wealth inequality, the prize committee said.</li></ul>Three economists based at US universities have been awarded the 2024 Sveriges Riksbank Prize in Economic Sciences for their work on how institutions affect wealth inequality.<a target="_blank" class="" href="https://www.businessinsider.com/ai-chatgpt-replace-jobs-unemployment-salaries-technology-economist-daron-acemoglu-2023-9">Daron Acemoglu</a>, Simon Johnson, and James A. Robinson will share the $1.1 million prize money, the <a target="_blank" class="" href="https://www.nobelprize.org/prizes/economic-sciences/2024/summary/">prize committee</a> said.The prize, known in its entirety as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is widely considered the most prestigious prize in the field."Reducing the vast differences in income between countries is one of our time's greatest challenges," said Jakob Svensson, chair of the Committee for the Prize in Economic Sciences. "The laureates have demonstrated the importance of societal institutions for achieving this."The three economists have developed theoretical tools that can explain why differences in institutions persist and how institutions can change, the committee said in <a target="_blank" class="" href="https://www.nobelprize.org/prizes/economic-sciences/2024/popular-information/">a press release</a>.Acemoglu and Johnson are professors at the Massachusetts Institute of Technology, while Robinson is director of the University of Chicago's Pearson Institute for the Study and Resolution of Global Conflicts.

3 US-based academics awarded the Nobel Prize in economics for their work on wealth inequality

In a world where <keyword id="6355231" type="General" weightage="100" keywordseo="sex" source="Orion">sex</keyword> sells, it seems like no one’s buying what’s on the menu. Digital <keyword id="23098292" type="General" weightage="20" keywordseo="sex-ed" source="keywords">sex-ed</keyword> platform Beducated asked 1,885 people to spill the tea on their sex lives, and the results are in: we’re craving more, but getting terribly less. In fact, one of the most surprising takeaways was that a whopping 60% of respondents admitted they were either “neutral,” “dissatisfied,” or “very dissatisfied” with their sex lives. <h2>What do men and women want?</h2>While both men and women are equally satisfied — or dissatisfied — with their sex lives, what they wanted differed. For one, a fifth of the people noted that they had mismatched sex drives. And this trend only gets worse as the relationship progresses. By the fifth year, nearly 40% of the men noted feeling like their partners had a lower <keyword id="20579599" type="General" weightage="20" keywordseo="libido" source="keywords">libido</keyword> than theirs. Meanwhile, 25% of the women rated their libido as “low” or “nonexistent”, which is a horrifying two times as many men. A vast majority of women also would like to work on their confidence in the bedroom. <div type="Article" hostid="261" msid="112440419" title="Can sex really boost your lifespan? A new study says yes, but mostly for women" mstype="2" mssubtype="0"></div>However, things turn slightly more interesting when it comes to managing sex and <keyword id="19983121" type="General" weightage="20" keywordseo="stress" source="keywords">stress</keyword>. While most respondents called stress a sex-killer, it seems to affect a great deal more women than men — 75% versus the men’s 50%. The study’s author explains this trend due to the different types of stress both genders face in their day-to-day lives. “Men are feeling the heat from work stress, which, for the most part, they can shake off once they clock out,” explains Mariah Freya, the co-founder of Beducated. “Women, on the other hand, are grappling with more financial stress, which could be explained by the gender pay gap, a higher likelihood of single parenthood, or the fact that mothers are more likely to work part-time than their male peers. There’s also more family stress, which makes sense since women still shoulder the bulk of caregiving and housework.” While most respondents of the study hailed from developed countries such as the United States, Canada and the UK, similar problems of <keyword id="20141659" type="General" weightage="20" keywordseo="gender-inequality" source="keywords">gender inequality</keyword> persist in even developing nations. One respondent even detailed how stress manifested physically, causing vaginal dryness and heightened irritability. Another shared how stress-induced fatigue made it impossible to muster the energy for <keyword id="20055610" type="General" weightage="20" keywordseo="intimacy" source="keywords">intimacy</keyword>. And yes, there is the persisting <keyword id="23098293" type="General" weightage="20" keywordseo="orgasm-gap" source="keywords">orgasm gap</keyword>. Despite numerous conversations around <keyword id="20612873" type="General" weightage="20" keywordseo="sexual-wellness" source="keywords">sexual wellness</keyword> and equality, Beducated’s survey showed that the orgasm gap persists. A large number of women are still reporting lower levels of satisfaction compared to men, with many admitting that their sexual encounters lack the climax they crave. <h2>More sex, but what’s the point?</h2>It is perhaps unsurprising that most people want to have more sex. Despite the fact that 57% reported the need for more consistent sexual experiences, the data found that a large number of them were already having pretty regular sex. So, is the problem actually that they weren’t having enough sex, or is it that the sex simply isn’t fulfilling enough? “Sexual satisfaction doesn’t just come with regular sex, it also requires deep intimacy and a strong connection,” Freya notes. “It would be interesting to know how fulfilling those sexual encounters truly are.” <div type="Article" hostid="261" msid="112193514" title="Why have the Paris Olympics 2024 athletes been given over 2 lakh condoms?" mstype="2" mssubtype="0"></div>However, some issues were common across the board. Nearly all of respondents said they wished either they or their partner would be more communicative about their sexual needs. <h2>Solution is more communication, less stress, and... gym time?</h2>The survey points to clear solutions — better communication, less stress, and never stopping the learning process when it comes to intimacy. Freya emphasised that sexual education shouldn’t end in adolescence — adults need to learn how to communicate their needs, explore their sexuality, and prioritise pleasure. Interestingly, a few respondents also highlighted <keyword id="20053428" type="General" weightage="20" keywordseo="physical-activity" source="keywords">physical activity</keyword> as a libido booster. In fact, as per the report, those who exercised were 22% likelier to report being “satisfied” or “very satisfied” with their sex lives, with many noting that their daily workouts helps increase their sexual confidence by heaps! With 60% of people stuck in what can only be described as a sexual rut, the survey paints a picture of intimacy that is far from rosy. The good news is that there’s nearly always room for improvement.

