Do the Rich Capture All the Gains from Economic Growth? • Hacker News Board

Re: Do the Rich Capture All the Gains from Economic Growth?

#121

Post by someone7x » Thu, Oct 25, 2018, 7:23 PM UTC

TangoTrotFox wrote: post #41

On top of the studies within the article, there are other really interesting papers. Some time back I was searching information on the chiseling out of the middle class, and I found this paper [1]. And the paper does describe that chiseling out. In 1979 the middle class controlled 46% of all income, and the upper/rich classes controlled 30%. Today (as of 2014) the rich and upper class control 63% with the middle clas…

There's a popular book called "Factfulness" that explores the dynamic you're describing: the world is generally getting better and the media is institutionally incapable of reporting it (because they thrive on sensation instead of facts).

If you are swayed by facts and data, it's probably right up your alley.

Re: Do the Rich Capture All the Gains from Economic Growth?

#122

Post by eiaoa » Thu, Oct 25, 2018, 7:23 PM UTC

weberc2 wrote: post #112

eiaoa wrote: post #107

Earlier quoted context omitted.

> It's not "shitting on" anyone; it's how (efficient) economics works. You don't earn more money unless you're producing more value. If a steel mill increases its output by way of some new automation, the accounting department and janitorial staff are unlikely to see a wage increase. The folks on the assembly line are also unlikely to see a wage increase because they're not more productive. The people who will be pri…

Good question! That’s the “investment” part. They risked the funds to create the value in the first place in exchange for returns on their investment.

> Good question! That’s the “investment” part. They risked the funds to create the value in the first place in exchange for returns on their investment.

That's not really an answer. You're just saying their entitled to the passive returns from ownership because they owned something else. It's circular. Anyone could take a risk with the funds if given access to them, even the janitors and line workers.

Re: Do the Rich Capture All the Gains from Economic Growth?

#123

Post by imh » Thu, Oct 25, 2018, 7:26 PM UTC

This is an important way to look at the data. By looking at individuals over time, it essentially quantifies social mobility. But then you have to take it a step further. Does the difference in individuals' mobility over time change over time? In other words, has social mobility gotten better or worse? Only then are you comparing apples to apples in pessimism/optimism.

Re: Do the Rich Capture All the Gains from Economic Growth?

#124

Post by JustSomeNobody » Thu, Oct 25, 2018, 7:28 PM UTC

snikeris wrote: post #111

TheOtherHobbes wrote: post #96

Earlier quoted context omitted.

https://www.cnbc.com/2018/07/19/income-inequality-continues-... https://inequality.stanford.edu/publications/20-facts-about-... https://www.businessinsider.com/inequality-is-deepening-us-e... Will that do, or do you need more elaboration?

Thanks, I'll check these out. Inequality seems like a fact of life, so I'm wondering what's so horrifying about it. Edit: I was really hopeful for this Stanford resource, but I'm not even sure these "are facts that everyone should know". > 10. Residential Segregation tldr: Rich people and poor people don't live in the same areas. > 13. Bad Jobs tldr: Some people have bad jobs, and if you don't work full-time somewher…

Not horrifying: When your refrigerator dies and you can go buy another without blinking.

Horrifying: When you misplace a $20 bill and now you can't pay your rent.

It's really simple to understand.

Re: Do the Rich Capture All the Gains from Economic Growth?

#125

Post by maxxxxx » Thu, Oct 25, 2018, 7:28 PM UTC

curun1r wrote: post #118

rwcarlsen wrote: post #51

While attempting to refute the idea that the poor haven't improved their station since the 70s, they cite a lot of stats that show most households make more income than their parents did (inflation adjusted), but they completely neglect to account for the huge factor that is the number of people working (or cumulative hours worked) per household in order to achieve that improvement. In the 1970s, there were a lot mor…

They also likely use inflation statistics that are problematic, at best. When considering consumables, we've had pretty reasonable inflation and people are making more than their parents. But if you were to calculate inflation based on prices for things that don't benefit from advances in our production abilities (commodities, equities, housing, education, health care, etc), we'd be making nowhere near as much as pre…

Exactly. Low inflation doesn't help much if your salary increases get eaten up by housing, education hand healthcare. Rent, health care and education should be counted into inflation numbers.

Re: Do the Rich Capture All the Gains from Economic Growth?

#126

Post by sj3k » Thu, Oct 25, 2018, 7:31 PM UTC

JAlexoid wrote: post #95

refurb wrote: post #83

Earlier quoted context omitted.

I think you're missing the point of the article. When you actually follow the same people , the poor see the greater increase in income than the most wealthy. You may poo-poo a $30K inflation-adjusted increase in pay, but that moves someone from the lower class to the middle class. Isn't that the goal?

