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Do the Rich Capture All the Gains from Economic Growth?

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Re: Do the Rich Capture All the Gains from Economic Growth?

#11

Post by rhacker »

rukittenme wrote: post #6

I'd like to add to this argument. If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon? No... its pretty clear that a specific subset of people receive the benefits. The people who own the steel mill. The people who receive employment from the steel mill. The governments which tax the steel mill. But not me. Economic growth isn't uniform. Its an uneven field that…

I think the thing that is at odds with this attitude is that more and more prevalently "The people who receive employment from the steel mill." don't actually benefit from 500% growth. Instead they might have 6 additional months of job security with little to no raises. And that job security isn't a favor it's because that's the amount of time those workers are needed to get through whatever contract and not any further. In other words, the absolute maximum profit the steel mill can make.

And of course your argument is on the side of the people that risked everything to start a steel mill. So yeah, it's a complex system - but that doesn't mean we have to shit on everyone else.

Re: Do the Rich Capture All the Gains from Economic Growth?

#12

Post by rukittenme »

gooseifer wrote: post #8
rukittenme wrote: post #6

I'd like to add to this argument. If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon? No... its pretty clear that a specific subset of people receive the benefits. The people who own the steel mill. The people who receive employment from the steel mill. The governments which tax the steel mill. But not me. Economic growth isn't uniform. Its an uneven field that…

The Federal government taxes the steel mill and the tertiary industries that are able to thrive because that steel mill is generating revenue. You directly benefit from countless federal programs and indirectly benefit from even more.

That's really not the point. Replace Ohio with China or consider what percentage of after tax growth you're entitled to.

Re: Do the Rich Capture All the Gains from Economic Growth?

#13

Post by bootlooped »

dreamdu5t wrote: post #2

TLDR Not so simple. First, purchasing power is not considered. If wages are stagnant, but most consumer goods have gotten cheaper, then the bottom 50% with stagnant wages is capturing productivity gains. Second, there’s no account for economic mobility. Wages for the bottom 50% are stagnant but most people don’t stay the same income all their life. There’s no account of economic mobility. From the article: “As in the…

The benefit of the decrease in cost of some consumer goods is strongly handicapped by the fact that child care, health care and education have all gone up in price.

I'm skeptical of how much economic mobility mitigates the fact that the top 1% controls so much wealth. If you randomly assigned every bank account to a different person you could also say that the poorest people had the most to gain by this, but things are just as unequal as before.

Re: Do the Rich Capture All the Gains from Economic Growth?

#14

Post by Floegipoky »

Tl;dr: Wealthy and poor cohorts are not necessarily stable over time, generational boundaries in particular seem to be a relatively strong predictor of change. However people who are now poor are just as poor as the poor of the 70s, while those who are now extremely wealthy are even more extremely wealthy than the rich of the 70s.

Re: Do the Rich Capture All the Gains from Economic Growth?

#15

Post by darawk »

rukittenme wrote: post #6

I'd like to add to this argument. If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon? No... its pretty clear that a specific subset of people receive the benefits. The people who own the steel mill. The people who receive employment from the steel mill. The governments which tax the steel mill. But not me. Economic growth isn't uniform. Its an uneven field that…

> I'd like to add to this argument. > If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon?

> No... its pretty clear that a specific subset of people receive the benefits

No, that's actually incorrect. You do benefit (usually), in the form of cheaper steel prices reducing the cost of many of the goods you buy.

Re: Do the Rich Capture All the Gains from Economic Growth?

#16

Post by TulliusCicero »

The whole thing he is explaining is just regression to the mean. Yes, if you take people who are currently rich and people who are currently poor, over time the poor will likely go up in income and the rich go down.

Using this as a counterpoint to accusations of the rich taking all the gains is like pointing out that a wealthy duke could only pass his whole dukedom to one of his children, and the others would have to make do with much less.

It is simultaneously true that the gains of the last few decades have largely gone to "those who are rich", and that the identities of "those who are rich" are not completely stable.

Re: Do the Rich Capture All the Gains from Economic Growth?

#17

Post by gwbas1c »

rukittenme wrote: post #6

I'd like to add to this argument. If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon? No... its pretty clear that a specific subset of people receive the benefits. The people who own the steel mill. The people who receive employment from the steel mill. The governments which tax the steel mill. But not me. Economic growth isn't uniform. Its an uneven field that…

That's a poor generalization.

Is steel cheaper as a result of the growth? If so, then you benefit.

Did you own stock in the company? Perhaps your 401k grew as a result of the growth?

Re: Do the Rich Capture All the Gains from Economic Growth?

#18

Post by poulsbohemian »

rukittenme wrote: post #6

I'd like to add to this argument. If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon? No... its pretty clear that a specific subset of people receive the benefits. The people who own the steel mill. The people who receive employment from the steel mill. The governments which tax the steel mill. But not me. Economic growth isn't uniform. Its an uneven field that…

>I don't know why anyone should feel entitled to economic growth if they didn't participate in it in any way.

Maybe that's the real question then - what prevents people from participating in the economic growth?

The economy has seen strong growth for about a decade now, yet stock ownership in the broader population remains low. Unemployment is low, but incomes also remain low outside the top 10% of earners. Overall savings across the population is very low, with by some studies approx 36% having _no_ retirement savings.

So - I agree with your statement about economic growth not being uniform, but it does lead one to question what's preventing greater participation.

Re: Do the Rich Capture All the Gains from Economic Growth?

#19

Post by rhacker »

gooseifer wrote: post #8
rukittenme wrote: post #6

I'd like to add to this argument. If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon? No... its pretty clear that a specific subset of people receive the benefits. The people who own the steel mill. The people who receive employment from the steel mill. The governments which tax the steel mill. But not me. Economic growth isn't uniform. Its an uneven field that…

The Federal government taxes the steel mill and the tertiary industries that are able to thrive because that steel mill is generating revenue. You directly benefit from countless federal programs and indirectly benefit from even more.

It's sad that people still think we benefit from taxes. If people patched their own roads, paid for their own schools, paid for the police, we'd still be far far far richer. Instead we're paying 10-20k PER BOMB. Every time we drop 5 bombs that could have been a freaking decent salary for a local teacher. Instead that money is killing, like 50-100 people.

The world has become what it is because of the way we treat other people. People learn from people in power that -that is the way to treat others.

Re: Do the Rich Capture All the Gains from Economic Growth?

#20

Post by teekert »

rukittenme wrote: post #6

I'd like to add to this argument. If Ohio's steel industry grows by 500% who reaps the benefits? Me? The guy writing code in Portland, Oregon? No... its pretty clear that a specific subset of people receive the benefits. The people who own the steel mill. The people who receive employment from the steel mill. The governments which tax the steel mill. But not me. Economic growth isn't uniform. Its an uneven field that…

Supposedly these people with increased wealth will be spending more, perhaps also in your sector.
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