What is the Impact of Income Inequality on Social Problems?

[Gokul43201]

No, it's not. It's what Democrats claimed Reagonomics to be. Big difference.

How is it not Reaganomics, when it was supposedly championed by Reagan's budget director, David Stockman (as demonstrated by his own admission)?

From the wiki:

A major feature of these policies was the reduction of tax rates on capital gains, corporate income, and higher individual incomes, along with the reduction or elimination of various excise taxes. David Stockman, who as Reagan's budget director championed these cuts but then became skeptical of them, told journalist William Greider that the term "supply-side economics" was used to promote a trickle-down idea.[7]

It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory. - David Stockman, Ronald Reagan's budget director​

http://en.wikipedia.org/wiki/Trickle-down_economics

 

[Al68]

the govt issues the money initially---they 'make' the money and determine how much they 'make'

LOL, I have to assume this is a joke. Obviously we use government notes as currency, but the act of printing them isn't "making" money in any real sense any more than the act of writing a check is "making money".

 

[Al68]

How is it not Reaganomics, when it was supposedly championed by Reagan's budget director, David Stockman (as demonstrated by his own admission)?

LOL. I'm well aware of the claims of Stockman and others, but you seem to now be using a different definition of "trickle down economics" than Democrats normally do.

I have never heard anyone claim to advocate "giving money to the rich so it will trickle down", which is typically what Democrats claim, as absurd as that is.

Supply side economics has nothing to do with "giving" anything to the rich or anything "trickling" anywhere. It's about reducing tax rates to reduce the negative economic consequences of high tax rates.

 

[Gokul43201]

Semantics aside, Democrats advocate actions by government that are commonly referred to as theft when the same exact actions are performed by anyone else. It's irrelevant whether or not you choose to use the word theft to describe it. It's the same action being advocated either way.

By that argument incarceration is kidnapping, the death penalty is murder, the military is a militia, and providing a taxpayer funded police or fire service is equivalent to running a mob operation or protection racket.

In any modern democracy, the government is given the power by its electorate to perform actions that may not be performed legally by non-state individuals.

 

[Gokul43201]

LOL. I'm well aware of the claims of Stockman and others, but you seem to now be using a different definition of "trickle down economics" than Democrats normally do.

I have never heard anyone claim to advocate "giving money to the rich so it will trickle down", which is typically what Democrats claim, as absurd as that is.

Supply side economics has nothing to do with "giving" anything to the rich or anything "trickling" anywhere. It's about reducing tax rates to reduce the negative economic consequences of high tax rates.

I'm not using any definition other than that provided in the wiki page, and attributed to Stockman. The tax cuts championed by Stockman were targeted at "higher income individuals", according to the link. I'm pretty sure that's a key aspect of what Democrats (or most anyone else) refer to as "trickle-down economics".

 

[rewebster]

LOL. I'm well aware of the claims of Stockman and others, but you seem to now be using a different definition of "trickle down economics" than Democrats normally do.

I have never heard anyone claim to advocate "giving money to the rich so it will trickle down", which is typically what Democrats claim, as absurd as that is.

Supply side economics has nothing to do with "giving" anything to the rich or anything "trickling" anywhere. It's about reducing tax rates to reduce the negative economic consequences of high tax rates.

LOL--it almost sounds like you've never heard of 'trickle-down' economics. Here's a link for you to read about it:

http://en.wikipedia.org/wiki/Trickle-down_economics


"Today "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side economics. Originally, there was a great deal of support for tax reform; there was a dual problem that loopholes and tax shelters create a bureaucracy (private sector and public sector) and that relevant taxes are thus evaded."

 

[Al68]

By that argument incarceration is kidnapping, the death penalty is murder, the military is a militia, and providing a taxpayer funded police or fire service is equivalent to running a mob operation or protection racket.

In any modern democracy, the government is given the power by its electorate to perform actions that may not be performed legally by non-state individuals.

Yes, including theft. I wasn't using the word theft in the legal sense, only in the moral sense. For your other examples, if you believe imprisoning someone for a crime is inherently wrong, then hiring government to do it would be just as wrong. The justification for it isn't some special right of government, government is just exercising the power delegated to it by people who inherently have the right to convict and imprison criminals to protect themselves. Ditto for the death penalty.

