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Share of Income Gains by Quintile - Great Depression til Now

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Re: Share of Income Gains by Quintile - Great Depression til Now

#71

Post by nicholasjbs »

portman wrote: post #47
pg wrote: post #36

Technological progress should cause increasing economic inequality, because the bottom end of the scale is firmly anchored at zero (someone taking a vacation), while technology gives the top end ever more powerful levers. So the interesting question is not why economic inequality is increasing, but why for a few decades in the mid twentieth century the trend was reversed. There are probably several factors at work he…

"Technological progress should cause increasing economic inequality " Does that mean you are unfazed by growing inequality, and view it as an unavoidable byproduct of progress? Or do you believe economic inequality is a negative externality (like pollution) that needs to be remedied?

pg's thoughts on inequality: http://paulgraham.com/inequality.html

Re: Share of Income Gains by Quintile - Great Depression til Now

#72

Post by pg »

portman wrote: post #47
pg wrote: post #36

Technological progress should cause increasing economic inequality, because the bottom end of the scale is firmly anchored at zero (someone taking a vacation), while technology gives the top end ever more powerful levers. So the interesting question is not why economic inequality is increasing, but why for a few decades in the mid twentieth century the trend was reversed. There are probably several factors at work he…

"Technological progress should cause increasing economic inequality " Does that mean you are unfazed by growing inequality, and view it as an unavoidable byproduct of progress? Or do you believe economic inequality is a negative externality (like pollution) that needs to be remedied?

I don't automatically assume it's a problem, as so many people seem to. I don't assume that all economic inequality is the medieval type, where the rich are the winners of a zero sum game.

At the high end of the scale it doesn't seem to be a problem. I've seen a lot of people go from middle class to rich when their startups succeeded. Most live pretty quietly.

I would guess most of the damage done by economic inequality is at the low end. I don't think there is much debate that societies should try to mitigate that.

Re: Share of Income Gains by Quintile - Great Depression til Now

#73

Post by RyanMcGreal »

pg wrote: post #36

Technological progress should cause increasing economic inequality, because the bottom end of the scale is firmly anchored at zero (someone taking a vacation), while technology gives the top end ever more powerful levers. So the interesting question is not why economic inequality is increasing, but why for a few decades in the mid twentieth century the trend was reversed. There are probably several factors at work he…

The more interesting question for me is: why are the dividends of increasing productivity no longer being shared with employees?

Re: Share of Income Gains by Quintile - Great Depression til Now

#74

Post by anamax »

portman wrote: post #47
pg wrote: post #36

Technological progress should cause increasing economic inequality, because the bottom end of the scale is firmly anchored at zero (someone taking a vacation), while technology gives the top end ever more powerful levers. So the interesting question is not why economic inequality is increasing, but why for a few decades in the mid twentieth century the trend was reversed. There are probably several factors at work he…

"Technological progress should cause increasing economic inequality " Does that mean you are unfazed by growing inequality, and view it as an unavoidable byproduct of progress? Or do you believe economic inequality is a negative externality (like pollution) that needs to be remedied?

> Or do you believe economic inequality is a negative externality (like pollution) that needs to be remedied?

I'm pretty sure that you're not measuring inequality in a reasonable fashion.

Larry Ellison has a lot more resources than I do, but the net worth ratio is far greater than the opportunities ratio.

Yes, he could afford his own space program, but we both can afford to go diving. He can't drive his (much more expensive) car on 101 any faster than I can. And so on.

I'm actually running into this problem. I'm trying to get someone to help with a project. One of the sticking points is that the potential reward, while "huge" by some measures, won't significantly change what he can do. Since your model predicts otherwise, it's clearly wrong.

How about you figure out how to measure the actual "problem" before proposing solutions?

Re: Share of Income Gains by Quintile - Great Depression til Now

#75

Post by jonnathanson »

adamjernst wrote: post #18

This analysis also ignores actual purchasing power (non-core inflation). Wages may have stagnated, but purchasing power for non-core goods has soared. Free trade is a powerful cause of both wage stagnation and purchasing power. Sure, eliminate free trade and the working class will see wages go up; but they'll spend those wages on $4000 plasma TVs and $50,000 economy cars.

"...purchasing power for non-core goods has soared."