That's social mobility, not wage growth. Those are not the same thing. It's akin to arguing that wage growth is looking at income of a person that was flipping burgers while in school 10 years ago now leads an engineering team. It's not the same job, not the adequate comparison. I presume you work in IT related field, so imagine you decided to take a break and be a parking lot attendant... You cannot then quote your…

Yeah right? I read this and thought 'Yes, wealthy people stay quite wealthy throughout their lives, while poor people work their way into higher salaries.'

Re: Do the Rich Capture All the Gains from Economic Growth?

#127

Post by weberc2 » Thu, Oct 25, 2018, 7:32 PM UTC

eiaoa wrote: post #122

weberc2 wrote: post #112

Earlier quoted context omitted.

Good question! That’s the “investment” part. They risked the funds to create the value in the first place in exchange for returns on their investment.

> Good question! That’s the “investment” part. They risked the funds to create the value in the first place in exchange for returns on their investment. That's not really an answer. You're just saying their entitled to the passive returns from ownership because they owned something else. It's circular. Anyone could take a risk with the funds if given access to them, even the janitors and line workers.

Then I'm not sure what answer you're hoping for.

> You're just saying their entitled to the passive returns from ownership because they owned something else.

Not sure what you mean here, but I agree that investors are entitled to the returns stipulated in the investment agreement. Hopefully this isn't a controversial position.

> Anyone could take a risk with the funds if given access to them, even the janitors and line workers.

Yes, janitors and line workers can (and regularly do) invest their finances as well, frequently for the very company for which they work (although they are very likely not investing enough to be principal owners, because even very small companies tend to be very expensive relative to the average salary of a janitor or line worker).

Re: Do the Rich Capture All the Gains from Economic Growth?

#128

Post by harimau777 » Thu, Oct 25, 2018, 7:33 PM UTC

weberc2 wrote: post #93

billmalarky wrote: post #66

Earlier quoted context omitted.

>I don't know why anyone should feel entitled to economic growth if they didn't participate in it in any way. Tangentially related point: The problem occurs when advances in technology make it so the vast majority of humans are literally _unable_, not to be mistaken for _unwilling_, to participate in economic growth. In this scenario inequality shoots through the roof and that reasonably leads to instability and viol…

> A pragmatic wealthy person in this scenario should see wealth redistribution as a wise investment, not a cost, seeing as the "let them eat cake" alternative is less desirable if you like to keep your head. This seems like a false dichotomy in that (for the foreseeable future) we have other options, like retraining people whose jobs have been automated away. This is strictly better (read "less invasive" and "more ec…

Retraining might equalize things enough to prevent violent insurrection. However, if a fair share of profit increases only go to executives/shareholders, then I'm not sure we can train people for jobs high enough up the hierarchy to actually reach a just system.

Re: Do the Rich Capture All the Gains from Economic Growth?

#129

Post by oh_sigh » Thu, Oct 25, 2018, 7:33 PM UTC

kevin_thibedeau wrote: post #108

SketchySeaBeast wrote: post #97

Earlier quoted context omitted.

Was that large junior wage due to the 2000's cyber boom and was later readjusted to the new reality? Or has your wage actually remained stagnant / rose slower than inflation since that time?

I started at $55K in 2000. That was in line with normal and not part of the dotcom boom.

So you make $80k now or so? What has your career path been like? I can't imagine a senior engineer only making 80k/yr

Re: Do the Rich Capture All the Gains from Economic Growth?

#130

Post by JAlexoid » Thu, Oct 25, 2018, 7:34 PM UTC

refurb wrote: post #114

JAlexoid wrote: post #95

Earlier quoted context omitted.

That's social mobility, not wage growth. Those are not the same thing. It's akin to arguing that wage growth is looking at income of a person that was flipping burgers while in school 10 years ago now leads an engineering team. It's not the same job, not the adequate comparison. I presume you work in IT related field, so imagine you decided to take a break and be a parking lot attendant... You cannot then quote your…

You can't have social mobility without wage growth, so I'm not sure what you're getting at. And it doesn't matter if it's not the same job. The argument has always been about opportunity and the key point of this article is for people who start out in the lowest income quintile, the average wages doubles over time. That's opportunity.

But this isn't wage growth. When you switch between different socioeconomic profession groups, the wage of your previous socioeconomic group doesn't change because your wages have changed. Socioeconomic group isn't for life, you know. Once you become rich, you stop being poor.

Except that wage growth debate isn't about opportunity. He's trying to argue about oranges, when the initial issue is about apples.

Arguments about wage growth are about costs, productivity and compensation.

As in - if you're 2x more productive at doing the same job, then the gains are deposited somewhere.

The argument in the end is that productivity gains are not distributed at a fair level. Equal isn't ever a requirement for a stable society, fair is enough.