We use government for those things because it's the most practical way to do it, not because government has some kind of special rights above those delegated to it by the people.

I'm not using any definition other than that provided in the wiki page, and attributed to Stockman. The tax cuts championed by Stockman were targeted at "higher income individuals", according to the link. I'm pretty sure that's a key aspect of what Democrats (or most anyone else) refer to as "trickle-down economics".

Yes, but it's how Democrats describe "trickle down economics" that is fraudulent and nothing like Reagonomics. The name "trickle down" itself was coined for the purpose of such fraud.

And yes, I'm sure the wiki page doesn't say that.

 

[Al68]

LOL--it almost sounds like you've never heard of 'trickle-down' economics.

LOL. I've heard about it enough to puke thousands of times every year since Reagan was elected. What I've never heard is any politician ever say: "I believe in 'trickle down economics', we should just give money to rich people so it will trickle down".

But I have repeatedly heard Democrats say: "They believe in 'trickle down economics', they think we should just give money to rich people so it will trickle down".

It's known as a strawman argument. It's easy to argue against something so obviously absurd. And it's just as easy to stir up hatred against those of us opposed to their policies when they claim we believe in such nonsense.

Democrats know they cannot make a reasonable case for their agenda without misrepresenting and stirring up hatred for their opposition.

"Today "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side economics..."

Yes, it is, as a pejorative for purposes of stirring up hatred and fraud. But I now have no doubt that you knew that already.

 

[Zantra]

Zantra:

1. Education is only a pathway to richness if only a LIMITED number has the same education and expertise as yourself.

If everyone became qualified engineers, engineer salaries would plummet.


2. For those who do not have the ABILITY to become highly proficient in academic lines of work, higher education IS a
waste of time, and their choice of not pursuing such a career is a RATIONAL choice, not a bad one.

3. Nor is it at all unfair that they'll end up earning less, BTW.

4. And many lazy people are perfectly aware of that they are lazy, and do not blame others for their own lack of material resources. Many lazy people simply don't care about acquiring material riches, and find meaning elsewhere. And nobody should denigrate them for making THOSE choices, either.

Middle class is a broad definition, but I think it's generally agreed to approximate $30-100k/yr, YMMV. Now, I agree that not everyone can make $50-$75K/year and be an engineer or have a PhD, BUT I think it's well within reach for most people who fall within the statistical signficant median bell curve of intelligence(100+ IQ?) to finish an associates degree. With that, you can certainly land a job that would bring them out out of poverty. I think we can all agree on that point, right ?

And I think most middle aged adults are capable of completing the degree by the time they're 30, assuming they make the right choices. If more adults made those choices, the jobs will simply go to teenagers, the unemployed, retirees, etc, and young adults, who btw, have a higher unemployment rate than any other group in the US, at the moment.

Again, everyone can't be a chief, but anyone can step up and be a member of the tribe, if they so choose.

My irritation is with those who make these poor decisions then turn around and make excuses, when they've made their own bed. Those who choose that lifestyle and accept it's limitations are no doubt happy. Those who aren't happy are suffering from their own choices, IMHO. And unfortunately welfare isn't structured to motivate people to improve themselves. Hopefully that can change.

And incidentally, Although there's a correlation between EDUCATION and intelligence, Higher intelligence doesn't guarantee success by any stretch. In fact, there are a lot of studies to indicate just the opposite, that gift or highly intelligent folks have a difficult time socially, and can't find a job they keep, because they're bored so easily.There are people out there who are more intelligent than 99 percent of people on this board, and they can't hold down a job. Ther was a friend of my family who had an IQ of 180. He was a very fun guy, but in the 20 years I recall knowing him, he never held a steady job.

 

[TheStatutoryApe]

Middle class is a broad definition, but I think it's generally agreed to approximate $30-100k/yr, YMMV. Now, I agree that not everyone can make $50-$75K/year and be an engineer or have a PhD, BUT I think it's well within reach for most people who fall within the statistical signficant median bell curve of intelligence(100+ IQ?) to finish an associates degree. With that, you can certainly land a job that would bring them out out of poverty. I think we can all agree on that point, right ?

And I think most middle aged adults are capable of completing the degree by the time they're 30, assuming they make the right choices. If more adults made those choices, the jobs will simply go to teenagers, the unemployed, retirees, etc, and young adults, who btw, have a higher unemployment rate than any other group in the US, at the moment.

