Share of Income Gains by Quintile - Great Depression til Now • Hacker News Board

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

#151

Post by cma » Fri, Sep 09, 2011, 11:24 PM UTC

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…

How about opening trade-relations with China--a country where forming a labor union is punishable with the death penalty--didn't that happen around that time?

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

#152

Post by joshcrews » Fri, Sep 09, 2011, 11:24 PM UTC

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…

My explanation of the 1947-1979 middle class bulge is the spoils of World War II for the United States. It gained brain power (smart immigrants), oversees market domination, and a premium on capital (other countries capital and people destroyed by war).

Those spoils paid high wages for the US middle class because it needed those workers for its factories and companies. After a few decades the advantages of the spoils of war evened out with other countries (catch ups in capital, education, strong legal systems) and technology for outsourcing and cheap shipping broke up the US middle classes prior monopoly on US factory/company jobs.

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

#153

Post by usaar333 » Fri, Sep 09, 2011, 11:24 PM UTC

forensic wrote: post #30

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.

People making your argument always mention TVs, they never mention rent, land, food, education, childcare, or healthcare. 1. Rent 2. Land 3. Food 4. Education 5. Childcare 6. Healthcare You know, the stuff that actually matters. I'll give up my $400 LCD TV to be able to afford having my spouse stay home. No problem. I'll give up my Hyundai to be able to get a degree on the cheap like they did back in the 60s. I'll gi…

The items you mention have not increased in price due to trade.

1/2. Rent/land: Remain cheap in the midwest. Very nice 3 bedroom houses in suburban Texas can be had for $125,000; you can easily buy one on a software dev's salary (in other words, 1950s style where the husband as only worker). Insist on living on the West Coast? Well, you can blame the obscene housing prices on a combination of population increase and zoning laws.

3 food. Ok, we're looking at maybe 50% increase over raw inflation from the 1950s. Aside from this being a small increase, most of this increase can be attributed to additional food safety and even more importantly surging price in oil due to larger world population.

4. Education: Sure, it's surged, but again this is due to lower taxes and more social programs, not trade. Besides, education ($60k tuition for 4 years in public school) isn't that bad compared to the the savings on cars alone over a lifetime.

5. Has this gone up? Assuming your spouse was working in the 1960s that is.

6. In all fairness, life expectancy is significantly higher now than 50 years ago.

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

#154

Post by polshaw » Fri, Sep 09, 2011, 11:26 PM UTC

csomar wrote: post #99

hans00 wrote: post #49

Earlier quoted context omitted.

Man, what fantasy world do you live in? Large corporations decrease inequality? [citation needed] Ambitious people started to lose interest? I can't even dignify that with a [citation needed]. Ambitious people have what to do with anything on a national scale? Ambitious people somehow caused, or were party to, the decimation of the middle class, which somehow never once gets mentioned by the actual economists and pol…

You don't seem to be serious, but I'm making this reply for other people in HN. I might be wrong, so judge and reply. Large corporations decrease inequality? Yes. All (most) software developers in a large corporation are paid the same wage. Well, there are persons that can make millions not working in a company (ie. Indie game developer, iphone app developer...). But when you work for a large corporation, you might t…

Income equality has a broader meaning than just people doing the same job having similar wages. It most definitely includes the difference between the boss and the workers.

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

#155

Post by polshaw » Fri, Sep 09, 2011, 11:28 PM UTC

shawndrost wrote: post #118

jbooth wrote: post #56

Earlier quoted context omitted.

I think this comment only acknowledges the existence of white collar jobs. You used to be able to pay for a house, a car, and the kids' college education with a factory job. While the wife stayed at home. Now, that scenario is eye-popping unbelievable. You're probably at wal-mart or starbucks if you don't have some sort of specialist skill or a connection into the white collar world. I'm not endorsing a particular so…

You're right that it's gotten harder for blue-collar people in the US. However, those jobs now belong to former subsistence farmers in developing nations, so it's quite different when you look at it from a global perspective.

So what of the uneducated man from a developed nation? Unemployed, by your statement.

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

#156

Post by wanorris » Fri, Sep 09, 2011, 11:30 PM UTC

learc83 wrote: post #90

forensic wrote: post #80

Earlier quoted context omitted.