A sex-ed company interviewed nearly 2,000 people about their sex lives. Their findings were alarming

<ul class="summary-list"><li>Warren Buffett's riches will go to a charitable trust controlled by his three children when he dies.</li><li>He's avoiding taxes and making his kids into philanthropic titans, a wealth inequality guru says.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/how-warren-buffett-spends-money-net-worth">Warren Buffett</a> lives a simple life, steers clear of politics, and has <a target="_blank" class="" href="https://www.businessinsider.com/warren-buffett-philanthropy-wealth-gates-foundation-children-billionaires-charity-berkshire-2024-9">gifted</a> more than half of his vast fortune to good causes, promising that virtually all the rest will follow.Yet even the 94-year-old investor who runs Berkshire Hathaway is <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-defends-propublica-tax-rate-berkshire-hathaway-stock-dvidends-2021-6">cutting out the taxman</a> and <a target="_blank" class="" href="https://www.businessinsider.com/warren-buffett-children-how-to-manage-fortune-foundation-philanthropy-succession-2024-7">setting his children up</a> to wield massive influence once he's gone, an expert on wealth inequality tells Business Insider.Chuck Collins is the director of the inequality program at the Institute for Policy Studies, and the author of "The Wealth Hoarders: How Billionaires Spend Millions to Hide Trillions."He told Business Insider why <a target="_blank" class="" href="https://www.businessinsider.com/wealth-billionaires-musk-bezos-zuckerberg-net-worth-jensen-huang-waltoans-2024-8">$100 billion fortunes</a> are dangerous, how they could be cut down to size, and why even Buffett <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-criticized-avoiding-taxes-deserves-break-philanthropy-lifestyle-loopholes-2021-6-1030517316">shouldn't be let off the hook</a>.Collins' responses have been edited for length and clarity.There are more than a dozen people each worth more than $100 billion. What do you think about that?These concentrations of wealth are a reflection of a system failure. A healthy capitalist and democratic society must put some brake on the concentration of wealth and power to prevent it from distorting democracy.Forty years of tax, wage, and other policies have funneled wealth to the top — rather than see it broadly distributed through higher wages for workers or paying a fair share of taxes.<div type="image" title="A headshot of Chuck Collins, an author and expert on wealth inequality." height="485" width="647" msid="113487205" hostid="261" sizebytes="23346"></div>What do you think about someone like Warren Buffett, who lives a relatively simple life and has pledged to give virtually all of his vast fortune away?Buffett is not a conspicuous consumer. Even his private jet was <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-private-jet-plane-purchase-indefensible-indispensable-2021-10">initially named</a> the "Indefensible." And Buffett does less to aggressively wield his power and influence in the public sphere. You <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-annual-shareholder-meeting-charlie-munger-stocks-2022-4">don't see his name</a> on the list of big political donors. And he and Bill Gates started <a target="_blank" class="" href="https://www.businessinsider.com/billionaires-pledging-to-donate-wealth-at-all-time-low-2022-10">The Giving Pledge</a> to encourage other billionaires to give to philanthropy.But most of Buffett's wealth will flow in the form of donations to the tax-exempt family foundations run by his three kids, rather than paying estate taxes or taxes on appreciated gains. On the positive side, he's not creating private wealth dynasties. But his children will become philanthropic titans by wielding taxpayer-subsidized private power through <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-charity-donation-gates-foundation-brk-billionaire-2024-6">enormous charitable foundations</a> upon his death.Buffett has gifted Berkshire stock worth billions to his children's charities since 2006. He plans to give almost all his remaining $140 billion fortune to a charitable trust when he dies. His three kids will be the named trustees and will have to agree unanimously on how the money is used.How would you tackle the problem of wealth inequality at a scale where individuals can amass net worth of $100 billion-plus?As a society, we should adapt several public policies to discourage such democracy-distorting levels of private wealth:1. A progressive annual <a target="_blank" class="" href="https://www.businessinsider.com/billionaires-global-minimum-tax-wealth-eu-tax-observatory-money-inequality-2023-10">wealth tax</a>, with rates becoming steeper as wealth goes above $1 billion.2. A meaningful <a target="_blank" class="" href="https://www.businessinsider.com/warren-buffett-barack-obama-wealth-taxes-billionaires-luck-inequality-inheritance-2024-7">inheritance tax</a>, taxing wealth transfers at death. For this to be effective, we have to crack down on the massive wealth-hiding industry.3. A cap on the <a target="_blank" class="" href="https://www.businessinsider.com/how-charitable-remainder-trusts-work-wealth-management-estate-tax-2023-2">charitable deduction</a> so that wealthy people, like Buffett, don't get to opt out entirely of paying taxes.

