Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Do the Rich Capture All the Gains from Economic Growth?

medium.com

Post reply on HN
Print view View original

71–80 of 311 posts

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

#71

Post by scarmig »

pwaivers wrote: post #59
TheBeardKing wrote: post #31

This bullshit article tries to paint a rosy picture of the economy by dismissing proportional median income gains between quintiles and instead argues that absolute income gains of individuals over time is enough evidence to suggest everything is actually great. This chart [1] seems to be the crux of their argument, as in - Surprise! Over 30 years poor people gained an average of almost $30k in income! I sure fucking…

> Surprise! Over 30 years poor people gained an average of almost $30k in income! I sure fucking hope someone who started at minimum wage in 1980 is making $30k more today. Well this is an important part of his argument. The people's wages are not stagnant, but rather they went up an 30K (including inflation). That fact this their wages went up is not trivial.

Not to the overall structure of the economy.

Imagine this: at one high school, there's a 80% literacy rate in the 2008 class. Then it drops to a 60% rate for the 2018 class.

Even if the 2008 cohort may now have a 90% literacy rate, that doesn't change the fact that the school is declining in literacy, and trying to argue otherwise verges on duplicitous.

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

#72

Post by TimJYoung »

roymurdock wrote: post #37

The author Russ Roberts runs the EconTalk podcast and is a well respected economist/journalist/thinker in the field, definitely worth reading for a fair assessment. Here he presents a few studies that go against general economic consensus popularized mainly by Piketty in "Capital in the 21st century" and through papers/writing by Krugman, Saez, Zucman, Stiglitz, etc. that most of the economic gains in the past 100 ye…

Correct me if I'm wrong, but is he trying to say that if a lower-to-middle-class person now makes $10K more than his parents (who made $40k combined), that somehow that is better than the wealthy person that now makes $10K less than his parents (who made $1.2m combined) ?

I think this deserves a "man on the street" survey to see which income most people would prefer...

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

#73

Post by chrismanfrank »

munificent wrote: post #63
TheBeardKing wrote: post #31

This bullshit article tries to paint a rosy picture of the economy by dismissing proportional median income gains between quintiles and instead argues that absolute income gains of individuals over time is enough evidence to suggest everything is actually great. This chart [1] seems to be the crux of their argument, as in - Surprise! Over 30 years poor people gained an average of almost $30k in income! I sure fucking…

Thank you for writing this comment so that I don't feel like a crazy person after reading this article. It came across to me as so obviously flawed that it's hard to even apply Hanlon's Razor to it. Not once does he mention of any correction for the obvious bias that people make different amounts at different points in their careers. Using his exact same process, you could also show that the average height of America…

From the article: "The study looks at people who were 35–40 in 1987 and then looks at how they were doing 20 years later, when they are 55–60. The median income of the people in the top 20% in 1987 ended up 5% lower twenty years later. The people in the middle 20% ended up with median income that was 27% higher. And if you started in the bottom 20%, your income doubled. If you were in the top 1% in 1987, 20 years later, median income was 29% lower."

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

#74

Post by TimJYoung »

weberc2 wrote: post #69
rhacker wrote: post #11

Earlier quoted context omitted.

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 furt…

It's not "shitting on" anyone; it's how (efficient) economics works. You don't earn more money unless you're producing more value. If a steel mill increases its output by way of some new automation, the accounting department and janitorial staff are unlikely to see a wage increase. The folks on the assembly line are also unlikely to see a wage increase because they're not more productive. The people who will be princ…

If you pursue "efficiency" to extremes like this, you're going to bump up against political and social realities that are going to ruin your efficiencies in ways that make giving pay increases seem like a no-brainer.

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

#75

Post by joe_the_user »

roymurdock wrote: post #37

The author Russ Roberts runs the EconTalk podcast and is a well respected economist/journalist/thinker in the field, definitely worth reading for a fair assessment. Here he presents a few studies that go against general economic consensus popularized mainly by Piketty in "Capital in the 21st century" and through papers/writing by Krugman, Saez, Zucman, Stiglitz, etc. that most of the economic gains in the past 100 ye…

The author Russ Roberts runs the EconTalk and is a well respected economist/journalist/thinker in the field, definitely worth reading for a fair assessment.

The thing one needs to understand about economics is that it's field where analysis and advocacy have never been separate. It's not just Marx and von Mises that were strong advocates of policy. Smith, Ricardo and Keynes had the favored policy and thus favored world view.

So being a respected economic commentator by itself isn't by itself a testament to objectivity.

