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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?

#231

Post by fzeroracer »

hopefulengineer wrote: post #89
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…

It's supply and demand 101, illegal immigration combined with offshoring lowers wages and increases profit margin for the wealthy. Low wage jobs are taken by illegal immigrants, forcing US citizens to take on debt to go to college, where wages are also lowered because there are now thousands of college grads desperate to pay off their debt that can't be eliminated through bankruptcy due to congress being lobbied. A w…

I'd like you to actually cite those claims you've made, because so far you've just repeated a lot of nonsense I hear from people that refuse to back up their arguments with empirical evidence.

Immigration is hardly the issue. Low-wage jobs exist because of the lack of labor protections for workers resulting in companies looking for the cheapest and most efficient labor they can, even if it means tapping desperate people who have no other options.

If you want to fix the problem, you start by increasing the minimum wage and having proper healthcare. Any other complaints about illegal immigration driving down wages is in my opinion deflection. Because if you remove illegal immigration, they'll just move to exploiting the next most vulnerable population (prison labor, people with disabilities etc)

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

#232

Post by darpa_escapee »

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?

Squaring explodes differences.

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

#233

Post by fzeroracer »

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…

I'm more curious as to why you chose to omit the critically important data behind the study. What exactly is your motivation there?

First, let's look at how they define the income brackets:

-Poor and near-poor $0 $29,999

-Lower middle class $30,000 $49,999

-Middle class $50,000 $99,999

-Upper middle class $100,000 $349,999

-Rich $350,000 None

A quote from the publication: "The study did not adjust for regional differences in the cost of living, the underreporting and exclusion of certain sources of material support, or taxes."

As with all statistics it is incredibly easy to look at one and yell out 'The economy is doing FINE!' while ignoring the economic realities for many people. Income levels may rise, but the average costs for middle-class workers has skyrocketed as well. Someone living in SF earning over 100k would count as upper-middle despite likely barely being able to survive.

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

#234

Post by DINKDINK »

refurb wrote: post #145
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...

>the number of 2 or more income households has actually fallen

Where in your citation is this claim supported? The /percentage/ has fallen which could either mean that the number has fallen or that the total population increase at a faster pace than the number.

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

#235

Post by tanderson92 »

russroberts613 wrote: post #141

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 becau…

I think it is generally well-understood that individuals more senior in their career have generally higher incomes. So, when it is stated that "the rich" are obtaining wealth gains, it is explicitly looking at structural changes rather than simply an earnings cycle for individuals continuing to be true. Your first sentence is "Adjusted for inflation, the US economy has more than doubled in real terms since 1975" -- but it was the case even in 1975 that there was absolute income mobility as one progressed in their career. So, your argument purports to disprove the relative mobility or inequality arguments of Saez/Piketty but in fact cannot.

That is why there is so much pushback on this piece of yours: because it appears to be attacking a strawman unrelated to real inequality in the system.

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

#236

Post by weberc2 »

maxxxxx wrote: post #228
weberc2 wrote: post #224

Earlier quoted context omitted.

> In general I object to the idea that people who have a lot of money (earned or inherited) create more value than the people working for them. Both sides play a role in this economy and deserve to be respected as value creator. Right. Efficient economies do reward people according to the value they create. I'm pushing you toward one of the following arguments: 1. Returns on investment are artificially high (relative…

I don't think inefficiency is the right word. How do you determine efficiency of an economy? One person's efficiency may be the other person's loss. It's more about value judgements. Things that should be reevaluated in my view: * The primacy of shareholders. Workers should be recognized as stakeholders in a company * Preferential tax treatment of investment income * Inheritance tax * Health care * Retirement options…

The issue isn't whether or not we want good things for working class people; it's how to make things better without devestating the economy. It turns out that if you do things like forcibly dilute shares for each new worker, it has ramifications which may actually exacerbate poverty. The trick is show how your proposal will succeed without disastrous consequences. :)

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

#237

Post by photojosh »

SketchySeaBeast wrote: post #104
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.

So do we see that in other countries without outrageous healthcare premiums? I don't know, but I'm sure there are examples of countries where a company won't be paying for that and causing one's wage to stagnate because of it.

We don't have those premiums in Australia, and many of us only have private healthcare because we get taxed more if we don't... because of the good public health system it's not required. Our payment is A$320 (US$230) for a family of 4.

But wages are still stagnant here.

AFAICT US employers cover healthcare because that's how it's historically set up, and that's now the expectation. So if they tried to pull back on paying it, even with the crazy increases, employees would walk.

Whereas here, health insurance has nothing to do with employment.

But in both our cases, there's little providing upward pressure on "direct" wages.

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

#238

Post by xupybd »

>This does not mean that everything is fine in the American economy. There are special privileges reserved for the rich that help them reduce their risk of downward mobility — financial bailouts are the most egregious example.

That is such an important thing to note. It's so important to make an even playing field. Equal opportunities allow people to climb that ladders. The economy does much better when people are able to take risks,like start businesses. Also business opportunities open up when the big incumbents fail. To me, the financial bailouts are the worst thing to happen to the economy in a long time. Risks were taken by investment companies and they shifted the burden of those risks not working out on to the tax payer, that is so wrong.

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

#240

Post by alehul »

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…

Wouldn't this be addressed by the fact that, as you said, we now have a new standard of multi-income households?

If everyone in America was in a single-income household, and then we all became, for instance, two-income households, wouldn't it make sense for individual incomes to drop by half?

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