Warren Buffett's death plan dodges taxes and will make his kids 'philanthropic titans,' says wealth inequality guru

New Delhi, <keyword id="20191902" type="General" weightage="20" keywordseo="inequality" source="keywords">Inequality</keyword> in <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> has skyrocketed since early 2000s, with the income and wealth share of top 1 per cent population rising to 22.6 per cent and 40.1 per cent, respectively, in 2022-23, according to a working paper. The paper titled 'Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj' said between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration. The paper authored by <keyword id="21027543" type="General" weightage="20" keywordseo="thomas-piketty" source="keywords">Thomas Piketty</keyword> (<keyword id="21028261" type="General" weightage="20" keywordseo="paris-school-of-economics-and-world-inequality-lab" source="keywords">Paris School of Economics and World Inequality Lab</keyword>), <keyword id="21028259" type="General" weightage="20" keywordseo="lucas-chancel" source="keywords">Lucas Chancel</keyword> (Harvard Kennedy School and <keyword id="21028262" type="General" weightage="20" keywordseo="world-inequality-lab" source="keywords">World Inequality Lab</keyword>) and Nitin <keyword id="21028260" type="General" weightage="20" keywordseo="kumar-bharti" source="keywords">Kumar Bharti</keyword> (New York University and World Inequality Lab). "Between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration. "By 2022-23, top 1 per cent income and wealth shares (22.6 per cent and 40.1 per cent) are at their highest historical levels and India's top 1 per cent income share is among the very highest in the world, higher than even South Africa, Brazil, and the US," the paper said. According to the paper, the Indian income tax system might be regressive when viewed from the lens of net wealth. "A restructuring of the tax code to account for both income and wealth, and broad-based public investments in health, education and nutrition are needed to enable the average Indian, and not just the elites, to meaningfully benefit from the ongoing wave of globalisation," it noted. As per the paper, besides serving as a tool to fight inequality, a "super tax" of 2 per cent on the net wealth of the 167 wealthiest families in 2022-23 would yield 0.5 per cent of national income in revenues and create valuable fiscal space to facilitate such investments. The paper said the quality of economic data in India is notably poor and has seen a decline recently. It said India's top 1 per cent population's income share appears to be among the highest in the world "behind only perhaps Peru, Yemen and a couple of other small countries". "In terms of top wealth shares, we see that both with top 10 per cent and top 1 per cent, India comes out in the middle of the pack, with Brazil, and South Africa standing out with their extreme wealth concentration levels (85.6 per cent and 79.7 per cent top 10 per cent shares, respectively)," the paper said.