I've heard this argument quite a bit. I'm not convinced it's true. Is it the case that purchasing power for "non-core goods" has gone up, or that the cost of producing such goods has gone down? More likely the latter, IMO.

Look at the cost of home computers, for example. Most PCs cost a mere fraction of what they did back in the '80s and '90s. That has nothing to do with purchasing power increases, and everything to do with the decreasing cost of manufacturing PCs. Same thing with plasma TVs. Or with any new technology as it moves along the curve from state-of-the-art toward commoditization.

Re: Share of Income Gains by Quintile - Great Depression til Now

#76

Post by [deleted] »

[deleted] wrote: post #48
forensic wrote: post #38

Earlier quoted context omitted.

I'm not talking about any crappy dirt pile anywhere, I'm talking about owning my own place to live in a community where there are jobs and 1960s technology. I could move to Nebraska but it is unlikely I could find a job that would afford me a residence. This isn't about social norms, this is about whether the computer revolution has been worth it for the great majority of Americans. A lot of Americans would kill righ…

[deleted]

[deleted]

Re: Share of Income Gains by Quintile - Great Depression til Now

#77

Post by danmaz74 »

pg wrote: post #46
wanorris wrote: post #40

Earlier quoted context omitted.

Don't you think that the top tax bracket being slashed from over 70% to well below 50% had something to do with it as well?

Less than people think. Back when taxes were so high, the rich were really good at tax avoidance. So the rate doesn't tell you the whole story. As one of the people whose opinion about working for a large company changed during the 1970s, I know I didn't consciously think about tax rates. (It's possible they affected me unconsciously though, via the examples of people who'd cleared more after tax due to lower rates.)

It is impossible not to notice that this trend started when Reagan took power and neo-liberalism was adopted as the reference in economic policy. The theory: More wealth produced, better for everybody. The practice: More wealth produced, better only for the top earners.

Re: Share of Income Gains by Quintile - Great Depression til Now

#78

Post by anamax »

[deleted] wrote: post #67
[deleted] wrote: post #61

Earlier quoted context omitted.

[deleted]

[deleted]

> Please, point to me one example of this blue collar utopia.

Much of the "oil states" are like that.

> What about CPAs, lawyers, and their must be some sort of corporate hierarchy wherever these people are employed right?

(1) In other words, you don't actually know anything about these biz,so you're hoping that what you picked up watching "The Office" is reasonably close. It isn't.

(2) Not really. How many lawyers do you think an oil drilling company needs? They need more CPAs than lawyers, but a decent "roughneck" costs more and a decent foreman is gold, and gets it. The lawyers? Not so much.

It's hard and dangerous work, but it's very good money.

You folks really ought to look at what decent tradesmen get.

Re: Share of Income Gains by Quintile - Great Depression til Now

#79

Post by illumin8 »

boredguy8 wrote: post #69

Funny, I was just in a discussion with some folks on this very issue, so enjoy the citation bomb. In short: total compensation isn't outstripping productivity by a substantial degree. First, start with "The relative stickiness of wages and prices" by David E. Spencer. http://findarticles.com/p/articles/mi_hb5814/is_n1_v36/ai_n2... It provides important background to the discussion of whether wages or prices 'stick' m…

The attached graph clearly shows the difference between wages and total compensation.

Re: Share of Income Gains by Quintile - Great Depression til Now

#80

Post by forensic »

pg wrote: post #72
portman wrote: post #47

Earlier quoted context omitted.

"Technological progress should cause increasing economic inequality " Does that mean you are unfazed by growing inequality, and view it as an unavoidable byproduct of progress? Or do you believe economic inequality is a negative externality (like pollution) that needs to be remedied?

I don't automatically assume it's a problem, as so many people seem to. I don't assume that all economic inequality is the medieval type, where the rich are the winners of a zero sum game. At the high end of the scale it doesn't seem to be a problem. I've seen a lot of people go from middle class to rich when their startups succeeded. Most live pretty quietly. I would guess most of the damage done by economic inequal…

>I don't think there is much debate that societies should try to mitigate that.

You haven't been reading HN then, and you haven't met the Tea Party. There are a lot of people here who believe that poor people deserve their lot and should wallow in it.

In my opinion society needs to use tax dollars to ensure a basic standard of living for all citizens. This idea (the welfare state) is deeply unpopular in contemporary America.

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