How many people would you like to see with college degrees working at McDonalds or stocking shelves at a grocery store (for instance)? There is a much higher demand for labour with a minimum of a high school diploma than there is for labour with a college degree. If you make sure that most people have a college degree you will wind up finding that a college degree is no longer worth much and you will have a glut of workers who paid significant sums of their own money, family money, or government aid money to get a degree that is doing nothing for them.

I worked at a private college. There is nothing sadder than seeing someone who spent $40k+ a year showing up day after day for years to use the alumni resource center in hopes of finding a job other than working at a department store. It was a specialized school run by a corporation just trying to make money without much consideration for their students unfortunately. I'd hate to see that be the norm for any college though.

 

[Zantra]

How many people would you like to see with college degrees working at McDonalds or stocking shelves at a grocery store (for instance)? There is a much higher demand for labour with a minimum of a high school diploma than there is for labour with a college degree. If you make sure that most people have a college degree you will wind up finding that a college degree is no longer worth much and you will have a glut of workers who paid significant sums of their own money, family money, or government aid money to get a degree that is doing nothing for them.

I worked at a private college. There is nothing sadder than seeing someone who spent $40k+ a year showing up day after day for years to use the alumni resource center in hopes of finding a job other than working at a department store. It was a specialized school run by a corporation just trying to make money without much consideration for their students unfortunately. I'd hate to see that be the norm for any college though.

Well I'll skip the well known graph correlating earnings potential with education, so let's say I did anyways.

That scenario goes back to smart choices- If you're paying $40K for an undergrad degree from a non-ivy league college, in a low paying field, then you will be paying student loans off for the rest of your life. BUT you're statistically more likely to afford a home, a newer car, and to have several children you can send to private schools, than if you have a high school diploma or less.

Or are you suggesting that it's better to skip college and work at Mcdonalds because college is too expensive? I'm pretty sure when you weigh out the cost of an education versus the cost of not getting an education, your net net is still tipping in favor of an education.

If every adult over 25 had a college degree, it would tilt the scales. I am however saying that on an individual basis you can CHOOSE to get a college degree. A college education is a choice, not an obligation, but it should be an obligation. I think that this would lead to a more balanced income distribution, and that young folks without a degree, elderly folks, and immigrants, unemployed folks and various others would fill the gaps. Besides, as we're becoming a more knowledge based society, I think that's going to happen eventually anyhow. Lower level jobs will become increasingly automated, which will push the lowest income group to become more educated to work in a less labor intensive role.

But yes, complete equality is impossible. If everyone had 1 bottle cap, someone would always want 2.

 

[TheStatutoryApe]

But yes, complete equality is impossible.

This is the point. The argument works if we are talking about individuals. When referencing the issue as a whole it fails. Saying that the poor simply have not the will and discipline to succeed is a pointless argument.

 

[WhoWee]

In addition to the Earned Income Credit (Social Security tax rebate/redistribution of income program), we also have other initiatives under HUD aimed directly at equality.

"HUD's Initiative for Empowerment Zones and Renewal Communities (EZ/RC)

The Empowerment Zone tax incentives and the Renewal Community tax incentives are worth approximately $11 billion to eligible businesses of all sizes in Empowerment Zones and Renewal Communities. These incentives encourage businesses to open, expand, and to hire local residents. The incentives include employment credits, a 0% tax on capital gains, increased tax deductions on equipment, accelerated real property depreciation, and other incentives.

In the Empowerment Zones and Renewal Communities, the most widely used Community Renewal tax incentive is the employment credit, which provides tax benefits to businesses that employ residents from the designated areas. Recent years have shown a steady upward trend in utilization of this incentive. HUD estimates that approximately 480,000 jobs for EZ and RC residents generated over $2 billion worth of employment credits for eligible employers throughout the country in 2007-2008.

Tens of thousands of business owners and tax preparers visit HUD’s Address Locator each month to verify that businesses and the residences of employees are located in these areas.

HUD re-energized the Community Renewal initiative in December 2001 by designating 8 new urban Empowerment Zones and 40 urban and rural Renewal Communities. Together with 22 Empowerment Zones that HUD designated in competitions in 1994 and 1999, these communities share an $11 billion tax-incentive package that encourages entrepreneurs to open new businesses, expand existing ones, and hire local residents.