Inequality rising since 2000s, top 1% in India holds 40% wealth, says study

<ul class="summary-list"><li>Some fear that rapid advances in AI may concentrate power and wealth among a small elite.</li><li>Anthropic CEO Dario Amodei says a universal basic income may not sufficiently address such a shift.</li></ul>The rapid advances in AI could consolidate power and <a target="_blank" href="https://www.businessinsider.com/ai-godfather-geoffrey-hinton-universal-basic-income-2024-5">wealth in the hands of a small few</a>, which is why many in the tech industry have called for a universal basic income.But some AI leaders say even UBI, a recurring cash payment to those in a given population regardless of their wealth or employment status, wouldn't be enough."I certainly think that's better than nothing," Anthropic CEO Dario Amodei told Time. "But I would much prefer a world in which everyone can contribute. It would be kind of dystopian if there are these few people that can make trillions of dollars, and then the government hands it all out to the unwashed masses."Amodei, a former OpenAI employee, <a target="_blank" href="https://www.businessinsider.com/heres-ai-company-amazon-betting-billions-on-anthropic-2024-3">launched Anthropic in 2021</a> with his sister, Daniela, and five other OpenAI colleagues. They believed AI would have a dramatic impact on the world and wanted to build a company that would ensure it was aligned with human values. Amodei described the company to Time as one focused on "public benefit."Many in the tech industry have expressed support for <a target="_blank" href="https://www.businessinsider.com/universal-basic-income-carbon-taxes-global-gdp-sustainability-2024-6">universal basic income</a> to mitigate the economic impact of AI. The idea is that it would act as a safety net for people whose jobs have been threatened by the technology.But Amodei suggests that AI will alter society in such a fundamental way that we need to design a more comprehensive solution. "I think in the long run, we're really going to need to think about how do we organize the economy and how humans think about their lives?" He doesn't have the answer, he said, in part because he believes it needs to be a "conversation among humanity."Amodei isn't the only one thinking beyond universal basic income. OpenAI CEO Sam Altman, while a vocal proponent of it, has also proposed the idea of a "<a target="_blank" href="https://www.businessinsider.com/openai-sam-altman-universal-basic-income-idea-compute-gpt-7-2024-5">universal basic compute</a>." The idea is that as large language models advance, owning a slice of one will be more valuable than money.

Anthropic CEO says we need to think bigger than a universal basic income if we want to solve the AI inequality problem

