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Do the Rich Capture All the Gains from Economic Growth?

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

#151

Post by rwcarlsen »

watwut wrote: post #147
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…

Then again, your counterpoint completely ignores amount of household work needed in 1970 versus 2018. Cooking, cleaning, washing dishes and cloth now are incomparable to 1970. Changing diapers is a lot less work now too.

Some things have become more difficult since then too. Free range parenting is very frowned upon - and micro-managing kids takes a lot of time and effort.

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

#152

Post by refurb »

munificent wrote: post #79
pwaivers wrote: post #59

Earlier quoted context omitted.

> Surprise! Over 30 years poor people gained an average of almost $30k in income! I sure fucking hope someone who started at minimum wage in 1980 is making $30k more today. Well this is an important part of his argument. The people's wages are not stagnant, but rather they went up an 30K (including inflation). That fact this their wages went up is not trivial.

But that's not a useful fact. People are going to get older regardless of what economic policy choices you make, so observing that people go through economic changes as they age isn't actionable. By analogy, if you're trying to choose effective dietary policy, a study that shows people got taller over the past twenty years isn't helpful if you measure the same people. All it shows you is that children grow larger as…

What is the connection between aging and wages? Sure, most people make more money when they get older, but this was looking at ~40 to retirement when people are already at their peak earnings.

I wouldn't take it for granted that the older you are the more you make.

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

#153

Post by refurb »

JAlexoid wrote: post #130
refurb wrote: post #114

Earlier quoted context omitted.

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…

It's just as much wage growth as the typical "wages haven't grown for the lowest quintile", which doesn't track what the actual job was either.

And the folks tracked in this study were from 40 to retirement, so I don't see a change in career being a major driver for the income growth.

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

#154

Post by sangnoir »

krupan wrote: post #144
old-gregg wrote: post #47

The gains have been looted by the healthcare providers. It is not uncommon for health coverage to exceed $2k/mo for a typical family of 4, that's $24k/year. The median US household income is $59k, so the total comp is $83k/year. See the gains now? This absurd amount is not reflected in a paycheck and one may think "my job pays for it" but that is still your money.

On the other hand, my medical supplies and devices fund in my IRA is way up

Not to get all Marxist - but using IRA's/401k's to get labor to go all-in on the stock-market was one hell of a judo move by the American capital class.

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

#155

Post by maxxxxx »

komali2 wrote: post #36
SrslyJosh wrote: post #23

"Some studies leave out important components of compensation such as fringe benefits which have become increasingly important in recent years." And why are those fringe benefits increasingly important, eh?

And what kind of fringe benefits are minimum wage earners pulling? I hear Starbucks gives health insurance, for example, anyone else?

My company gives only nominal raises each year but we get bagels and donuts once a week.

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

#156

Post by refurb »

sj3k wrote: post #126
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…

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.'

Yeah, but this runs exactly counter to the common story that the "rich get richer and the poor get poorer".

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

#157

Post by AnimalMuppet »

eiaoa wrote: post #134
weberc2 wrote: post #127

Earlier quoted context omitted.

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 li…

> Not sure what you mean here, but I'm saying investors are entitled to the returns stipulated in the investment agreement. You said "...(efficient) economics [means y]ou don't earn more money unless you're producing more value." However, an owner can be nearly completely idle yet still profit handsomely, by simply paying others a modest fee to increase her fortune, so your statement isn't really true.

Nearly completely idle, except for the part about building a whole new steel mill. That's... not very idle.

And it is exactly that creation of a new steel mill that is where the value is going to be created - by the steel mill producing it.

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

#158

Post by harimau777 »

weberc2 wrote: post #135
harimau777 wrote: post #128

Earlier quoted context omitted.

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.

It's not really a tractable problem without concretely defining 'fair' and 'just'. It seems like you're driving toward something interesting (if only theoretical); I'd be really interested to hear from an economist.

That's a good point. I don't have much theoretical background in economics so I feel like I'm unintentionally speaking vaguely due to not knowing the correct/best terms and theories.

I think the way I would define fair (and obviously this is somewhat a value judgement rather than objective fact) is that: I don't think its unjust that a CEO gets payed more than a line worker, but when the company succeeds then I think the increase in profits should be divided up such that the ratio of their incomes stays about the same.

Also, when I say "just" I don't mean that in an extreme way where if profits aren't divided up 100% fairly then employees are oppressed wage slaves. Even if my ideal system where implemented things would still be subjective. For example, what if my employer implemented very generous benefits but didn't pay quite as well?

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

#159

Post by snikeris »

maxxxxx wrote: post #150
snikeris wrote: post #111

Earlier quoted context omitted.

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…

The fact that it's growing is a problem.

Why?

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

#160

Post by frgtpsswrdlame »

onlyrealcuzzo wrote: post #132
maxxxxx wrote: post #125

Earlier quoted context omitted.

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.

Wait. Aren't rent, healthcare, AND education all included in the eight components of CPI? Isn't that how the government measures inflation? I think one of the big things left off is housing prices. But I'm pretty sure rent, healthcare, and education are part of it: https://www.bls.gov/cpi/factsheets/medical-care.htm http://webapps.dol.gov/dolfaq/go-dol-faq.asp?faqid=94

They are. The BLS puts together a 'market basket' that includes those items. However, it is the proportion that matters. Necessities like rent and healthcare are a larger proportions of expenses for the poor than they are for the middle and upper classes. When the market basket is created it takes consideration of everyone's expenses and so the weighting for healthcare costs say, falls below what it is that poor people spend on average and above what rich people spend on average (as a percent). Because these are a few of the spending categories that are inflating the fastest it is in this way that the CPI understates inflation for the poor and overstates it for the rich.
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