The leaders of each Empowerment Zone and Renewal Community work closely also with government, business, and local community representatives to implement strategic plans to improve social and economic conditions throughout the designated areas.

In this website you will find historical information on the Community Renewal Initiative, success stories from businesses in Empowerment Zones and Renewal Communities, and information on laws and regulations that apply to these programs. There are detailed maps of these communities and links to tax incentive publications, including IRS Publication 954 on Empowerment Zone and Renewal Community tax incentives."

Last year, about $9 billion in targeted tax credits went unused. The preferred groups under these programs include anyone living in a household that receives Government benefits, minorities, disabled, Veterans, women, teenagers, and ex-convicts.

When you also consider Government initiatives in the area of college loans and grant programs, we all agree that options are available.

IMO - Additional incentives for people to better themselves and an expansion of social benefit programs will not solve the underlying problem. We need jobs with the potential to pay in excess of minimum wage.

We need a revitalization of our manufacturing base (and I don't mean a Government subsidized sector (or another GM/Chrysler/UAW scenario) or defense spending). We don't need more Government jobs or tax-dependent programs.

 

[Gokul43201]

Yes, including theft. I wasn't using the word theft in the legal sense, only in the moral sense. For your other examples, if you believe imprisoning someone for a crime is inherently wrong, then hiring government to do it would be just as wrong.

Okay, I understand better now. How about some of the other "other examples"? Taxes provide for a police force, fire departments and a military. If I recuse myself from those services, should I be exempt from paying taxes to support them? Isn't it inherently wrong to extort money from me for a service I do not ask for?

 

[russ_watters]

How many people would you like to see with college degrees working at McDonalds or stocking shelves at a grocery store (for instance)? There is a much higher demand for labour with a minimum of a high school diploma than there is for labour with a college degree.

I'd prefer to deal with the immediate problem first (and I agree that there is no need to get everyone in the US a college degree): getting more people to get the high school diploma. 30% is just way too many people. I consider someone without a high school diploma to be all but unemployable because it is a demonstration of irresponsibility.

 

[edpell]

I'd prefer to deal with the immediate problem first (and I agree that there is no need to get everyone in the US a college degree): getting more people to get the high school diploma. 30% is just way too many people. I consider someone without a high school diploma to be all but unemployable because it is a demonstration of irresponsibility.

My son has a bachelors degree from a good quality college. He is working in China because he could not find a job in the US. Let's work on jobs in the US for college degree holder before we go create a higher percentage of college degree holders.

 

[TheStatutoryApe]

I'd prefer to deal with the immediate problem first (and I agree that there is no need to get everyone in the US a college degree): getting more people to get the high school diploma. 30% is just way too many people. I consider someone without a high school diploma to be all but unemployable because it is a demonstration of irresponsibility.

This I agree with. I am not at all against making sure people have an education. Only pressuring people into an investment in education out of proportion with their likely earning potential. More attention toward trade schools would probably be a good idea too with an attendant crack down on schools that are not giving their students their moneys worth in education. Perhaps even ban any school that is not accredited from presenting themselves as a serious educational institute.

 

[Zantra]

This is the point. The argument works if we are talking about individuals. When referencing the issue as a whole it fails. Saying that the poor simply have not the will and discipline to succeed is a pointless argument.

If someone lacks the skillset to generate a higher income, they could still benefit from attending a relatively inexpensive community college, which would increase their earnings potential without the financial burden. I'm not saying everyone should have a university education, but community college is still college, and it still beats no college.

 

[TheStatutoryApe]

If someone lacks the skillset to generate a higher income, they could still benefit from attending a relatively inexpensive community college, which would increase their earnings potential without the financial burden. I'm not saying everyone should have a university education, but community college is still college, and it still beats no college.

A higher percentage of high school graduates (as Russ suggests) and a high standard of education in high schools with perhaps some minimal career training for those interested would be a better focus. Then focus on trade schools, as I mentioned in my last post, would seem the next best step.

I think though that we need to make sure that anyone with a minimum of a high school education should be able to sustain an acceptable standard of living for at least themselves if not a family.