<ul class="summary-list"><li>The IMF released a lengthy report this week warning of massive labor disruption from generative AI.</li><li><a target="_blank" href="https://www.businessinsider.com/openai-leopold-aschenbrenner-ai-essay-chatgpt-agi-future-security-2024-6">Business Insider then asked OpenAI's ChatGPT to summarize</a> the report and highlight key findings.</li></ul>The International Monetary Fund on Monday released a lengthy <a target="_blank" href="https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2024/06/11/Broadening-the-Gains-from-Generative-AI-The-Role-of-Fiscal-Policies-549639">report</a> this week warning of "profound concerns about massive labor disruptions and rising inequality" from the increased use of <a target="_blank" href="https://www.businessinsider.com/sc/how-responsible-ai-can-help-spark-new-levels-of-creativity">generative artificial intelligence</a>.In a densely worded 43-page note, lead author Fernanda Brollo and colleagues seek to provide analysis and guidance for <a target="_blank" href="https://www.businessinsider.com/imf-chief-ai-revolution-striking-job-market-like-a-tsunami-2024-5">policymakers preparing for AI's economic impact</a>.IMF fiscal affairs deputy director and report co-author Era Dabla-Norris told the <a target="_blank" href="https://www.ft.com/content/b238e630-93df-4a0c-80d0-fbfd2f13658f">Financial Times</a> that a shift to a more AI-powered economy "<a target="_blank" href="https://www.businessinsider.com/ai-chatgpt-jobs-layoffs-kristalina-georgieva-world-economic-forum-davos-2024-1">could be painful for workers</a>.""You want to be able to cushion this costly transition and maintain social cohesion in societies," she said.The authors also note that many corporate tax incentives already encourage the displacement of workers, even as many countries rely more on taxes on labor than they do on the taxation of capital.In January, IMF Managing Director Kristalina Georgieva predicted that <a target="_blank" href="https://www.businessinsider.com/ai-affect-about-40-percent-global-jobs-imf-2024-1">AI will affect roughly 40% of jobs worldwide</a>, with the figure reaching up to 60% in advanced economies.To get generative AI's interpretation of the report, we uploaded a PDF of the document to the <a target="_blank" href="https://openai.com/chatgpt/">GPT-4o</a> model and used the following simple prompt:<h2 id="10962474-58fb-49a4-8f93-bbd2df396c16">Here's what ChatGPT said:</h2>The IMF Staff Discussion Note titled "Broadening the Gains from Generative AI: The Role of Fiscal Policies" explores the significant potential and challenges posed by generative artificial intelligence (gen AI). Here are the most significant takeaways:<h3 id="21a8ae93-c95f-47f7-8cdc-937b5697d836">Key Points:</h3><h4 id="8feb202c-7529-4b1a-a4b3-c30bcb6f786d">1. Potential of Gen AI:</h4><ul><li>Gen AI can substantially boost productivity and transform public service delivery, enhancing sectors like healthcare, education, public procurement, and social transfers.</li><li>It offers significant opportunities for both businesses and governments, including cost savings, new revenue streams, and improved public service efficiency.</li></ul><h4 id="29349dc2-a156-4445-8ac7-4ba1f7a0e1c5">2. Challenges and Risks:</h4><ul><li>Unlike previous disruptive technologies, gen AI's rapid diffusion could cause massive labor disruptions, affecting both low- and high-skilled jobs.</li><li>This technology may exacerbate income and wealth inequality, as it could lead to job losses in cognitive occupations and further reduce the labor share in national income.</li></ul><h4 id="2cf1e523-3d8e-445a-8296-f4ae417965e7">3. Fiscal Policy Recommendations:</h4><ul><li>Tax Policies:<ul><li>Special taxes on AI to reduce investment speed are not recommended due to operational difficulties and potential harm to productivity growth.</li><li>Existing corporate tax incentives that favor rapid labor displacement should be reconsidered.</li><li>General capital income taxes, which have declined over decades, should be strengthened to protect the tax base and address rising wealth inequality.</li></ul></li><li>Social Protection Systems:<ul><li>Social protection systems should be expanded to cushion the negative labor market effects of gen AI.</li><li>Policies should include more generous and portable unemployment insurance, wage insurance, and active labor market policies to help workers transition and adapt.</li><li>Education and training programs need to focus on lifelong learning and sector-based training to prepare workers for future jobs.</li></ul></li><li>Public Funding:<ul><li>Public investment should focus on fundamental research, necessary infrastructure, and public sector applications of AI, particularly in education and healthcare.</li></ul></li></ul><h4 id="f9138945-c250-4f40-bd13-b6b6fd37ec0a">4. Agile Policymaking:</h4><ul><li>Policymakers should adopt an agile approach to handle both routine and highly disruptive scenarios brought by gen AI.</li><li>Fiscal policies should steer AI innovation and deployment to maximize societal benefits while cushioning transition costs and preventing rising inequality.</li></ul><h4 id="bbb75a4c-40aa-4207-a324-3179403a6e4c">5. Impact on Inequality:</h4><ul><li>The note emphasizes the potential of gen AI to reinforce market power for dominant firms, leading to increased economic rents and more unequal distribution of capital income.</li><li>Policies should aim to mitigate these effects by ensuring a more equitable distribution of the gains from AI.</li></ul><h3 id="f860c317-c2b1-4c44-a6d0-05656badd5da">Conclusion:</h3>The note concludes that while generative AI holds the promise of transformative productivity gains, it also presents significant risks of labor market disruptions and increased inequality. Fiscal policies must be carefully designed to support social protection systems, reconsider corporate tax incentives, and strengthen capital income taxation to ensure a more equitable distribution of the benefits from AI advancements. Policymakers must remain flexible and prepared for both incremental and highly disruptive impacts of gen AI.

A 43-page IMF report on AI warns of 'profound concerns' about massive labor disruptions and inequality. We asked GPT-4 to summarize it.

