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Rising US Inequality: How We Got Here, Where We're Going

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Re: Rising US Inequality: How We Got Here, Where We're Going

#11

Post by partha42 »

car12 wrote: post #7

I wonder how much effect immigration has had on the matter of inequality. I'm going off these assumptions: -> Lesser immigration would've led to a higher GDP/capita figure for US. -> More resources to subsidize college and lesser cut-throat competition for jobs. -> Employers would be forced to pay higher wages and people would be more easily to retrain for different jobs. -> Bonus points: We can help Africa and South…

> -> Lesser immigration would've led to a higher GDP/capita figure for US.

How?

Re: Rising US Inequality: How We Got Here, Where We're Going

#12

Post by bilbo0s »

deogeo wrote: post #8
kazen44 wrote: post #5

Earlier quoted context omitted.

Also, how much of this effect is basically the rest of the world playing catch up in terms of economic production? China and the rest of Asia are magnitudes more competitive compared to 50 years ago. And prior to that US industry was unmatched thanks to the massive effects world war 2 had on the other, western industrialized nations.

> Also, how much of this effect is basically the rest of the world playing catch up in terms of economic production? If the rest of the world becoming more productive results in US workers being worse off, then something is severely wrong with US trade policy. For one, it contradicts the dogma that more trade is strictly beneficial.

I think that dogma though was meant to address the situation in a global context. ie - More trade is strictly beneficial for the global population in aggregate.

But yeah, it's still trade, so there will be lows and highs, and ebbs and flows.

Re: Rising US Inequality: How We Got Here, Where We're Going

#13

Post by shdh »

car12 wrote: post #7

I wonder how much effect immigration has had on the matter of inequality. I'm going off these assumptions: -> Lesser immigration would've led to a higher GDP/capita figure for US. -> More resources to subsidize college and lesser cut-throat competition for jobs. -> Employers would be forced to pay higher wages and people would be more easily to retrain for different jobs. -> Bonus points: We can help Africa and South…

> Employers would be forced to pay higher wages and people would be more easily to retrain for different jobs.

Labor has long been subject to outsourcing as a result of entities trying to reduce costs and increase profits.

Re: Rising US Inequality: How We Got Here, Where We're Going

#14

Post by dnautics »

Of course, no mention of inflation, the policy choice which robs from the poor and gives to the rich.

How does it rob from the poor?

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

"when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts."

In other words, inflation is a policy choice to combat sticky wages, which (if you think that's a problem), the solution is to, apparently, screw labor by devaluing their wages from under them.

How does it give to the rich? The eroding value of the currency all but forces individuals and, e.g. pension funds, to dump resources into the stock market, venture investments, etc, which are largely playgrounds of the economically advantaged.

It also has unfortunate side effects like consumerism and environmental destruction, but that's outside of the scope of the OP.

The timing lines up, too. What happened 50 years ago that caused the divergence? With the ending of Bretton Woods, Nixon closed the gold window which was the last thing holding back policy from rampant inflation.

Re: Rising US Inequality: How We Got Here, Where We're Going

#15

Post by maxxxxx »

kazen44 wrote: post #5
sokoloff wrote: post #4

“But the last 50 years have been terrible for people with lower skills. Adjusted for inflation, the average earnings of a man who didn’t go to college is lower now than it was 50 years ago. That’s unheard of.” How much of this effect is the vastly higher percentage of people who now go to college? If you line up 100 people by vague estimation of their likely earning potential in 1970 and do the same today, but now 2.…

Also, how much of this effect is basically the rest of the world playing catch up in terms of economic production? China and the rest of Asia are magnitudes more competitive compared to 50 years ago. And prior to that US industry was unmatched thanks to the massive effects world war 2 had on the other, western industrialized nations.

That doesn't explain why inequality within the US keeps growing. As a whole the country is doing well but somehow the benefits go a small number of people while everybody else is stagnating.

Re: Rising US Inequality: How We Got Here, Where We're Going

#16

Post by [deleted] »

partha42 wrote: post #11
car12 wrote: post #7

I wonder how much effect immigration has had on the matter of inequality. I'm going off these assumptions: -> Lesser immigration would've led to a higher GDP/capita figure for US. -> More resources to subsidize college and lesser cut-throat competition for jobs. -> Employers would be forced to pay higher wages and people would be more easily to retrain for different jobs. -> Bonus points: We can help Africa and South…

> -> Lesser immigration would've led to a higher GDP/capita figure for US. How?

[deleted]

Re: Rising US Inequality: How We Got Here, Where We're Going

#17

Post by chillwaves »

bilbo0s wrote: post #10
sokoloff wrote: post #4

“But the last 50 years have been terrible for people with lower skills. Adjusted for inflation, the average earnings of a man who didn’t go to college is lower now than it was 50 years ago. That’s unheard of.” How much of this effect is the vastly higher percentage of people who now go to college? If you line up 100 people by vague estimation of their likely earning potential in 1970 and do the same today, but now 2.…

Yep. And even the people with college will necessarily compare less favorably with that older cohort over time. In a world where everyone has a college degree, well, some people with college degrees will have to be the ditch diggers so to speak. I don't know how you solve that problem? It's just math.

Use your educated populace to design robots to dig ditches.

It's not "math" that humans have to engage in undesirable labor, under brutal conditions. We have thousands of years of developing tools that are contrary to that statement.

It is a collective social decision to say that an hour of someone's time is worth less than building a robot. That's the only reason why cashiers still exist.

Re: Rising US Inequality: How We Got Here, Where We're Going

#18

Post by hn_throwaway_99 »

lilsoso wrote: post #6

The credibility of the article is undermined by hyperbolic statements such as, "For a lot of children, when they’re 8 years old, it’s too late. If your parents aren’t engaged in the education system, in 10 years you’ll be competing in the labor market against people whose parents sent them to violin lessons and summer programs in the Dominican Republic. There’s inequality of opportunity." It's too late for "a lot of…

I think that's an un-generous interpretation of the quote.

Yes, I think there is good evidence that if you are in a poverty-stricken family and you don't get very early intervention, that by mid-elementary school it is too late for your average poor kid. The reason being that the rest of your environment of poverty is going to be pretty much pulling against you the rest of your childhood, so intervention while your hopes and goals are not yet formed is your best bet.

And come on, the author wasn't saying if you didn't attend a Caribbean summer program that you're underprivileged. I believe he was just using that to highlight the pretty extreme lengths that middle class and above parents go to provide their children with educational enrichment (including music lessons, sports programs, summer camps, etc.) that put poor kids at a lifelong disadvantage.

Re: Rising US Inequality: How We Got Here, Where We're Going

#19

Post by asark »

deogeo wrote: post #8
kazen44 wrote: post #5

Earlier quoted context omitted.

Also, how much of this effect is basically the rest of the world playing catch up in terms of economic production? China and the rest of Asia are magnitudes more competitive compared to 50 years ago. And prior to that US industry was unmatched thanks to the massive effects world war 2 had on the other, western industrialized nations.

> Also, how much of this effect is basically the rest of the world playing catch up in terms of economic production? If the rest of the world becoming more productive results in US workers being worse off, then something is severely wrong with US trade policy. For one, it contradicts the dogma that more trade is strictly beneficial.

> For one, it contradicts the dogma that more trade is strictly beneficial.

Ricardo's original idea was applicable with a narrow set of assumptions/conditions and didn't have much to say about who'd end up with the greater net wealth. I'm not sure how/why it was turned into a magical improve-any-economy law of nature.

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