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US Income Inequality: All for the Top 1%

nytimes.com

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Re: US Income Inequality: All for the Top 1%

#61

Post by viraptor »

sn9 wrote: post #47
Jack000 wrote: post #13

Earlier quoted context omitted.

wait, wouldn't scaling income by a constant multiple be the same as not changing anything? Your income and expenses are both doubled. this would just kill the bank accounts of anyone holding cash.

Why would your expenses double?

If everybody's income raises 2x it means they're paid 2x the previous amount. "they're paid" means someone's expenses are 2x higher to cover it. (you could guess, everyone's expenses, but actually... it's interesting how would that be distributed)

Re: US Income Inequality: All for the Top 1%

#62

Post by gcb0 »

frgtpsswrdlame wrote: post #33
arcanus wrote: post #2

Real title was, 'Our Broken Economy, in One Simple Chart'. Despite some of the recent coverage, this chart indicates that gains are not going to the top 20%: they are going to top 1%, and particularly To be clear, this is not many programmers: "In 1980, the top 1% of adult earners in the U.S. made $420,000 a year, on average (before taxes and measured in 2014 dollars) — 27 times as much as the average for the bottom…

I'm not sure we can just blame this on the tiny minority of mega-rich at the top. The whole inversion of the curve is cause for alarm. The chart is great but it seems like everyone's eye is catching on that crazy portion on the far right. Not only do we have to bring that down, we need to grab the line at 5% and start yanking it up. That's probably going to require policies and taxes that not just the 1% but the 20%…

The 20% can be completely left alone while you bring the bottom line up. but the <1% always manage to convince up to the 80% that they will be affected too. this results in what I call the right wing poor people. People that can only benefit from more taxes to the rich and land redistribution, but because they see their palpable earnings as being part of some intangible upper middle class (e.g. poor people that own one home, or programmers making $170k a year in sf) they are against any of that. it's the most effective propaganda war.

Re: US Income Inequality: All for the Top 1%

#63

Post by dvdhnt »

dsacco wrote: post #39
dvdhnt wrote: post #9

Earlier quoted context omitted.

Personally, I think it is blatantly unfair. It's like if we had a big bad of skittles and every time I took 1 skittle, you took 10 skittles.

But the economy is not zero sum, like that bag. If I have a process that increases the total number of skittles in the bag, is it still unfair for me to take more skittles from it?

So, you're right - the economy is not zero sum, but the resources are. The economy is about moving them here or there.

It depends on where you got those skittles? If you are increasing the skittle count by just taking from other peoples' bags of skittles then you're literally the mortgage/banking industry and there are probably lots of empty skittle bags out there propping up our never-ending-skittle-bag.

Re: US Income Inequality: All for the Top 1%

#64

Post by fnl »

kukx wrote: post #40

It is difficult for American workers to compete with Chinese or Indian people wages. The good thing is that the global inequality is declining.[0] My guess is that when the incomes in low-wage exporter countries get closer to the developed countries, then we may see a wage increase again. [0] - https://ourworldindata.org/global-economic-inequality

Sorry to have to disenchant you, but the underlying paper by Mauro (affiliation: IMF) that the linked article is citing actually only shows that the global Gini index is going up (less income inequality). And, in the same time-span (since the 80's), the Gini index in the US was also rising, slightly.

The problem is that the Gini index is built to be robust against outliers (those 1%). So no, both locally (US) and globally, inequality is on the rise - even if the Gini index is going up in both cases.

Re: US Income Inequality: All for the Top 1%

#65

Post by mxfh »

Taxation should compensate for the fact that the top 0.1% of people have the means to pay specialists to optimize their financial gains.

This advantage has nothing to do with individual skill or hard working ethics. Taxation schemes that don't take this into account are simply unfair.

Re: US Income Inequality: All for the Top 1%

#66

Post by PhiWhale »

There is a cool economic / social principal called "Preferential Attachment" that helps describe this a bit.

From Wikipedia: "A preferential attachment process is any of a class of Citation dynamics processes in which some quantity, typically some form of wealth or credit, is distributed among a number of individuals or objects according to how much they already have, so that those who are already wealthy receive more than those who are not."