The top 4 ways big corporations are fueling global wealth inequality: report  

<ul class="summary-list"><li>High mortgage rates could end up freezing the housing market for a long time, according to the FHFA.</li><li>Unless rates fall dramatically, the mortgage "lock-in" effect could last for years, researchers warned.</li></ul>The mortgage rate "lock-in" effect — the phenomenon that's <a href="https://www.businessinsider.com/housing-market-outlook-home-sales-inventory-mortgage-rates-real-estate-2024-1">frozen over the US housing market</a> and vaulted home prices higher — could end up lasting for years to come, according to the Federal Housing Finance Agency.That spells bad news for prospective homebuyers, particularly those in lower wealth brackets. High mortgage rates sticking around could end up worsening wealth inequality and suppressing home sales for a decade or more, researchers at the government agency wrote in a recent <a href="https://www.fhfa.gov/PolicyProgramsResearch/Research/Pages/wp2403.aspx?utm_source=www.resiclubanalytics.com&amp;utm_medium=newsletter&amp;utm_campaign=the-lock-in-effect-has-cost-the-housing-market-1-3-million-home-sales-and-put-upward-pressure-on-u-s-home-prices-finds-fhfa">working paper</a>. High mortgage rates have <a href="https://www.businessinsider.com/real-estate-housing-market-prices-mortgage-rates-buyers-sellers-2023-10">tanked home sales over the past year</a>, as existing homeowners are looking to hold onto lower rates at which they financed their homes years ago. 2023 marked the worst year of sales since 1995. The <a href="https://www.freddiemac.com/pmms" target="_blank" rel="noopener">30-year fixed mortgage rate</a> eased to 6.34% the past week, according to Freddie Mac data, though 89% of homeowners financed their homes at a <a href="https://www.redfin.com/news/mortgage-rate-lock-in-housing-2023/" target="_blank" rel="noopener">rate below 6%,</a> per a 2023 Redfin analysis. High mortgage rates keeping sellers out of the market likely prevented the sale of around 1.33 million homes between the second quarter of 2022 and the end of last year, FHFA researchers estimated. Those unsold homes alone likely pushed up home prices by 5.7% as <a href="https://www.businessinsider.com/housing-market-existing-home-prices-mortgage-rates-supply-homeowners-bofa-2024-3#:~:text=There%20is%20not%20enough%20supply,and%20homebuilder%20sentiment%20is%20rising.">supply failed to meet demand</a>. That dynamic might be intact for a long time, given the current gap between the market's mortgage rates and the rates homeowners have already secured. Even if interest rates were to fall by two points, sales would still likely be suppressed to 13% below their baseline in 2030, according to the paper.Meanwhile, a single-point increase in interest rates is expected to significantly worsen the lock-in effect in the near-term, suppressing sales to 51%-71% below the baseline level, researchers estimated. "Absent a dramatic decrease in rates, it looks like lock-in could be with us for a long time," they added. Other housing economists have warned that the <a href="https://www.businessinsider.com/housing-market-outlook-mortgage-affordable-homes-high-prices-inventory-rates-2024-3">mortgage rate-fueled freeze could be here to stay</a>. Mortgage rates are influenced by interest rates in the economy — and neither look poised to fall significantly anytime soon, as the Fed could keep rates higher for longer while it monitors the pace of inflation. Continued mortgage rate lock-in could result in higher home prices, lower housing mobility, and more people living in homes they'd rather not, the paper said. Buyers of a lower wealth class will have a particularly hard time, as they won't be able to time the market as well to secure a lower mortgage rate for their homes."This lock-in prevents certain households from optimizing their housing and location choices. More affluent borrowers can better time their home sales strategically, widening the wealth inequality gap. Even with moderate decreases in interest rates, these effects are likely to remain present for years to come," the working paper said. The <a href="https://www.businessinsider.com/housing-market-outlook-home-prices-affordable-record-mortgage-rates-investors-2023-12">housing market was the most unaffordable since 2013</a> last year, according to a separate Redfin analysis. Experts say affordability is only set to improve slightly in 2024, as the<a href="https://www.businessinsider.com/us-housing-market-overvalued-price-growth-mortgage-supply-fitch-ratings-2024-3"> supply of available homes for sale remains tight</a>.

The mortgage 'lock-in effect' could worsen wealth inequality and is likely to last for years to come, FHFA says