>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…

Just because I might disagree with your methods of equalizing income, doesn't mean I "believe poor people deserve their lot and should wallow in it." You've turned a political disagreement about the methods to accomplish some desirable goal do so into a moral argument. You've decided that if I think there is a better way to elevate the poor than your way, I must want them to stay poor and thus must be evil. Why do yo…

For one thing, because there is no evidence I'm aware of that any tangible, real-world action originates from the belief that the poor should be "elevated" in some other manner.

When the government gives poor single moms peanut butter to make sure that her kids have protein to eat, that gets measured, and we can perform efficacy studies on it. When the government gives housing stipends to poor families so that they have a home to live in, we can measure that too.

If the enormous segment of the population that doesn't believe the government should be helping the poor is initiating some kind of private action that has broad, measurable effects on the plight of the poor, I would be delighted to hear about it. If not, then this claim that some other action should be taken kind of seems like a red herring in the discussion, because that means that the only practical options on the table are for the government to do something or for the government to not do something.

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

#157

Post by klbarry » Fri, Sep 09, 2011, 11:30 PM UTC

cperciva wrote: post #119

klbarry wrote: post #25

Earlier quoted context omitted.

That is not true. They vastly overstate the decline in wages, due to the rise of more single person households. See: http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_&#... Individual wages have risen steadily since 1910, with no gaps. The household income chart is a misleading chart.

Note: That graph is personal income per capita , not personal income per worker or per hour worked .

Also see: http://visualizingeconomics.com/2007/11/04/has-middle-americ....

Incredibly stable since 1960.

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

#158

Post by jgesture » Fri, Sep 09, 2011, 11:32 PM UTC

trunnell wrote: post #92

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 Is this view at odds with mainstream economists? I believe the mainstream view is that technological progress is a tide that should naturally lift all boats.

I think the argument is that technology is great for the people who use technology.

If every programmer and engineer got paid $500,000/yr, that would be great...for ever programmer or engineer, it wouldn't matter much for others.

I do tech support for a web hosting company and I've definitely seen people with low incomes who don't and don't want to use technology, they are falling behind.

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

#159

Post by watmough » Fri, Sep 09, 2011, 11:33 PM UTC

btilly wrote: post #50

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?

Go back further. 70% itself was a major slash by JFK (a very rich person from a very rich family) from the previous 90%+ in the 50s. Before that, there was no point in being paid more. The only thing that made sense was to take pleasure in the organization that you ran.

Plus there was always investing in other companies, spreading capital, creating new sources of wealth.

Wrong period, but wasn't Jay Miner financed by some dentists when designing the Amiga, initially? This is the sort of thing I am thinking of.

Then there was a period in people largely borrowed against their house/assets to start a company. That is now closed to many.

On the flip-side (looking through pg's eyes), the cost of starting many classes of companies has now essentially dropped to just the time required, as much of the infrastructure, process, software required is free or can be generated or outsourced cheaply.

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

#160

Post by usaar333 » Fri, Sep 09, 2011, 11:34 PM UTC

learc83 wrote: post #111

illumin8 wrote: post #105

Earlier quoted context omitted.

You wrongly equate material possessions with happiness. I'd easily go back to a 60s quality lifestyle if my wife didn't have to work and I only had to work 40 hours a week to own a nice house. In the 60s they had most of the same electric appliances that we have today, save the microwave oven, personal computer, and the cellphone. I'd bet that eating food that can't be heated in a microwave is probably more healthy f…

Why don't you go back to a 60s lifestyle? It is definitely possible; plenty of people live low impact non material focussed lives. My point is that there is a reason that it takes 2 incomes to support a household now--All the extra stuff we have. I was refuting the people who keep asking why we have to work so hard just to have a normal life.

I don't share grandparent's views of the 1960s, but the cost of additional material goods are trivial.

The main reason you need 2 incomes to support a household is because you assume you have 2 incomes when building the household. In other words, (if 1 income was desirable), a couple lives in way too nice of a house. They also end up with two nice cars instead of one average one and probably eat out more than they could afford on one income. That's pretty much it; all other costs are trivial.

(Practical example: I'm paying $12,000 a year for a room in San Francisco. Car probably runs around $3,500. In comparison, the price of all my aggregate post-1960 technology -- cell phones, computers, internet, etc. is well below $3,500 -- the price of the car.)