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

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

#231

Post by msellout » Sat, Sep 10, 2011, 5:11 AM 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…

It is far from certain that technological progress was the cause of the increase in inequality. There has been much study on this question--why inequality--and the results are inconclusive. Unfortunately, I don't have the links to back it up right now, but I suggest that you look into the academic literature before coming to a conclusion on the cause of increasing inequality.

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

#232

Post by [deleted] » Sat, Sep 10, 2011, 5:11 AM UTC

forensic wrote: post #198

william42 wrote: post #130

Earlier quoted context omitted.

The gap between what you can do and what Larry Ellison can do isn't as relevant as the gap between what you and Larry Ellison can do and what your average single mom living in welfare in Durham can do.

This is exactly the point that HN seems to be oblivious toward. HN people live in a bubble and seemingly have never met anyone who is in real poverty -- they think because in college they had to eat Ramen they were poor. They are clueless. Real poverty is being illiterate, being malnourished in the womb, being raised in a crime-zone, growing up without dental care.

[deleted]

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

#233

Post by Roboprog » Sat, Sep 10, 2011, 5:16 AM UTC

leot wrote: post #182

nicholasjbs wrote: post #71

Earlier quoted context omitted.

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

Well put, as pg's essays usually are. But I think there are rather large gaps: 1) He glosses together reduction of income inequality with elimination of it. The zero inequality thing has been tried and failed. 2) one of his arguments is that better education of the poor will increase wealth inequality, because it will increase the number of customers and the number of possible entrepreneurs. While the premises are no…

Replacing the income tax with an incremental property/savings tax probably would go a long way towards motivating people with wealth to use it or lose it.

That idea is dead on arrival in today's heavily lobbied climate, I'm afraid.

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

#234

Post by msellout » Sat, Sep 10, 2011, 5:21 AM UTC

bbuffone wrote: post #202

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?

inequality is freedom. equality is not! So... if you believe in a free society and open markets then inequality is neither good or bad, it is what happens.

I'm not convinced that inequality is freedom, or that equality prevents freedom. Can you explain what you mean by freedom?

Imagine that a group of people, a nomadic tribe perhaps, wanted the freedom to live in a non-hierarchical society. If someone imposed inequality--that the best hunter/gatherer in the group should receive a "fair" share of resources--that would be restricting the freedom of the people, would it not?

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

#235

Post by Roboprog » Sat, Sep 10, 2011, 5:27 AM UTC

w1ntermute wrote: post #173

polshaw wrote: post #155

Earlier quoted context omitted.

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

And he'd better educate himself if he wants to improve his standing. He was an economic inefficiency that has been unceremoniously weeded out.

Are you trying to invoke Godwin's Law, or something?

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

#236

Post by Roboprog » Sat, Sep 10, 2011, 5:30 AM UTC

illumin8 wrote: post #81

[deleted] wrote: post #67

Earlier quoted context omitted.

[deleted]

You should look at the hourly bill rates for licensed electricians and plumbers. These are definitely blue collar jobs, yet their hourly rates are probably more than most software developers.

I suspect they get paid about 1/3 of what they are billed at, just like programmers working for a consulting shop. Even if self employed, the overcharge helps make up for unbillable work and other overhead. Often, at least.

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

#237

Post by firebones » Sat, Sep 10, 2011, 5:31 AM UTC

bermanoid wrote: post #206

pg wrote: post #72

Earlier quoted context omitted.

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 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. The problem I see with growing income inequality is not the "inequality" part, it's the "growing" one. From a purely mathematical point of view, in any economic climate there's some level of income inequality that's going to be eco…

Robert Reich had a piece on NPR's Marketplace the other night [1] that seemed to contribute to this idea: the notion that while some were accepting 9% (rather than 6%) as the "new normal" in terms of unemployment rate, this was a calamitous development. If you imagine a correlation between unemployment and economic inequality, then at one end of the spectrum, high unemployment and economic inequality leads to anarchy; as you slide down the scale, you pass through revolution, civil unrest, and malaise.

