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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?

#291

Post by orbitingpluto »

tasuki wrote: post #273
orbitingpluto wrote: post #255

Earlier quoted context omitted.

But then you'd need to include things that they have that we don't. The cost of activities for children has skyrocketed beyond belief compared to 40 years ago.

Wasn't the primary activity for children 40 years ago "go play in the street with your friends"? Has that become any more expensive?

Yes, outside wandering has been replaced with, "here's an iPad".

But if you're talking about any sort of instruction I'd say the prices have tripled. If you're talking about something like organized hockey? Prices are astronomical.

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

#292

Post by vannevar »

russroberts613 wrote: post #141

The whole point of much of this analysis (and the videos shown) is that household income can be very misleading. But most if not all of the analyses I report on are for individuals over time. So changes in the number of earners are actually more of a problem for most of the gloomy studies that look at households by quintile. Incredibly, the proportion of households with two earners is LOWER in 2014 than in 1980 becau…

As you're no doubt aware, these kinds of analyses can be tricky when dealing with fat-tailed distributions, such as income. Using the median can hide exactly the kinds of large disparities that Piketty, et al, are talking about. Likewise, saying that 93% of the poor exceeded their parents' income while only 70% of the wealthy did so leaves out the most important number, which is the aggregate amount by which each group benefited.

I don't believe anyone has made the claim that the poor have gotten nothing; only that they have gotten a grossly disproportionate share of growth. Nothing in your article refutes that premise. Indeed, you seem to go out of your way to avoid actually addressing it directly.

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

#293

Post by TimJYoung »

spectrum1234 wrote: post #257
TimJYoung wrote: post #72

Earlier quoted context omitted.

Correct me if I'm wrong, but is he trying to say that if a lower-to-middle-class person now makes $10K more than his parents (who made $40k combined), that somehow that is better than the wealthy person that now makes $10K less than his parents (who made $1.2m combined) ? I think this deserves a "man on the street" survey to see which income most people would prefer...

Of course this is better. The poor are improving the most in absolute terms in your example.

Better is a very subjective term here, which was my point. The lower-to-middle class person is still subject to all kinds of economic issues that are of zero concern to the wealthy person.

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

#294

Post by TimJYoung »

weberc2 wrote: post #99
TimJYoung wrote: post #74

Earlier quoted context omitted.

If you pursue "efficiency" to extremes like this, you're going to bump up against political and social realities that are going to ruin your efficiencies in ways that make giving pay increases seem like a no-brainer.

1. I don't think this is true in any meaningful capacity; it just means we need to find ways to keep a critical mass of people involved in productivity. 2. This is a different argument than the one to which I was responding (which seemed to be something like, "it's mean to have the opinion that economic systems reward productivity").

You cannot pursue "pure capitalism" to its logical end. Like "pure communism", it just ends in misery and suffering for everyone.

"Productivity" cannot be re-defined so that those that do the actual labor are removed from the equation. If a company or firm produces more revenue, than it's a simple value judgement as to how that revenue is distributed, and, right now, those at the top of company management and investors are the only people making that decision. Organizations like unions simply change how that decision is made by re-balancing the power involved with the decision. You may want to keep all of the revenue gains from your automation to yourself and your investors, but you may not be able to if it means that most of your workforce walks off the job. Likewise, you can automate your entire operations with robots and computers, but good luck trying to sell whatever it is you're producing when everyone is (effectively) unemployed.

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

#295

Post by ArchTypical »

fzeroracer wrote: post #231
hopefulengineer wrote: post #89

Earlier quoted context omitted.

It's supply and demand 101, illegal immigration combined with offshoring lowers wages and increases profit margin for the wealthy. Low wage jobs are taken by illegal immigrants, forcing US citizens to take on debt to go to college, where wages are also lowered because there are now thousands of college grads desperate to pay off their debt that can't be eliminated through bankruptcy due to congress being lobbied. A w…

I'd like you to actually cite those claims you've made, because so far you've just repeated a lot of nonsense I hear from people that refuse to back up their arguments with empirical evidence. Immigration is hardly the issue. Low-wage jobs exist because of the lack of labor protections for workers resulting in companies looking for the cheapest and most efficient labor they can, even if it means tapping desperate peo…

> I'd like you to actually cite those claims you've made

You're making a claim in face of evidence. YOU back it up.

Choose an urban area at random... https://www.payscale.com/cost-of-living-calculator/Washingto... https://www.payscale.com/cost-of-living-calculator/New-York-...

etc - Go wild.

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

#296

Post by skybrian »

GhostVII wrote: post #242
skybrian wrote: post #209

Earlier quoted context omitted.

The inflation rate does include rent, or "imputed rent" for home owners. However, it's an average of what people actually pay, including people who somehow got a sweet deal on housing costs, through rent control or buying their house a long time ago or whatever. It's not going to match the prices you see advertised when you're looking to move.

Wasn't that also the case historically though? Rent control has been around for a while.

Sure, it's not new.

Another way to put it is that housing costs used to calculate inflation will lag market prices, because the cost is often locked in for a while. When prices go up, people often don't immediately start paying the new price.

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

#297

Post by alehul »

gowld wrote: post #250
alehul wrote: post #240

Earlier quoted context omitted.

Wouldn't this be addressed by the fact that, as you said, we now have a new standard of multi-income households? If everyone in America was in a single-income household, and then we all became, for instance, two-income households, wouldn't it make sense for individual incomes to drop by half?

Two-income households caused wages to drop due to labor oversupply.

Yes, exactly, and that shouldn't be a factor in the argument that wages are decreasing because the rich are capturing all economic gains. Looking at household income can (very roughly) remove that from factoring into the data.

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

#298

Post by skybrian »

Gibbon1 wrote: post #261
gruez wrote: post #241

Earlier quoted context omitted.

>However, it's an average of what people actually pay, including people who somehow got a sweet deal on housing costs which is arguably the more accurate way of measuring consumer prices.

That not accurate because important information about the spatial distribution gets filtered out. Economists are pretending their statistics are filtering out 'noise' when they are really filtering out data they don't want people to see.

Inflation is an average. Newspapers usually report the national average, but there are a lot of other averages and they aren't being kept secret. This page has data for California:

http://www.dof.ca.gov/Forecasting/Economics/Indicators/Infla...

I don't think anyone is all that interested in a bunch of dry statistics. No conspiracy is needed.

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

#299

Post by softawre »

JimboOmega wrote: post #174
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…

That, to me, is what really seals it all as ridiculous. My parents had the standard of living they had with only my father working and in a fairly normal government job. That as enough to support my mom and 2 children while also saving for retirement. That standard of living now would require both parents working and being rather successful in their white collar careers. Even as a reasonably successful person in an a…

Tons of people support whole families on a tech salary. I myself do it, as do 3 people on my team.

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

#300

Post by [deleted] »

petersellers wrote: post #185
snikeris wrote: post #136

Earlier quoted context omitted.

Okay, being poor can be horrifying. But I don't see what's horrifying about the fact that some people have more wealth than others.

The fact that inequality exists is not the problem, it's the severity of the inequality that is the problem. Take an extreme example - out of a population of 1000 people you have 1 person owning 99% of the wealth, with the other 1% distributed to the other 999. Does that seem like an efficient, properly operating economy to you? Obviously there is some balancing needs to happen, the trick is figuring out where the fu…

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