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Have US Income and Wealth Inequality Actually Increased?

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Re: Have US Income and Wealth Inequality Actually Increased?

#41

Post by mchusma »

cryoshon wrote: post #26

Where is this guy getting his numbers? From wikipedia[1]: 2011 had a pre-tax Gini coefficient of 0.477 whereas 1967 had 0.397 (the first year the Gini was actually measured), demonstrating considerable increase in inequality. There's an Economist article[2] that puts the US's pre-tax Gini at 0.57 for 2013. So yeah, income inequality has increased astronomically, undeniably, conclusively. The author seems to write off…

Thanks for digging into the numbers with me. Actually there are 1947 Gini numbers floating around, and the multiple sources including government census data, and world bank numbers are all slightly different, which in itself is a problem.

I understand the concern about political power, and agree that this is the best reason to be concerned about inequality. I think I have a long term solution to that problem that I will announce later this year.

Re: Have US Income and Wealth Inequality Actually Increased?

#42

Post by Zigurd »

Every chart and data set I can find says the US has returned to 1920's levels of income inequality since things started getting worse in the mid/late 1980's.

So, yeah, income and wealth inequality have gotten worse, and are at a level that was considered very bad for social stability.

Re: Have US Income and Wealth Inequality Actually Increased?

#43

Post by socrates1998 »

Using 2009 is very problematic. It's when the SP 500 bottomed out.

He picked the worse possible moment to measure rich people wealth in the past 40 years.

I don't know his deal, but it's obvious that income inequality has been on the rise around the world the past 40 years.

Re: Have US Income and Wealth Inequality Actually Increased?

#44

Post by base698 »

paul_f wrote: post #19

For those caught up in what I think is a cause-de-jour, income inequality, I'll pose these two questions: 1. Is anyone worse off because Mark Zuckerberg is very rich? 2. If policies to reduce income inequality made the poor worse off, would you be in favor of them?

Yes, if he brings in hoards of H1Bs lowering the salaries of software engineers across the board.

http://www.fwd.us/

Re: Have US Income and Wealth Inequality Actually Increased?

#45

Post by examancer »

mchusma wrote: post #29
examancer wrote: post #12

This is a side show. Whether or not the statistics show rising or falling income inequality is irrelevant. There is massive income inequality. Its trajectory isn't nearly as large of an issue as the status quo, which is pretty dismal. Until that gini coefficient is much better, and we have no one living below the poverty line, we still have a ton of work to do. This article seems to be making a shallow point only to…

I'm not sure you read the article, because you make some of the same points I do. "There is massive income inequality. Its trajectory isn't nearly as large of an issue as the status quo, which is pretty dismal." The point of the article is that inequality is itself isn't a good metric. "The right thing to do is to keep working to solve the core problem....Maybe even consider doing what Switzerland is considering, and…

I read the article and recognize your closing arguments are much more nuanced than the thesis of the article suggests. I apologize for not making that clear in my post.

I still feel the overall point attacking the statistics of income inequality is much more likely to be used as a gavel to silence those working to improve the status quo. Articles like this are often cited when people try to take action to correct income inequality, regardless of what the article ultimately advocates.

That said, I do think its important to get the statistics correct. I don't think you said anything wrong (except maybe with your definition of gini, as others have noted). Your headline is a bit salacious, but ultimately my concern is how this article might be used by others.

Re: Have US Income and Wealth Inequality Actually Increased?