The article is worth a glance but others here have to pointed to the serious methodological problems - following individuals falls victim to regression to mean, some poor can become wealth and some wealthy can become poor says nothing about the average gulf between the groups. Even more, if we have a society where the whole population is divided between wealthy and poor randomly, with each having a 1% of becoming wealthy and otherwise barely surviving, we might have a fair society but it would also be an extremely dysfunctional society (but know such fairness really could exist, so we're just left with the income inequality).

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

#76

Post by corey_moncure »

old-gregg wrote: post #47

The gains have been looted by the healthcare providers. It is not uncommon for health coverage to exceed $2k/mo for a typical family of 4, that's $24k/year. The median US household income is $59k, so the total comp is $83k/year. See the gains now? This absurd amount is not reflected in a paycheck and one may think "my job pays for it" but that is still your money.

This is correct. I dropped my "Affordable" Care Act plan in January when BCBS quoted a monthly principal increase from $696 to over $2200 for the Silver level plan my family of four had been enrolled in. We are young and healthy.

$2200 is monthly rent on a luxury condominium in Honolulu.

I asked the agent on the phone if he had children, and if he could afford such a plan. He replied that he could not.

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

#77

Post by refurb »

TangoTrotFox wrote: post #41

On top of the studies within the article, there are other really interesting papers. Some time back I was searching information on the chiseling out of the middle class, and I found this paper [1]. And the paper does describe that chiseling out. In 1979 the middle class controlled 46% of all income, and the upper/rich classes controlled 30%. Today (as of 2014) the rich and upper class control 63% with the middle clas…

This is the change in the size of each economic group between 1979 and 2014 as a percent of the total population

Then aren't your numbers a positive sign? The size of the poor, lower middle class and middle class have shrank and the upper middle and rich have grown.

Doesn't that suggest that people are generally moving up in economic class?

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

#78

Post by roymurdock »

tanderson92 wrote: post #55
roymurdock wrote: post #37

The author Russ Roberts runs the EconTalk podcast and is a well respected economist/journalist/thinker in the field, definitely worth reading for a fair assessment. Here he presents a few studies that go against general economic consensus popularized mainly by Piketty in "Capital in the 21st century" and through papers/writing by Krugman, Saez, Zucman, Stiglitz, etc. that most of the economic gains in the past 100 ye…

> Here he presents a few studies that go against general economic consensus popularized mainly by Piketty in "Capital in the 21st century" and through papers/writing by Krugman, Saez, Zucman, Stiglitz, etc. that most of the economic gains in the past 100 years have gone to a concentrated few owners of capital. > Basically - absolute mobility (how much people gain over time) is still decently healthy today in percenta…

Agreed. I think he was trying to write a controversial piece to break free from the status quo thinking of "inequality is growing" but totally missed the forest for the trees in his conclusion.

Makes me wonder if he had an alternative agenda with this piece and question his economic analysis in general.

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

#79

Post by munificent »

pwaivers wrote: post #59
TheBeardKing wrote: post #31

This bullshit article tries to paint a rosy picture of the economy by dismissing proportional median income gains between quintiles and instead argues that absolute income gains of individuals over time is enough evidence to suggest everything is actually great. This chart [1] seems to be the crux of their argument, as in - Surprise! Over 30 years poor people gained an average of almost $30k in income! I sure fucking…

> Surprise! Over 30 years poor people gained an average of almost $30k in income! I sure fucking hope someone who started at minimum wage in 1980 is making $30k more today. Well this is an important part of his argument. The people's wages are not stagnant, but rather they went up an 30K (including inflation). That fact this their wages went up is not trivial.

But that's not a useful fact. People are going to get older regardless of what economic policy choices you make, so observing that people go through economic changes as they age isn't actionable.

By analogy, if you're trying to choose effective dietary policy, a study that shows people got taller over the past twenty years isn't helpful if you measure the same people. All it shows you is that children grow larger as they become adults.

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

#80

Post by kimmeld »

roymurdock wrote: post #37

The author Russ Roberts runs the EconTalk podcast and is a well respected economist/journalist/thinker in the field, definitely worth reading for a fair assessment. Here he presents a few studies that go against general economic consensus popularized mainly by Piketty in "Capital in the 21st century" and through papers/writing by Krugman, Saez, Zucman, Stiglitz, etc. that most of the economic gains in the past 100 ye…

Russ' political views have been drifting steadily right over time so the data that he cherry picks regarding inflation, total household income, income inequality, is not surprising. I used to listen to his podcast pretty frequently to get a different perspective on econ but now it's pretty painful due to his increasing inability to see outside his own bubble.
Post reply on HN