> While the issue is still hotly debated, the biggest causes for inequality and wage stagnation since the 1980s in order of impact is: skill-biased technological change (tech favoring skilled workers and amplifying their output, network effects, winner take all economics), globalization and offshoring, and China.
> For comparison, the rise of China alone is believed to account for the loss of 20%+ of the manufacturing sector. Income taxes across the board are inequality decreasing in their effect
This narrative comes from people who have no understanding of manufacturing and don't take the time to check their predictions. An incredibly simple test is checking if decreases in american manufacturing employment coincide with increases in chinese and other overseas production (hint: they don't) or if american production decreased at the same imports grew (they didn't).
The main factor in manufacturing has been process changes which have dramatically increased worker productivity. For example, in 1920 it took 3 man-hours to produce 1 ton of steel in the US, now in the US 1 man hour produces 300 tons. And the improved productivity was not limited to developed countries with expensive labor markets - comparable changes were seen in countries like brazil and south africa over the same period.
People imagine such technological changes to be things like robots and machinery automating low skill tasks, and it's easy enough to see that's not happening. However people rarely appreciate where the real cost is in manufacturing. Take for example a plastic extruder: it takes a whole team of skilled people to get it started up, but a single unskilled person can easily operate it while it is running. Simple changes that allow you to run that extruder for longer without stopping, such as switching shift times and online maintenance, significantly reduce labor requirements even though no tasks are being automated.
The fact is americans are producing more, but they're not being compensated more. There aren't immigrants, foreigners, or robots doing the jobs cheaper, the jobs simply aren't being done because they are unnecessary now. Really, the issue is that the costs of these goods and services which are now so much easier to produce should have fallen but didn't (despite that 1000 fold increase in steel production per unit of labor, inflation adjusted the price of steel has remained constant over the same time period).