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Economic Inequality: It’s Far Worse Than You Think

scientificamerican.com

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Re: Economic Inequality: It’s Far Worse Than You Think

#31

Post by tormeh »

dandare wrote: post #4

The fact that someone is rich does not mean he took anything from you, no matter how poor you are. Statements like "If poor people knew how rich rich people are, there would be riots in the streets" are not only stupid but also dangerous.

The allocation of money is about the same as the allocation of the economy's output. Someone's getting more out of it than others. If "him" disappearing from the economy would damage the economy more in dollars than he earns, then he's not taking your money. Otherwise he is. My guess is that the filthy rich add orders of magnitude less to the economy than they take out. Warren Buffet and Steve Jobs are probably exceptions, but I don't complain about them. Most CEOs are probably fine. It's inheritors that are the real problem.

Re: Economic Inequality: It’s Far Worse Than You Think

#32

Post by adaml_623 »

kokey wrote: post #5

I always feel a number of important metrics are left out, either by accident or on purpose, when people talk about inequality. Most importantly when it comes to wealth itself, by most measures there is a very, very long tail of people with no wealth. 'No wealth' ranges from the most poor, to those living from paycheck to paycheck all the way to those who have as much debt as their assets. Many of these people are fin…

No I think you are wrong to want to include those metrics.

You are including people who are probably in the bottom 80%. And they may be fine in the long run. Certainly a large mortgage is not a terrible thing if you can pay for it. And they may make it to CEO but statistically they won't.

This article is about the top 0.1% and the fact that the slice of the pie owned by the 0.1% is increasing faster than the size of the pie. People aren't unhappy with other being wealthy (on average) but a system that means the gap is widening implies that something in the system needs to change.

Sorry to be negative but I think it's important to focus on the problem raised by the article.

Re: Economic Inequality: It’s Far Worse Than You Think

#33

Post by sp332 »

brador wrote: post #24
sp332 wrote: post #21

Earlier quoted context omitted.

The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday.

Time magazine readers are not an unbiased sample of America. Not even close.

In terms of income it's not that bad though. In 2011 the average Times subscriber had somewhat higher household income than average, but not that high. http://stateofthemedia.org/files/2012/01/25-Mags-Datablog-20... But they are also 45 or older, so they'd have less time to look forward to being in the top 1% "someday". http://stateofthemedia.org/files/2012/01/26-Mags-Datablog-20...

Re: Economic Inequality: It’s Far Worse Than You Think

#34

Post by mason240 »

ryandrake wrote: post #2

And, it's only going to get worse while [1] 39% of Americans either believe they are already among the top 1% or believe that they one day will be. If your mentality is one of "Don't tax the top because that's me (or will be)", you're going to constantly vote against your own economic self-interest, and continue to support policies that help the real rich get ultra-rich. 1. http://www.nytimes.com/2003/01/12/opinion/t…

This is a total strawman that advocates of higher taxes tell each other.

It's a pretty effective one because it allows those people handwave off anyone who disagrees with them.

Re: Economic Inequality: It’s Far Worse Than You Think

#35

Post by Thriptic »

snarfy wrote: post #25

The estate tax should be near 100%. We do not need dynasties. I don't mind people making the wealth, but they can't take it with them. It shouldn't just transfer to their children.

What is the incentive to continue working once you hit a threshold to comfortably retire with a good quality of life then?

Might a 100% inheritance tax remove significant capital from the markets which would affect growth?

In this scenario, what is stopping people from transferring all of their money to their children before they die at a much lower tax rate?

How would assets like real estate be handled?

Re: Economic Inequality: It’s Far Worse Than You Think

#36

Post by dandare »

maxxxxx wrote: post #9
dandare wrote: post #4

The fact that someone is rich does not mean he took anything from you, no matter how poor you are. Statements like "If poor people knew how rich rich people are, there would be riots in the streets" are not only stupid but also dangerous.

You could argue that they took something from other people by claiming a larger share of economic output for themselves. Something seems wrong when the largest share of economic growth goes to the top as we have seen over the last decades. And I believe this is not because of some economic law but because the top 1% have made the rules to their favor.

a) you have democracy, the top 1% are heavily influencing it but that is far from making the rules. 60% of Americans don't vote. b) "Something seems wrong with..." -> http://en.wikipedia.org/wiki/Argument_from_ignorance

Re: Economic Inequality: It’s Far Worse Than You Think

#37

Post by happyscrappy »

sp332 wrote: post #21
brador wrote: post #7

Earlier quoted context omitted.

You honestly believe that people think "Don't tax the top because that's me (or will be)"? I suggest people believe their jobs and technological innovations we all enjoy are on the line if the rich are taxed more. If that is true or not is a separate conversation, but I don't think it's 39% of Americans think they will reach the 1%. That's absurd and the kind of thing you hear in mass media sound bites.

The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday.

They are certainly in the richest 1 percent worldwide.

Re: Economic Inequality: It’s Far Worse Than You Think

#38

Post by venomsnake »

kjjw wrote: post #12
brador wrote: post #7

Earlier quoted context omitted.

You honestly believe that people think "Don't tax the top because that's me (or will be)"? I suggest people believe their jobs and technological innovations we all enjoy are on the line if the rich are taxed more. If that is true or not is a separate conversation, but I don't think it's 39% of Americans think they will reach the 1%. That's absurd and the kind of thing you hear in mass media sound bites.

I'm quite sure it is completely true. In aggregate it is an absurd view for so many people to hold, but that doesn't mean it isn't held. Look at where we are! Hacker News - 10,000s of people talking around start ups! Pretty much none of us will "make it." Yet here we are.

Not sure why you are downvoted. Even pg admitted that their ROI are absurd, so they must (and can afford to) fund thousands of startups to have success at the current winner takes all digital economy.

Re: Economic Inequality: It’s Far Worse Than You Think

#39

Post by dwaltrip »

I would love to see these types of metrics for other domains. I think any technical question about some distribution across the american population will produce results that contrast with reality, simply because people don't know how to reason about mathematical distributions or large numbers very well. This isn't to say that America does not have an issue with economic inequality, of course.

Re: Economic Inequality: It’s Far Worse Than You Think

#40

Post by spuz »

spuz wrote: post #15

Is it just me, or does the article contradict its own conclusion? > They asked about 55,000 people from 40 countries to estimate how much corporate CEOs and unskilled workers earned ... the patterns were the same for all subgroups, regardless of age, education, political affiliation, or opinion on inequality and pay > One likely reason for this is identified by a third study, ... that suggests that our indifference l…

To answer my own question:

The 2014 research of 40 countries actually shows that Americans estimate a relatively high inequality of CEO to unskilled worker pay (a ratio of 29.6 compared to an average estimate of 10.0). However, the actual pay ratio for American CEOs is much much higher than in any other country's (354 - as mentioned in the article. The next highest actual pay ratio is in Switzerland at 150 times while most countries have a ratio below 100). The research states:

"American respondents (n = 1,581) in our data estimated the ratio of estimated incomes of CEOs to unskilled workers to be 29.6, demonstrating that Americans drastically underestimated the gap in actual incomes between CEOs and unskilled workers."

So, yes there is a significance in the figures for America both in terms of estimated inequality and actual inequality that shows that American CEO pay is significantly less egalitarian than other countries and Americans in general significantly less aware of this than other countries.

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