Some nutty activist guy at the bus stop on my way to work today was yammering about "happy prison universities" and maybe he is not entirely off his rocker. Perhaps mandatory classes for completion of high school for long term inmates without their diplomas would an interesting idea. At least perhaps rewarding them for participating in a voluntary program. Here that is unlikely to work as the prisons are so over crowded the inmates are more or less assured of an early release so long as they are not shanking people or inciting riots.

There is an awful lot to think about and discuss regarding this whole issue. Education for everyone is certainly of paramount importance. I would only temper the pressure and widen the options to include more than standard college.

 

[Proton Soup]

This I agree with. I am not at all against making sure people have an education. Only pressuring people into an investment in education out of proportion with their likely earning potential. More attention toward trade schools would probably be a good idea too with an attendant crack down on schools that are not giving their students their moneys worth in education. Perhaps even ban any school that is not accredited from presenting themselves as a serious educational institute.

agreed. I'm noticing a fairly ugly trend of universities handing out 4-year degrees for [STRIKE]professions[/STRIKE] trades that maybe ought to be a 2-year investment.

 

[mheslep]

I'm not convinced that infant mortality is strongly connected to income inequality (rather than, say, income). The EU's infant mortality rate, 5.72 per thousand live births, is not too different from the US 6.26 (2009 estimates in both cases). It would be interesting to compare plots of both, but controlling extraneous variables would be hard. (I imagine there would be some value in the raw data, but wouldn't like to draw unwarranted conclusions.)

Agreed. For more perspective, note the http://eh.net/encyclopedia/article/haines.demography" . In 1960 the US rate was ~23 per thousand, and in 1980 the US rate was ~11 per thousand. Now we have the OP reference which attempts to base an argument on a difference of ~0.7 per thousand. Well that requires as closer look at the details. It is not clear that the US and other OECD countries measure the rates in precisely the same way. US medicine puts significant resources into the survival of premature births, and consistently pushes down the incubation time for survival of premature births (25 weeks and some days now). It appears the EU and other OECD countries are quicker to write off the failure to survive of a premature birth as a failure to survive in utero, i.e. a late miscarriage, so that no infant death is counted at all. Before making a big show about a US infant mortality ranking of 20-30th because of a difference of ~0.5 per thousand, those more exotic reasons (26 week birth counting) should be taken into account.

 

[Vanadium 50]

Agreed. For more perspective, note the http://eh.net/encyclopedia/article/haines.demography" .

This also moves counter to the argument - if income inequality is rising and infant mortality is falling, doesn't that mean that we should have even more income inequality?

 

[Zantra]

I'd prefer to deal with the immediate problem first (and I agree that there is no need to get everyone in the US a college degree): getting more people to get the high school diploma. 30% is just way too many people. I consider someone without a high school diploma to be all but unemployable because it is a demonstration of irresponsibility.

50 years ago there was no NEED everyone to get a high school education, let alone college:http://www.historycooperative.org/journals/jah/92.1/images/katz_fig07b.gif"

We can reasonably assume that as mankind's knowledge level continues to rise, so will the mimimum requirements for entry into the workforce, so we we can assume that if this trend continues, eventually someone will need a college degree to acquire the equivalent of a job at McDonalds at some future point (100 years?). Yes that will dillute the value of a college diploma to the same level a HS diploma is at today, but most everyone will have a "college education". And that will pay minimum wage.

My original point still stands-if you're unwilling (not unable) to do the required work to achieve a middle class lifestyle, you cannot blame others for your choices- yet a great many do.

 

[CRGreathouse]

My original point still stands-if you're unwilling (not unable) to do the required work to achieve a middle class lifestyle, you cannot blame others for your choices- yet a great many do.

I'm curious: how do you feel about those who are unable?

 

[BoomBoom]

My original point still stands-if you're unwilling (not unable) to do the required work to achieve a middle class lifestyle, you cannot blame others for your choices- yet a great many do.

I don't think that when most people refer to income inequality, they are referring to the separation of the poor and the middle-class, but rather they are referring to the huge separation between the middle-class/poor and the filthy rich.

 

[CRGreathouse]

I don't think that when most people refer to income inequality, they are referring to the separation of the poor and the middle-class, but rather they are referring to the huge separation between the middle-class/poor and the filthy rich.