<ul class="summary-list"><li>Income inequality has narrowed in the US, with low-wage workers receiving raises during the pandemic.</li><li>This trend has been tapering off, though labor market competition has benefited wage growth.</li></ul>Inequality has been the story of the US economy for over a decade.While the narrative that we're living in a time of heightened inequality persists, the last few years opened up a small window in which that story had a chance to reverse. This was thanks to pre-pandemic minimum wage legislation, coupled with higher raises for lower wage workers in the tumultuous years that followed.It's a positive sign for millions of Americans, many of whom have enjoyed more <a href="https://www.businessinsider.com/personal-finance/discretionary-income">disposable income</a> and better financial security.According to a <a href="https://www.nber.org/system/files/working_papers/w31010/w31010.pdf#page=12" target="_blank" rel="noreferrer noopener">National Bureau of Economic Research</a> paper, workers in the bottom 10% of wages enjoyed higher wage growth than those in the top 10% as of September 2022. Real wages returned to pre-pandemic levels for those in the bottom 10%, rising over 6% between January 2020 and September 2022, while top earners took a hit. The <a href="https://www.dallasfed.org/cd/communities/2022/0808" target="_blank" rel="noreferrer noopener">Federal Reserve Bank of Dallas</a> noted last year this trends stems in part from the "Great Resignation."David Autor, Ford Professor in the MIT Department of Economics who led the study, told Insider the labor market is becoming more competitive for low-wage workers. Better-paying firms are often the more productive firms, he said, so with more competition, workers have more agency to move to higher-paying ones maximizing productivity."If competition for workers has increased, this isn't just good for workers, bad for employers," Autor said. "It also means the labor market is operating more efficiently, that workers are working in more productive firms, so it actually increases economic output."The <a href="https://www.americanbar.org/groups/crsj/publications/human_rights_magazine_home/wealth-disparities-in-civil-rights/americas-vast-pay-inequality-is-a-story-of-unequal-power/" target="_blank" rel="noopener">American Bar Association argued</a> strong jobs recovery and federal relief programs have given workers more bargaining power, allowing lower-wage workers to negotiate higher salaries or more easily leave positions in search of better-paying ones. Although low-wage workers have slightly narrowed the gap, corporate profits have boomed, allowing those at the very top to stay separated from the rest."What you really see in 2023 is that a lot of workers either left because of the pandemic or just refused to take those jobs, and the highest job vacancy rates were in leisure and hospitality," said Harry Holzer, John LaFarge Jr. SJ Professor of Public Policy at Georgetown University's McCourt School of Public Policy. "In terms of old-fashioned supply and demand, employers faced a worker shortage, and it put pressure on them to raise wages."However, those raises seem to have been short-lived and could be slowing down.Since late 2022, though, wage growth for low-wage workers still exceeds that for high-wage workers, the gap is thinning, according to <a href="https://www.atlantafed.org/chcs/wage-growth-tracker" target="_blank" rel="noopener">data from the Federal Reserve Bank of Atlanta</a>.In June 2022, low-wage workers saw 7.2% wage growth from the prior year, falling to 6.5% in June 2023. Meanwhile, high-wage workers were at just 3.7% year-over-year wage growth in June 2022, compared to 5.7% in June 2023.And while wage compression has helped narrow the gap between the bottom and top tiers of the vast majority of Americans who rely on employment for the bulk of their income, the very top of the spectrum, who instead make most of their money from investments in stocks or privately-held businesses, are <a href="https://realtimeinequality.org/" target="_blank" rel="noopener">still doing quite well</a>. <h2>'Moving the needle' on income inequality</h2><a href="https://www.epi.org/multimedia/unequal-states-of-america/" target="_blank" rel="noopener">According to the Economic Policy Institute</a>, the top 1% of Americans make over 26 times more than the bottom 99% and hold 21% of the nation's total income. Autor said wage growth is more likely to plateau than continue its upward trajectory. With fewer young adults available for low-paid work, more people retiring, and increased consumption of goods and services, Autor expects the labor market to remain tight for another decade."This phenomenon is not likely to just go back to where we were prior to the pandemic because we were already heading in the direction of tightening labor markets for the younger and less educated people who were willing to do physically demanding work," Autor said.Autor said higher minimum wages, more employment opportunities for non-college workers in sectors such as medicine, and eliminating tax subsidies for the elite could further chip away at inequality.Holzer cautioned labor market tightness may diminish in the next few years with additional interest rate hikes, adding that AI may displace some lower-wage workers while enabling workers to pivot to more creative opportunities.Holzer said Biden initiatives such as the <a href="https://www.businessinsider.com/us-building-factories-census-data-chips-act-inflation-reduction-act-2023-6">Inflation Reduction Act and the CHIPS Act</a> could help with job creation and training, though he anticipates the effects of such legislation will be modest. Some jobs in the fossil fuel industry may be replaced by green energy jobs, though not all regions or economic sectors may be impacted."From the vantage point of the whole economy, where it's at 160 million jobs and workers, it's hard for me to see that it moves the needle that much," Holzer said.What can move the needle more, he said, are gainful employment rules or student debt cancelation that make it easier for people to earn a degree for high-demand jobs. Policies that can nudge employers to create better jobs, expand workers getting profit sharing, and give workers more of a voice could also help close the income inequality gap, he said.

