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

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

#201

Post by onlyrealcuzzo » Thu, Oct 25, 2018, 9:28 PM UTC

kwillets wrote: post #164

onlyrealcuzzo wrote: post #132

Earlier quoted context omitted.

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

Rent is not in the CPI. That's what made Shiller's work useful (comparing housing costs and CPI). Edit: Shiller was wrong (I asked him about this point after a lecture about his work on historical housing prices).

I think Shiller's work was useful because housing prices (if I'm not mistaken) are not part of CPI.

Housing prices go into much bigger bubbles than rent. If interest rates go up or down, it doesn't very much affect the average person's ability to pay rent. But it has a huge impact on how much the average person can borrow.

My understanding for the reason that housing prices aren't included in CPI is because nobody buys houses in cash. So including mortgage payments in theory makes sense -- but it' tricky -- because everyone's mortgage originated at different times and under different circumstances.

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

#202

Post by quickthrower2 » Thu, Oct 25, 2018, 9:30 PM UTC

Joeri wrote: post #196

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…

The biggest manipulation is they divide household income by the square of household size, which makes the bigger families of the 60’s seem to earn a lot less than they did. The whole thing is based on two studies funded by the same institute based on the same biased dataset, and diving into how they get their numbers is enlightening.

Statistics people love squaring stuff! Why are they squaring the household size?

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

#203

Post by marricks » Thu, Oct 25, 2018, 9:34 PM UTC

metalchianti wrote: post #48

marricks wrote: post #35

Earlier quoted context omitted.

That will certainly be compounded by the demise of the estate tax. That said it’s not like intergenerational wealth is a new thing, wouldn’t that be the case way before the 70s? It seems the trickle down economics approach taken since the 70s from both Democrats and Republicans hasn’t really helped anyone but the rich.

The same inter-generational wealth logic would apply pre-1970s. I think that 1970 is used as a starting point because that's also when real wages started dropping relative to production output. I'm don't think it's fair to blame US politics. I bet this is a universal phenomenon.

Your argument is wealthy inequality has been rising universally since the birth of the USA?

It’s not hard to find a chart and it was OK and exploded since the 70s, perhaps coincidentally with trickle down economics and neoliberalism.

https://static-ssl.businessinsider.com/image/54610db56da8113...

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

#204

Post by watwut » Thu, Oct 25, 2018, 9:40 PM UTC

rwcarlsen wrote: post #175

watwut wrote: post #171

Earlier quoted context omitted.

That is not needed the way washing cloth and ironing was. Which is why the micromanagement trends are not domain of working classes as much as upper classes. Micromanaged kids don't need parent at home a lot of it is outsourced to schools and clubs. And parent at home wishing to be needed or useful may be contributing to the perceived need for micromanagement (plus those who want women at home for emotional or ideolo…

I have four kids and several friends with kids, and I can tell you that the amount of effort+time it takes to not get CPS called on you (depending on where you live) can be very substantial.

Out of curiosity, what does get CPS called on you in your area? Second question: how much of it is a need of the child and how much serves more of "social mores controll" function?

For the record, I don't actually want to return to 1970 standards. However, I suspect that the extreme micromanagement has multiple reasons, but child's needs are not really the driver.

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

#205

Post by NeedMoreTea » Thu, Oct 25, 2018, 9:41 PM UTC

rwcarlsen wrote: post #163

refurb wrote: post #145

Earlier quoted context omitted.

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...

That is interesting. I confirmed those numbers looking at the actual census data. The changes you mention are much less pronounced if you remove no-income households from the data though. Perhaps no-income households should be included in the 2 or more stat - since one could make a case for that category being the people who "gave up" because they couldn't keep up with expenses. I wonder what other things might be un…

I wonder if those single income households include maintenance and alimony. The nature of families has changed significantly since the 1970s with more divorce and more children being raised in one parent households. I doubt the single parent receiving money from the estranged parent is counted as a two earner household, even though in some senses it is.

Once you add the changing rate of marriage, increase in single person households since the 70s, and the fact that real inflation often varies depending on which income quintile you're in, I don't think enough data is available to let you pick it apart meaningfully. So we're left trading anecdotes or stats with gaps. :)

The number of traditionally shaped families, i.e. mum, dad, and 2.2 children has plummeted since the 70s and the number of singles, with or without children has rocketed from both increasing separation and later entry into relationships.

I'm in agreement with your main point, that it's far harder for a single earner family to thrive now than in the past. I doubt I can cite that in any sensible way.

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

#206

Post by acover » Thu, Oct 25, 2018, 9:41 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

They may not be calculating housing costs correctly.

For example, in Toronto house prices have seemed to go crazy. Industry reports agree. However housing inflation in Toronto measured by Statistics Canada does not show that.

Has anyone else noticed this or have an explanation? It's very strange.

https://www.reddit.com/r/AskEconomics/comments/9haj6h/does_t...

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

#207

Post by weberc2 » Thu, Oct 25, 2018, 9:42 PM UTC

maxxxxx wrote: post #110

weberc2 wrote: post #69

Earlier quoted context omitted.

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…

I have a problem with calling people that have a lot of money to invest with as value creating. We should give more respect to the people who do the work instead of funneling all the benefits to people who just happen to have money.

Sorry dude, that's how economies work. Investors agree to buy shares in exchange for the right to sell those shares later. Employees agree to work in exchange for a salary; if they can find a larger salary elsewhere, they're free to pursue it. If employees want to buy some part of a company, they can do that as well (assuming they can persuade someone with shares to sell them) and then they'll earn (or lose) RoI just like other investors.

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

#208

Post by manicdee » Thu, Oct 25, 2018, 9:43 PM UTC

quickthrower2 wrote: post #202

Joeri wrote: post #196

Earlier quoted context omitted.

The biggest manipulation is they divide household income by the square of household size, which makes the bigger families of the 60’s seem to earn a lot less than they did. The whole thing is based on two studies funded by the same institute based on the same biased dataset, and diving into how they get their numbers is enlightening.

Statistics people love squaring stuff! Why are they squaring the household size?

Because it makes the later salary per household look better.

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

#209

Post by skybrian » Thu, Oct 25, 2018, 9:57 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

The inflation rate does include rent, or "imputed rent" for home owners. However, it's an average of what people actually pay, including people who somehow got a sweet deal on housing costs, through rent control or buying their house a long time ago or whatever. It's not going to match the prices you see advertised when you're looking to move.

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

#210

Post by wasdfff » Thu, Oct 25, 2018, 9:58 PM UTC

zip1234 wrote: post #162

rwcarlsen wrote: post #151

Earlier quoted context omitted.

Some things have become more difficult since then too. Free range parenting is very frowned upon - and micro-managing kids takes a lot of time and effort.

Perhaps more time is spent driving kids to activities, but a counterpoint is that kids have never had more video games or TV than the present.

Before kids were staying up late playing video games, they were staying up late with a comic book. I think there’s a fallacy in this notion that technology has changed how much time is spent by a child being productive or not. The medium might have changed, but I expect the mean amount of time goofing off (be it book, radio, tv, video game, or internet) to be constant throughout generations of children and teenagers.