Really? I have pretty much the opposite view, that it usually refers to the poor. The middle class don't need help, it doesn't bother me that they're far less wealthy than the rich. (I'm middle/lower-middle class myself.)

 

[DivingMullah]

LOL--it almost sounds like you've never heard of 'trickle-down' economics. Here's a link for you to read about it:

http://en.wikipedia.org/wiki/Trickle-down_economics


"Today "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side economics. Originally, there was a great deal of support for tax reform; there was a dual problem that loopholes and tax shelters create a bureaucracy (private sector and public sector) and that relevant taxes are thus evaded."

The supply side economic i.e Reaganomics was the biggest Con on the American People.

this graph show the income distribution from 1947 to 2007.

At first glance it looks like there was an increase, but that is the house hold income. in 1947 until early 1980s in many house holds there was single wage earner now there are at least two and if you take the 60% percentile number in 1970 the house income was $53843 in 2007 it was 75000. 28% increase. But if you look at price of goods says Beef (Ground beef, 100% beef, per lb. (453.6 gm))

From Bureau of labor statistics the p
http://data.bls.gov/PDQ/graphics/APU0000703112_63226_1267573898400.gif

Price of Beef in 1984 was $1.2 now is $2.3 that is 43% increase

Even if you compare it to price of gold in 1970 was 37 something in 2008 was over 800 in 2010 is above 1000.

http://en.wikipedia.org/wiki/File:Gold_Price_%281968-2008%29.gif

I like the gold comparison because it is the true price of goods. in 1970 with certain amount of gold you could buy a house. Right now with same amount of gold you can buy the exact house. So the price of Gold nor the price of house has changed. Was has changed is the value you assigned to that paper thingy we call American Dollar.

There was another thing that happened around that time that is also interesting...

Reduction of Corporate tax in US

* Although taxes paid by corporations, measured as a share of the economy, rose modestly during the boom years of the 1990s, they remained sharply lower even in the boom years than in previous decades. According to OMB historical data, corporate taxes averaged 2 percent of GDP in the 1990s. That represented only about two-fifths of their share of GDP in the 1950s, half of their share in the 1960s, and three-quarters of their share in the 1970s.
* The share that corporate tax revenues comprise of total federal tax revenues also has collapsed, falling from an average of 28 percent of federal revenues in the 1950s and 21 percent in the 1960s to an average of about 10 percent since the 1980s.
* The effective corporate tax rate — that is, the percentage of corporate profits that is paid in federal corporate income taxes — has followed a similar pattern. During the 1990s, corporations as a group paid an average of 25.3 percent of their profits in federal corporate income taxes, according to new Congressional Research Service estimates. By contrast, they paid more than 49 percent in the 1950s, 38 percent in the 1960s, and 33 percent in the 1970s.
* Corporate income tax revenues are lower in the United States than in most European countries. According to data from the Organization for Economic Cooperation and Development, total federal and state corporate income tax revenues in the United States in 2000, measured as a share of the economy, were about one-quarter less than the average for other OECD member countries. Thirty-five years ago, the opposite was true — corporations in the United States bore a heavier burden than their European counterparts.

http://www.cbpp.org/cms/index.cfm?fa=view&id=1311

American Specter summarizes it the best

http://www.prospect.org/cs/articles?article=the_rich_the_right_and_the_facts#figureone

: Distribution of Income Gains, 1947-89

Percentile/years % Annual Increase (to nearest tenth)
20
1947-73 2.6%
1973-79 0.4
1979-89 -0.3

40
1947-73 2.7
1973-79 0.4
1979-89 0.3

60
1947-73 2.8
1973-79 0.7
1979-89 0.6

80
1947-73 2.7
1973-79 0.6
1979-89 1.1

95
1947-73 2.5
1973-79 1.1
1979-89 1.6

Figure 2: Increases in Income, 1977-89

Percentile % increase, 1977-89
0-20 -9%
20-40 -2
60-80 8
80-90 13
90-95 18
95-99 24
100 103

The Reganomics practices has actually been choking the middle class for the past 20 plus some years, while the Rich has been getting very much richer the middle class who has been caring the entire burden has been shrinking and shrinking...
Basically that is the true essence of income inequality in US and the conservatives master plan.

Diving Mullah

Diving Mullah

 

[mheslep]

The supply side economic i.e Reaganomics was the biggest Con on the American People...