#46

Post by cobrausn »

mjn wrote: post #35
stretchwithme wrote: post #33

Income inequality is not a bad thing. People are very different in what they are capable of producing. If you want to produce paper napkins by hand 10 hours a week and someone else chooses to make them by machine 40 hours a week and its the same product, why should you both take home an equal income? "Oh" they say "we just want to make it less unequal than it is, not equal." Isn't that why we pay all these taxes and…

Why should you take home a different income? I don't feel that the fact that I'm a computer scientist, which at the moment happens to pay well, ethically entitles me to more resources than other people. If anything I feel a bit guilty taking home several times the income of the guy who's been showing up at 7am every morning to replace my roof; my job is a lot more pleasant and enjoyable, and yet that in itself isn't…

For better or for worse, the guy working hard to replace your roof is easier to replace than you are - this is because you have a skill set he doesn't that takes a lot of time and resources to develop. In addition, your work (likely) brings in more money to a company than his. As such, you get paid more.

As an aside, have you ever noticed that (certified) plumbers and electricians make a lot of money? Same reasoning.

I don't have a problem making more money now that I made myself valuable. I started off in retail, where you literally are one step away from being replaced by an automated kiosk.

Re: Have US Income and Wealth Inequality Actually Increased?

#47

Post by mchusma »

skywhopper wrote: post #15

Lots of things are wrong with this article, not least of which is that the writing is so unclear that it's hard to make enough sense of his argument to point out what's wrong. That said, the main takeaway here is that the author doesn't consider growing income disparity to be a problem. Perhaps a better way to look at it is this: growing income disparity is a symptom of the real problem, which is that the economy has…

Author here: I write for mostly my own thinking and hadn't actually put something out in a week so wanted to get it out the door. Sorry to the extent it was unclear.

I think psychologically you are correct in that most people would probably be less upset with income disparity if the economy was doing better overall. We are in a long, slow recovery.

I do disagree with your main premise. I think in the technology economy we would see increasing income disparity over time. My only real solution to this problem is basic income.

Re: Have US Income and Wealth Inequality Actually Increased?

#48

Post by digikata »

ctdonath wrote: post #17
abduhl wrote: post #10

Earlier quoted context omitted.

The problem is that poverty is continually redefined as standard of living and opportunities increase. Poverty used to be living in a shanty town during the dust bowl where you could possibly die of dehydration any day. Poverty now is living in a house where you only get basic cable and don't have the money to buy a nice steak dinner.

Some 87% of world population lives below the "poverty line" as defined in the USA. Without everyone sharing a sensible consistent definition of the word, the discussion will come to nothing but blows.

Different places in the world should have different poverty lines related to the purchasing power needed to acquire at least the basic living needs: food, shelter, and clothing. (and healthcare)

Comparing the numerical figure of the poverty line around to world is nonsensical.

Re: Have US Income and Wealth Inequality Actually Increased?

#49

Post by logfromblammo »

I'm not all that impressed with graphs over several decades of certain government-published statistical indices, because they have a nasty habit of redefining them, and those fractures are almost never indicated on the charts.

So when you show me the Gini coefficient over time, the first thing I wonder is if either the methods of calculating it or the methods of collecting the data have changed during that time.

Anecdotally, it is readily apparent to me that inequality is increasing, and not just in wealth or income. It is also increasing with respect to health care, legal processes, job satisfaction, consumer confidence, and trust in institutions.

It feels a lot like the guy trying to figure out what is stuck to the seat of his pants in the instant before the bartender gives him the bum's rush out the door. And the bartender himself doesn't realize that the guy is the only one left in the bar that actually intends to pay for his drinks. So really, just cruel and sad all the way around--America since 1970.

The only people who now have the ability to change the system see absolutely no benefit to themselves in doing so.

Re: Have US Income and Wealth Inequality Actually Increased?

#50

Post by base698 »

I do think income inequality is an issue. In part because people above a certain threshold have no pain when they get towed, get a traffic citation or go to the doctor. The people below suffer greatly and enter economic ruin even if they get a parking ticket. Hell, skipping jury duty isn't even an issue, $1000 fine is nothing for some.

On the other hand people aren't really starving, and I don't see things like the Haymarket Affair yet. Maybe it won't be an issue this time around because factory farming has fed the world for cheap enough that people don't starve.

http://en.wikipedia.org/wiki/Haymarket_affair

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