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Have US Income and Wealth Inequality Actually Increased?

chawkins.org

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Re: Have US Income and Wealth Inequality Actually Increased?

#11

I have yet to see a solid discussion of wealth inequality that removes the outliers. Given that 85 people have half the worlds wealth, it would appear to me that a study which looks at the numbers without those people would be more interesting in helping us understand how our systems and markets are moving wealth for 99.999% of us. Even still, the goal should not be balanced wealth but continual upward mobility for a…

Wealth inequality is actually not all that interesting, income inequality is all that really matters.

Most of the US doesn't save a significant percentage of their income. And while that may prove a problem when they go to retire, it doesn't mean they aren't receiving their fair share.

Re: Have US Income and Wealth Inequality Actually Increased?

#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 encourage inaction on the core problem. The trajectory of income inequality is a red herring trying to distract us from the harsh reality of our present wealth, opportunity, and income inequality.

The right thing to do is to keep working to solve the core problem. Restore the US to a progressive tax system instead of regressive. Pass living wage laws. Improve the social safety net. Maybe even consider doing what Switzerland is considering, and give everyone (rich and poor) a reasonable guaranteed income as an alternative to expensive and sometimes ineffective welfare programs.

At the small scale, volunteer locally, especially anything having to do children and improving their education.

Unfortunately, along the way we will be fed a constant stream of garbage articles like this, held up with straight faces by a chorus of onlookers telling us there is no problem to fix. Look outside. There are poor and hard working people out there who aren't being rewarded for their hard work and are severely struggling. No amount of fancy statistics bending will justify inaction.

Re: Have US Income and Wealth Inequality Actually Increased?

#13
post #7

[edit: the author has since corrected the Gini definition in the article] I've never encountered the Gini coefficient before, but reading up on it on Wikipedia, the author appears to have the measure flat backward. "A score of "0" on the Gini coefficient represents complete equality, i.e., every person has the same income. A score of 1 would represent complete inequality, i.e., where one person has all the income and…

Glad someone else caught that. Another glaring issue with the Gini coefficient is that it tracks income inequality and not wealth inequality. It's well known that the rich don't make their money via income but rather through ownership.

TL;DR: The Gini coefficient is a shitty metric to make any conclusions, especially when taken in a vacuum.

Re: Have US Income and Wealth Inequality Actually Increased?

#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 hasn't really done all that well since the end of the 90s.

A strong economy that's serving all individual participants well would result in shrinking income disparity over time. The fact that we don't see this is indicative of some major problems.

Re: Have US Income and Wealth Inequality Actually Increased?

#16
A new blog post [1] from Ross Douthat addresses this in an interesting way.

Part of the inequality picture is that demographic changes in recent decades, with women becoming a significant part of the workforce, and the rise of single-parent households, has skewed family-based inequality significantly. In the referenced article, Douthat considers the underlying causes of that. Essentially, are the changing rules in society (taboos about sex, marriage, divorce, etc.) dooming those who already don't have a strong societal backdrop to guide them?

[1] http://douthat.blogs.nytimes.com/?module=BlogMain&action=Cli...

Re: Have US Income and Wealth Inequality Actually Increased?

#17
post #10

I have yet to see a solid discussion of wealth inequality that removes the outliers. Given that 85 people have half the worlds wealth, it would appear to me that a study which looks at the numbers without those people would be more interesting in helping us understand how our systems and markets are moving wealth for 99.999% of us. Even still, the goal should not be balanced wealth but continual upward mobility for a…

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.

Re: Have US Income and Wealth Inequality Actually Increased?

#18
post #7

[edit: the author has since corrected the Gini definition in the article] I've never encountered the Gini coefficient before, but reading up on it on Wikipedia, the author appears to have the measure flat backward. "A score of "0" on the Gini coefficient represents complete equality, i.e., every person has the same income. A score of 1 would represent complete inequality, i.e., where one person has all the income and…

The author also claims the Gini coefficient doesn't take into count population growth and so skews the number. That is completely wrong. It's calculated using the Lorenzo curve which which is a per capita calculation.

Re: Have US Income and Wealth Inequality Actually Increased?

#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?

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