DM: First, do you see that you're plot is in real terms, ie all years a re corrected for inflation to 2007 dollars? Thus if you want to compare thirty year old commodity prices they should be similarly be corrected. Second, if you search for per capita income statistics instead of household you'll find per capita incomes have increased more than household. Third keep in mind that those are charts of income statistics brackets over time, not real people over time. Someone in that bottom 20% bracket in 1947 might well be in the top one today (Warren Buffet is an example)

 

[DivingMullah]

DM: First, do you see that you're plot is in real terms, ie all years a re corrected for inflation to 2007 dollars? Thus if you want to compare thirty year old commodity prices they should be similarly be corrected. Second, if you search for per capita income statistics instead of household you'll find per capita incomes have increased more than household. Third keep in mind that those are charts of income statistics brackets over time, not real people over time. Someone in that bottom 20% bracket in 1947 might well be in the top one today (Warren Buffet is an example)

Someone in that bottom 20% bracket in 1947 might well be in the top one today (Warren Buffet is an example)

Yes but those are exception to the rule and statistically insignificant.

Secondly wages are normalized to inflation, which is why I included the price of beef and gold which are self corrected for inflation. Commodities always are...which actually indicates the salary increase has not kept up with the price of goods, and even with multiple income you are getting paid less, because your buying power has diminished.

if you search for per capita income statistics instead of household you'll find per capita incomes have increased more than household

I've already included the distribution of income gain per capita and sectioned by percentile, which only reaffirms my point.

Diving Mullah

 

[CRGreathouse]

Yes but those are exception to the rule and statistically insignificant.

I don't think they're insignificant at all. For example: There's a strong tendency for an individual's earnings to increase (if not year-to-year, at least decade-to-decade) in real terms. This isn't an improvement in the economy or the like, just that the person's skills ("human capital") are increasing.

Secondly wages are normalized to inflation, which is why I included the price of beef and gold which are self corrected for inflation.

No. You're comparing *real* incomes to *nominal* prices for beef and gold. Compare nominal to nominal, or real to real.

 

[CRGreathouse]

Second, if you search for per capita income statistics instead of household you'll find per capita incomes have increased more than household. Third keep in mind that those are charts of income statistics brackets over time, not real people over time.

Also worth noting is that the household size varies not only by year but by income. First-quintile households typically include 2+ earners; fifth-quintile households typically include 0-1.

 

[Zantra]

I don't think that when most people refer to income inequality, they are referring to the separation of the poor and the middle-class, but rather they are referring to the huge separation between the middle-class/poor and the filthy rich.

Of course I'm empathetic towards people who are unable to achieve an education due to circumstances beyond their control. But it's amazing what lengths some people will go to in order to justify in their own mind, why they didn't get an education when they have every opportunity.

I know I've gotten off point here, so back to income inequality

Dual incomes skew the results. Per capita is more accurate than per household.

 

[CRGreathouse]

Also there's an issue here of equality of outcome vs. opportunity. Even if you look at individual income (household income being even more skewed, naturally), the top quintile works many more hours than the bottom. So in one sense it's not as unfair as it would otherwise seem. But many/most of those in the lowest quintile are not working as many hours as they would like to work: they are unemployed or working part-time when they want to work full-time.

How do people here feel about that?

 

[russ_watters]

No. You're comparing *real* incomes to *nominal* prices for beef and gold. Compare nominal to nominal, or real to real.

In other words, the change in the price of beef is already accounted for in the graph (that's what inflation is!) so by pointing it out again, you're double-counting the inflation.

 

[mheslep]

Yes but those are exception to the rule and statistically insignificant.[...]

From the Amer. Prospect 1992 article by Krugman you cited references studies showing that every ten years about half of the bottom quintile move out:

[...]For example, Census data show that 81.6 percent of those families who were in the bottom quintile of the income distribution in 1985 were still in that bottom quintile the next year; for the top quintile the fraction was 76.3 percent. Over longer time periods, there is more mixing, but still not that much. Studies by the Urban Institute and the U.S. Treasury have both found that about half of the families who start in either the top or the bottom quintile of the income distribution are still there after a decade, and that only 3 to 6 percent rise from bottom to top or fall from top to bottom.

http://www.prospect.org/cs/articles?article=the_rich_the_right_and_the_facts#figureone