HOUSTON, Nov. 29, 2016 /PRNewswire/ -- With the forces of technology and globalization pushing wages farther apart, the U.S.'s best recourse is to invest more in its human capital to develop workers' cognitive and social intelligence, skills that are earning a premium in today's economy, BBVA Compass economists say in a new study.
Income inequality has been rapidly rising over the past three decades, write BBVA Compass economists Shushanik Papanyan and Amanda Augustine. While some income inequality is unavoidable and even necessary in a competitive market economy, the widening gap can have serious macroeconomic consequences, they say in their report, "Income disparity, technology and globalization."
"The consequences are all-encompassing," Papanyan said. "Rising wage inequality affects GDP, of course, and dampens upward mobility. And there are corollary issues — political divisiveness, polarization — that also restrain growth when they lead to big fluctuations in economic policies."
In their study, Papanyan and Augustine explore how technological advances and globalization have helped cement income inequality, and how they can also be used to ease it.
"The occupations that have resisted automation require a combination of skills — cognitive and social intelligence, entrepreneurial and leadership skills, and the ability to adapt and innovate — that are hard to both measure and automate," Augustine said. "These jobs are earning a premium that is further widening the inequality gap."
The economists offer several prescriptions for reforms, from ensuring educational institutions put a higher value on social intelligence and interpersonal communications skills — especially in early education, to reduce inequality at the outset — to investments in more comprehensive retraining programs.
Papanyan and Augustine will present their findings and answer questions on Friday, Dec. 2, 2016, during a Webex session at 10 a.m. CST. To access the online meeting, click here. (If asked, enter the meeting number 711 821 803 and password bbva1234.) Or to listen in on the conference call, dial (877) 768-4036 or (972) 932-2100 and enter access code 711 821 803.
For the full study, go to bbva.info/2fUSqr2.
Led by BBVA Compass Chief Economist Nathaniel Karp, the bank's research team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates. Any statement or opinion of a BBVA Compass economist is that economist's own statement or opinion and does not represent a statement or prediction by BBVA Compass, its parent companies or management. Follow their work on Twitter @BBVAResearchUSA and @BBVACompassNews.
About BBVA Group
BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a customer-centric global financial services group founded in 1857. The BBVA Group is the largest financial institution in Spain and Mexico, has leading franchises in South America and the Sunbelt region of the United States and is also the leading shareholder in Garanti, Turkey's largest bank based on market capitalization. Its diversified business is focused on high-growth markets and it relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies best practices. The Group is present in the main sustainability indexes. More information about the BBVA Group can be found at bbva.com.
About BBVA Compass
BBVA Compass is a Sunbelt-based financial institution that operates 674 branches, including 345 in Texas, 89 in Alabama, 75 in Arizona, 62 in California, 45 in Florida, 38 in Colorado and 20 in New Mexico. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (4th). BBVA Compass was recently named Best Digital Bank in North America by global finance magazine Euromoney and the best regional bank in the South & West and best mobile app in Money magazine's 2015-2016 list of the Best Banks in America. Additional information about BBVA Compass can be found at bbvacompass.com, by following @BBVACompassNews on Twitter or visiting newsroom.bbvacompass.com.
BBVA Compass is a trade name of Compass Bank.
SOURCE BBVA Compass