The US inequality gap is quietly getting smaller

<ul class="summary-list"><li><a target="_blank" href="https://www.oxfam.org/en/research/inequality-inc">Oxfam International</a> published its inequality report, finding it could take 230 years to end poverty.</li><li>Meanwhile, it will be just a few years before the world has its <a target="_blank" href="https://www.businessinsider.com/world-first-trillionaire-minted-10-years-richest-oxfam-musk-bezos-2024-1">first trillionaire</a>. </li></ul>It will take multiple centuries to end poverty at the rate we're going, according to a recently published report.<a target="_blank" href="https://www.oxfam.org/en/research/inequality-inc">Oxfam International</a> published its inequality report this month, detailing a slew of grim predictions about the ever-widening wealth gap."At current rates, it will take 230 years to end poverty, but we could have our first trillionaire in 10 years," the Oxfam report said, laying the blame on billionaires and monopoly-like corporations that are "exacerbating inequality" across the global economy.The Oxfam report detailed how some of the world's top billionaires multiplied their wealth since 2020 becoming $3.3 trillion richer collectively as <a target="_blank" href="https://www.businessinsider.com/world-first-trillionaire-minted-10-years-richest-oxfam-musk-bezos-2024-1">billions of other people just got poorer</a>, suffering from <a target="_blank" href="https://www.businessinsider.com/inflation-rate-hurting-poorest-workers-food-shelter-basic-needs-2023-10">skyrocketing inflation</a> and <a target="_blank" href="https://www.businessinsider.com/15-minimum-wage-take-millions-out-of-poverty-study-2022-9">stagnant wages</a>. Some 60% of the global population has gotten poorer since 2020, the report added."To end extreme inequality, governments must radically redistribute the power of billionaires and corporations back to ordinary people," the report's authors concluded. (The five lead authors listed are Rebecca Riddell, Nabil Ahmed, Alex Maitland, Max Lawson, and Anjela Taneja.)The report called on governments to step up to the plate and invest more in public services, such as education, housing, transportation, and healthcare, just to name a few.The authors also called on governments to heighten their oversight of corporations, increase transparency, and "radically increase taxes on corporates and <a target="_blank" href="https://www.businessinsider.com/bill-gates-thinks-wealthy-pay-more-tax-some-rich-agree-2024-1">rich individuals</a>."Other speakers on the topic, such as economist Oded Galor, have suggested reflection on the past is critical to changing the future, BI <a target="_blank" href="https://www.businessinsider.com/history-inform-how-solve-global-wealth-inequality-2022-6">previously reported</a>. Galor argued global inequality has surged in the last 200 years, and to combat it, key nations like the US need to ensure they have infrastructures that support diversity and don't regress politically, which Galor argued damages global prosperity.The participation of global governments in the initiative to decrease wealth inequality will determine whether the world lapses into a future of "billionaire supremacy" or public power, the Oxfam report concluded.

Wealth inequality and 'billionaire supremacy' have gotten so bad that at this rate, it will take 230 years to end poverty

<ul class="summary-list"><li>Henry Kissinger said democracy is in "great danger" due to growing income inequalities.</li><li>He said that values of "compromise" and "understanding" are in trouble in the West.</li></ul>Henry Kissinger said democracies in the West, including in the US, are in "great danger" because the middle class is disappearing due to widening income inequalities.In comments to Mathias Döpfner, CEO of Axel Springer, Business Insider's parent company, the former top diplomat said the middle class created Western democracy at a time of no "fundamental" political differences, with "respect" for the opposition and "relative" technological stability.However, now values of "compromise" and "understanding" are in "great danger in the West," he said.Kissinger cited the rapidly evolving technological changes and inequalities of incomes, which he said are more "obvious" now than they were in the past.The one-on-one interview with Döpfner, released last month, turned out to be Kissinger's last major media appearance. He <a target="_blank" href="https://www.businessinsider.com/henry-kissinger-secretary-of-state-dead-richard-nixon-gerald-ford-2023-11">died</a> on Wednesday, aged 100.The world has experienced a continuous decline in democracy over the past six years, <a target="_blank" href="https://www.idea.int/gsod/2023/chapters/executive-summary/">according to the Global State of Democracy 2023 report</a>. This was the longest period of deterioration since records began in 1975, it said.The report, created by the International Institute for Democracy and Electoral Assistance, based this on representation, rights, the rule of law, and participation.In several countries, including the US, "the erosion of democratic norms has been engineered by leaders claiming to speak in the name of, and with the authority of, the people," it said.According to <a target="_blank" href="https://www.nytimes.com/2011/11/04/opinion/oligarchy-american-style.html">prominent</a> <a target="_blank" href="https://www.theguardian.com/inequality/2017/may/02/higher-inequality-move-away-from-democracy-branko-milanovic-big-data">economists</a>, widening income inequalities are exacerbating the democratic deficit, with the influence of big money denting existing political systems.Because of these growing issues, democracy needs to "rebuild itself," Kissinger said, with this becoming a "key issue" in the US and the rest of the world.

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