Do the Rich Capture All the Gains from Economic Growth? • Hacker News Board

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

#141

Post by russroberts613 » Thu, Oct 25, 2018, 7:46 PM UTC

The whole point of much of this analysis (and the videos shown) is that household income can be very misleading. But most if not all of the analyses I report on are for individuals over time. So changes in the number of earners are actually more of a problem for most of the gloomy studies that look at households by quintile. Incredibly, the proportion of households with two earners is LOWER in 2014 than in 1980 because of the large increase in households with one or no earners. Marriage is not nearly as common as it used to be. The data are here in Table H-12: https://www.census.gov/data/tables/time-series/demo/income-p...

I also would add as I did in the essay, that I am not claiming that everything is OK in the economy. I am trying to respond to the relentless claim that the rich got all the gains of the last few decades. It's simply not true. That doesn't mean everything is fine. But just figuring out what actually happened is surprisingly complicated. The people who claim that the economy is only helping the rich should be more nuanced.

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

#142

Post by trophycase » Thu, Oct 25, 2018, 7:46 PM UTC

jdlyga wrote: post #70

We're definitely due for a major shift in our political and economic systems over the next hundred years. At some point, the inequality and gains going to the top are going to boil over into something like the European-wide revolutions of 1848. Back then, much of central europe was still ruled by absolutist monarchs, with even the wealthiest business owners not having representation in government. Basically, people w…

The surveillance-advertising-entertainment complex will likely keep these forces in check for far longer than you'd expect.

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

#143

Post by maxxxxx » Thu, Oct 25, 2018, 7:47 PM UTC

onlyrealcuzzo wrote: post #132

maxxxxx wrote: post #125

Earlier quoted context omitted.

Exactly. Low inflation doesn't help much if your salary increases get eaten up by housing, education hand healthcare. Rent, health care and education should be counted into inflation numbers.

Wait. Aren't rent, healthcare, AND education all included in the eight components of CPI? Isn't that how the government measures inflation? I think one of the big things left off is housing prices. But I'm pretty sure rent, healthcare, and education are part of it: https://www.bls.gov/cpi/factsheets/medical-care.htm http://webapps.dol.gov/dolfaq/go-dol-faq.asp?faqid=94

I am not an expert but the way I have read about is that they also factor in better quality of items so even if your car costs 10000 more it's not counted as inflation because it's a better car compared to years ago and therefore has more value. I think the same is going on in health care and other areas. And excluding house prices is also a very questionable.

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

#144

Post by krupan » Thu, Oct 25, 2018, 7:47 PM UTC

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.

On the other hand, my medical supplies and devices fund in my IRA is way up

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

#145

Post by refurb » Thu, Oct 25, 2018, 7:48 PM UTC

rwcarlsen wrote: post #51

While attempting to refute the idea that the poor haven't improved their station since the 70s, they cite a lot of stats that show most households make more income than their parents did (inflation adjusted), but they completely neglect to account for the huge factor that is the number of people working (or cumulative hours worked) per household in order to achieve that improvement. In the 1970s, there were a lot mor…

Ummm... since at least the 1980's the number of 2 or more income households has actually fallen from 45% to 40%, not gone up.[1]

In terms of hours worked, it's about the same, 44 hours although has been trends down since the early 2000's.

[1]http://www.aei.org/publication/update-how-changing-household...

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

#146

Post by whyaduck » Thu, Oct 25, 2018, 7:52 PM UTC

chrismanfrank wrote: post #73

munificent wrote: post #63

Earlier quoted context omitted.

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 lat…

Not from the article: people who were in the top quintile or 1% in 1987 are far more likely to have retired early than those in middle or bottom quintile. Tell me about their wealth, not their income.

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

#147

Post by watwut » Thu, Oct 25, 2018, 7:54 PM UTC

rwcarlsen wrote: post #51

While attempting to refute the idea that the poor haven't improved their station since the 70s, they cite a lot of stats that show most households make more income than their parents did (inflation adjusted), but they completely neglect to account for the huge factor that is the number of people working (or cumulative hours worked) per household in order to achieve that improvement. In the 1970s, there were a lot mor…

Then again, your counterpoint completely ignores amount of household work needed in 1970 versus 2018.

Cooking, cleaning, washing dishes and cloth now are incomparable to 1970. Changing diapers is a lot less work now too.

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

#148

Post by JAlexoid » Thu, Oct 25, 2018, 7:54 PM UTC

JAlexoid wrote: post #119

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…

What does Upper Middle Class mean?

Yep. I read the definitions... And boy are these people LAAAAZZYYYYYY!!! They could actually scale the data and compare adequate areas. I mean... California is 20% of the population and has median income 20% higher than average across US. But sure... 200k earning family of two in NYC, Bay Area, Seattle, DC are Upper Middle Class apparently.

I mean... Read this bullshit! Washington DC is 3x more populous that Des Moines, even in 2016. "However, inaccurately placing people from Washington, DC, as upper middle class because they have incomes just above $100,000, even though they have high local costs and would not generally be considered as being upper middle class in that location, is offset by categorizing Des Moines, IA, families with incomes just below $100,000 as being middle class, even though those families could be considered upper middle class because costs in their area are low."

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

#149

Post by weberc2 » Thu, Oct 25, 2018, 7:57 PM UTC

eiaoa wrote: post #134

weberc2 wrote: post #127

Earlier quoted context omitted.

Then I'm not sure what answer you're hoping for. > You're just saying their entitled to the passive returns from ownership because they owned something else. Not sure what you mean here, but I agree that investors are entitled to the returns stipulated in the investment agreement. Hopefully this isn't a controversial position. > Anyone could take a risk with the funds if given access to them, even the janitors and li…

> Not sure what you mean here, but I'm saying investors are entitled to the returns stipulated in the investment agreement. You said "...(efficient) economics [means y]ou don't earn more money unless you're producing more value." However, an owner can be nearly completely idle yet still profit handsomely, by simply paying others a modest fee to increase her fortune, so your statement isn't really true.

I think you misunderstand investment. Enterprises are risky; someone has to lose money when they fail or otherwise lose value. Those people are investors. Employees can also be investors (e.g., employee owned companies or other arrangements in which employees buy stock in their companies). By definition, the people who get returns on investment are the investors. Buying risk (aka investment) is inherently valuable.

If you think employees should get returns on investment, then you're necessarily advocating for forcing them to take home less money and risking the difference on the performance of their company.

The good news is that many employees do invest in their own company or in other companies, and they're free to choose their investments such that they can tune the knobs of 'amount' and 'risk' to suit their personal goals.

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

#150

Post by maxxxxx » Thu, Oct 25, 2018, 7:57 PM UTC

snikeris wrote: post #111

TheOtherHobbes wrote: post #96

Earlier quoted context omitted.

https://www.cnbc.com/2018/07/19/income-inequality-continues-... https://inequality.stanford.edu/publications/20-facts-about-... https://www.businessinsider.com/inequality-is-deepening-us-e... Will that do, or do you need more elaboration?

Thanks, I'll check these out. Inequality seems like a fact of life, so I'm wondering what's so horrifying about it. Edit: I was really hopeful for this Stanford resource, but I'm not even sure these "are facts that everyone should know". > 10. Residential Segregation tldr: Rich people and poor people don't live in the same areas. > 13. Bad Jobs tldr: Some people have bad jobs, and if you don't work full-time somewher…

The fact that it's growing is a problem.