It's an interesting principle that plays out in economics as well as other situations where skill is involved. It is similar in some ways to the "80/20 rule" if you are familiar.

I would definitely recommend researching the topic a bit. It will definitely add some dynamics to your view of income inequality.

Re: US Income Inequality: All for the Top 1%

#67

Post by jly »

logicchains wrote: post #23
dvdhnt wrote: post #9

Earlier quoted context omitted.

Personally, I think it is blatantly unfair. It's like if we had a big bad of skittles and every time I took 1 skittle, you took 10 skittles.

More like, if we had a big patch of strawberries and every day I picked 100 and you picked 1000, why should I get to take yours?

You shouldn't, but this example is not the way the existing capitalist economies of the world work.

In your example, a shared resource has labor applied to meet a clear human need, and those that physically do more of it reap more rewards. In the real world, someone owns the field, does no work, pays individuals (potentially) far less than the value of their labor to do the picking, and reaps most of the rewards. Then that field gets passed down to their offspring who continue to gain the rewards without doing any work.

Why should they get to do that?

Re: US Income Inequality: All for the Top 1%

#68

Post by [deleted] »

arcanus wrote: post #2

Real title was, 'Our Broken Economy, in One Simple Chart'. Despite some of the recent coverage, this chart indicates that gains are not going to the top 20%: they are going to top 1%, and particularly To be clear, this is not many programmers: "In 1980, the top 1% of adult earners in the U.S. made $420,000 a year, on average (before taxes and measured in 2014 dollars) — 27 times as much as the average for the bottom…

[deleted]

Re: US Income Inequality: All for the Top 1%

#69

Post by mcguire »

refurb wrote: post #25
autokad wrote: post #14

It looks to me that QE3 was a huge part of that later uptick. its no surprise to me that if you juice the markets and inflate asset prices (mostly stock), that the richest benefit most. what was surprising to me is how bad actually making stuff did. I understand that juicing the markets might not benefit that, but it seemed as though QE3 actually hurt producing tangible things.

Exactly. The distributions looks reasonable until ~2008, when things go wonky. That coincides quite nicely with the bottom of the equities market and the subsequent bull run. Also, something seems off. The animated chart is not data for a given year, it's for the last 34 year ending in that year. Since you're averaging growth over 34 years, the only way the top percentile can go from 3% growth (over 34 years) to 5% i…

Income inequality has been a visible problem for more than 10 years.

Income Progress across the American Income Distribution, 2000-2005 (https://www.brookings.edu/testimonies/income-progress-across...)

"Finally, incomes are growing less equal. Over the past quarter century Americans at the top of the income distribution have seen much faster income growth than people in the middle class. If average income grows 1% a year and top earners enjoy gains of 2% a year, many people in the middle and bottom will see their incomes grow much more slowly than 1% a year. Top income earners experienced sharp income declines in the last recession, but in the last couple of years their incomes have rebounded strongly. This reinforces the impression that the gains from prosperity have flowed disproportionately to people at the top rather than in the middle of the distribution."

Income Gap Is Widening, Data Shows (https://mobile.nytimes.com/2007/03/29/business/29tax.html)

"Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.'

Re: US Income Inequality: All for the Top 1%

#70

Post by js8 »

logicchains wrote: post #42
js8 wrote: post #28

Earlier quoted context omitted.

Because you're cheating - I saw some Mexicans picking them for you.

Why are the Mexicans picking them for me, not for you or for themselves? Assuming I didn't enslave them, I must be offering them something that makes it worth their while. Maybe I spent some time building better tools for berry picking, so using those tools they can take home more berries overall than they could without my help even if they're giving some to me. Maybe I saved some berries, traded them for supplies wi…

Maybe.. I can completely change a reasonable answer to any moral problem just by adding another maybe.

But it doesn't really matter. The analogy is flawed, that's the point, because it's not how it works in the real world. In the real world, people are not getting 1000000x higher income just because they do 1000000x more of the same work.

The main problem is in how we value things that are collectively produced (via cooperation of different people, especially in different points in time). There are basically two main solutions to the problem, both of them wrong. One is the neoclassical solution, which is to deny that we cooperate. Then there is Marx's solution, which is labor theory of value.

I don't believe it has a good solution.

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