ParticleGrl said:
But that's just diminishing marginal utility of money- it was just as true in the 50s as it is today. Also- isn't that an argument for taxation and redistribution?
Just because a high-earning person doesn't need all of their income doesn't mean that the government has any right to tax it away to spend it on any number of various social programs that politicians conjure up (which may not even work or may make things worse, or could be just giveaways to certain special interests and meant to win votes).
The contention is that the wealth gap in terms of lifestyle is less severe today than it was in the 50s but that seems to conflict both with the data (increasing income inequality is a stylized fact), and with my own anecdotal experience.
I would argue that income inequality is meaningless with regards to the wealth gap in terms of lifestyle. If we go 100 years into the future and we find that even the poor have access to all of the healthcare that today is only available to the wealthy, then regardless of whether income inequality exists, in terms of living standards, the gap is going to be more narrow. Income inequality is just a statistic. It refers to the various income quintiles (it isn't representative of the actual people in those quintiles).
I agree that in SOME ways we are better off today than richer people in the 50s, but that doesn't tell us anything about the wealth gap in each era. Also, in some ways today we are worse off. If I had the chance to be a man with a physics phd in the 50s, I would take it in a heartbeat.
Generally, the farther back you go in history, you find a larger and larger difference in the standard of living between rich and poor. For example, go back to the 1900s and look at the differences in living standards. They were enormous. A rich person could live a very nice home (very nice even by modern standards), have fresh fruit and vegetables, meat, coffee, chocolate, cakes, pastries, leisure time, ability to take a bath if they so desired, music whenever they wanted it (they'd have servants or people hired to play it for them), and so forth. They were still "poor" in that there was no running water back then or electric light, but they got by with gas globe lighting and servants could pump water. Whereas the average person lived without running water, no electric light, bathing was unheard of, fresh fruit, meats, chocolates, coffee, music whenever they wanted it, etc...were all luxuries. Today, pretty much all of these things are available to the masses, and in new variations that were not available to the rich then. So in this sense, the wealth gap has narrowed greatly, as we are now all rich.
I wouldn't argue we are worse off in certain ways so much as certain professions are just worse off now then back then. Right now, we are in the midst of a bad economy (which happens every now and then) due to a major financial crisis that hit the economy.
But inequality isn't just about new technology- look at things like retirement. It seems like most people in my grandparent's generation were able to retire at some point, and live if not well, than comfortably. Lots of people in my parents generation have had to put that on hold. I'm sure there are lots of people who, given the choice, would take retirement and no ipad to working another 5-10 years and having an ipad.
Remember though that historically, most people couldn't retire because there was no Social Security or Medicare. And when Social Security was created, the lifespan of people wasn't much longer than the age you had to be to start receiving Social Security. The idea was that most people would die before they needed it, or die soon after. People of your parent's generation are living longer. Also, if the government hadn't started robbing Social Security, it would probably be a lot more financially sound. A lot of people unfortunately lost their retirement in this financial crisis as well.
For people to be able to retire, unless they are wealthy, they either need to work long enough at a company to receive a pension, which isn't as viable today, and if the firm goes under, the pension can too, or they need to rely on investments in the markets (definitely not a secure way), or they need to rely on the government safety nets (which the government has messed up).
I'm sure you can find similar creation of jobs during the Clinton presidency. The slump in job creation seems to have started during Bush.
The 80s, 90s, and 2000s all benefited from a generally healthy economic climate and bubbles, the problem is that the 2000s bubble really dealt a hard blow to the economy when it popped.