Let's assume that the optimum is farther down the spectrum (somewhere around "sustainability" but not so giddy as to be in "bubble" or "artificially-crafted giddy delusion"). Then what are the forces at play to drive us there? From a political standpoint, it's electability; yet if we're too far into the inequality part of the spectrum, the fixes take more than an election cycle, and therefore require strong political leadership or near dictatorship (think FDR and no term limits as a model; think Japan and its many prime ministers over the last decade and stagnation as the counterexample). That's not promising since it may mean only the Senate, with its six-year terms and only 1/3 of the membership up for re-election has a long enough time-frame to do what's needed.

But what about from a business perspective--what incentives and forces are there today in business to try to close that income gap? Henry Ford allegedly paid well and understood that he needed to create a market for what he made, yet the auto industry today can't close that gap alone. If Apple's prominence in the economy is comparable to Ford's, what hope is there that the jobs they create in China will create a positive feedback loop of income equality? Perhaps with a global perspective it will.

Therefore, I come to the conclusion that the Ford Motor of the 21st century will be a company that is able to further its own market by empowering its customers (and the common, untrained person) to become value creators from an economic standpoint. You see Google and Apple and even eBay nibbling around the edges, but who is going to emerge that harnesses and transmutes that latent economic power?

[1] http://marketplace.publicradio.org/display/web/2011/09/07/pm...

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

#238

Post by kul » Sat, Sep 10, 2011, 5:37 AM UTC

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…

Unequal societies are unhappier.

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

#239

Post by bluedanieru » Sat, Sep 10, 2011, 5:53 AM 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 do you reconcile this with control of political processes? Vast differences in income between the rich and the poor could lead to a huge gulf in influence over the government and, sure enough, exactly that has happened in the States. And, what do you think of indications that increased income disparity leads to decreased quality of life across the board, for rich and poor alike?

Moreover the bottom end of the scale isn't anchored at zero even in the US.

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

#240

Post by Roboprog » Sat, Sep 10, 2011, 5:58 AM UTC

InclinedPlane wrote: post #110

buff-a wrote: post #102

Earlier quoted context omitted.

I don't believe the problem is economic inequality. It does not matter if the rich get richer. What matters is that the poor are getting poorer in absolute terms: how much they have to work in order to make rent, buy food, enjoy a vacation. I do not believe that the poor would even notice how many private jets the rich have if they had food on the table. A staggering number do not.

The poor are not getting poorer. In absolute terms real income for the bottom quintile has increased. In addition, technological progress has drastically reduced the cost of many luxury items and put them in reach of the poor. Today the "poor" in America not only have clean drinking water and electricity they also have cell phones, internet access, large screen tvs, dvrs, cars, refrigerators, dish and clothes washers…

With all due respect, your graph ends in 2007, right before it hit the fan. The income of the bottom 20% is virtually flat from 1980 to 2007 in that graph, with a slight, temporary, swell in the late 1990s. Add in the last 2 or 3 years on the tail of the graph, and that seems quite consistent with the article showing the bottom quintile (20%) losing a few percent of income between 1980 and then.

The other quintiles, even the 21-40% group, have made real gains, and that's good, and most of your arguments apply to the other 4/5. However, it looks like we are slowly creating an underclass.

Do these people really have clean drinking water? Safe streets, homes and schools? Clean, healthy, food? A decent public education? I'm not talking about cheap toys, I mean basics of life.

Final rant: this stuff is personal for me. My family and I are a single income family, near the top of the 4th quintile now (< $120 K may not sound like much in Sunnyvale, but it goes a little ways in Sacramento), but I spent most of my childhood fairly poor. I was about 16 when Reagan's reign of error started ("Reagan" being a figurehead to represent the era and all its players). I went to college in the mid 80s, and watched the door to inexpensive public education largely being pulled shut bit by bit during the 80s. My academic abilities were in about the top 2 to 5 percent, but how is a poor, but smart, kid supposed to go to college now without piling on many thousands of debt? Are we doomed to live in a world run by legacy dullards like W???