News What is the Impact of Income Inequality on Social Problems?

[russ_watters]

Depends on how you measure "poor"...the slice they get is as small as ever.

Of course - if you define the slice to be constant, the slice stays constant! Wouldn't it be more useful to define "poor" based on standard of living than to arbitrarily select a certain fraction of the population and perpetually label them "poor" even though they drive better cars, have more appliances and live in better homes than the "poor" of 40 years ago?

In any case, that's mostly irrelevant. We're not talking about poverty rate here. Even if we assume that 20% of the population is poor today and 20% of the population was poor 40 years ago, you can still measure their increase or decrease and when you do...you find out that as a group, they are getting richer.

So how do you think the rich get rich?

Mostly by getting good educations and good jobs.

Where do you think all their money originates from?

That's a pretty deep question. Ultimately, wealth is dug out of the ground and generated by man-hours of labor.

As a percentage of income, I'm quite sure the poor contribute much more to the rich than vice-versa.

You are quite wrong. Whether in absolute terms or in percentage of income, the poor contribute nothing to our tax revenue.

 

[rewebster]

Whether in absolute terms or in percentage of income, the poor contribute nothing to our tax revenue.

Nothing?!-----that's rather an elitist statement-----Nothing?-----I'm surprised you'd say/write something like that at all...really surprised

 

[mheslep]

... Whether in absolute terms or in percentage of income, the poor contribute nothing to our tax revenue.

nothing to our federal income tax revenue. Everybody pays at least a little state and local sales tax. Also, in the US the poor may own a beater car (!) or even a mobile home and thus pay a little property tax.

 

[DavidSnider]

The way some people here talk you'd think Bernie Madoff was a saint.

How can some people be so naive as to think that money can only be acquired by hard work.

 

[mheslep]

The way some people here talk you'd think Bernie Madoff was a saint.

How can some people be so naive as to think that money can only be acquired by hard work.

I'd guess nobody posting in this thread believes that money can only be acquired by hard work.

 

[CRGreathouse]

The way some people here talk you'd think Bernie Madoff was a saint.

Strawman much?

How can some people be so naive as to think that money can only be acquired by hard work.

Who said that? Or is that just another... forget it.

 

[CRGreathouse]

nothing to our federal income tax revenue. Everybody pays at least a little state and local sales tax. Also, in the US the poor may own a beater car (!) or even a mobile home and thus pay a little property tax.

True. Do you know of a good source that takes all taxes (not just income, but property and capital gains et. al.) into account, and also counts transfer payments like SS, Medicade, and EIC?

 

[rewebster]

Well first off - you're switching subjects: before it was about income inequality, but now it is about poverty. Regardless, yes, for the most part the poor are poor because they have chosen not to succeed. You are aware of the extremely strong corellation between income and education, right? The US government provides free education through high school, yet a full 30% of the population chooses not to take advantage of it: http://www.csmonitor.com/USA/2009/0609/p02s13-usgn.html

"the poor are poor because they have chosen not to succeed"

well, well----I just have to ask-------can you back up that statement with a source?

 

[Vanadium 50]

In the US the richest are paying an effective tax rate of less than 1%, which is wealth redistribution in reverse.

Skyhunter's numbers say 16.62%.

I think that one has to argue this on a consistent set of numbers.

My I point out that if the theory you propose is correct, it makes certain predictions. One is that as the US Gini coefficient rises, so does teen pregnancy. However, teen pregnancy has been falling (by almost a factor of 2) since its peak in 1992. That means either US income inequality has been shrinking since then, or that your theory is wrong.

 

[WhoWee]

Poor people are poor because they haven't yet taken advantage of the opportunities that are available to them. That would be their choice. Yes, people chose to be poor in the US. How can I say this? Because I used to be poor. I grew up poor. I grew up with poor people who were content to do just enough to get by. And some of them despised the rich because they assumed that the rich were doing the same thing but for some unfair reason just had more money.

I took advantage of opportunities available to me and became middle class. If I chose to, I could become rich. I just don't want to work that hard.

I have to agree - I think Russ said something very similar as well.

The poor people in the US have access to free food, subsidized rent and utilities, free education, free medical, transportation, cell phones, "earned income credits" and good old cash. If part of a minority group, they even receive preferential treatment for jobs.

Not to get too far off topic - I see people in line at the grocery store buying items with food stamps that I can't justify spending MY cash on.

 

[Zantra]

Couple of points here:

1. Poverty is a CHOICE in the vast majority of circumstances. I'm not talking about 1 heartbreaking story that's statistically irrelevant. I'm talking about what's been already clearly stated here: free money, free education, free opportunities are practically unparalleled. College education to anyone willing to put forth even a minimal effort (community college) and do so for free, deferring payment until you get a job, which is practically guaranteed with a college degree within a year (current economy notwithstanding)

2. Yes SOMEONE has to be the janitor, and someone HAS to work at Mcdonalds. But if you're 40 and have a job similar to this, one HAS to ask oneself, what could I have done differently?

The encomy can't support everyone being wealthy because then gas would cost $200/GALLON. But you can work to improve your life from where it is at, by simply educating yourself and doing the work. People who are poor are there often because they make bad decisions on a daily basis. I've had poor people tell me that education is a "waste of time". And that is why they are poor.

I have seen the poor choices that go with poverty with my own eyes, time and time again over the years. Poor financial, life, and personal choices lead to lack of options. No one is truly prevented from educating themselves. No one is truly told they can't improve themselves. The sad truth is that many people who are poor, ARE lazy. Or just unwilling to commit to the level of work necessary to be sucessful. Everyone can't be a millionaire but everyone could afford a middle class lifestyle if they simply chose to take the steps necessary to do that

Again, statistically. I'm not referring to Billy Bob Who was robbed lost his job, and his entire familiy died. I'm not talking about mentally challenged folks. I'm not talking about the woman who works 3 jobs to support 7 children because her husband died I'm talking statistically significant median.

There are correlations betweeen education and the average age of child bearing, correlations between poor folks and financial management. If you're poor, and you can't support yourself, why would you add 1 child to the equation, let alone many? If you're making minimum wage, why would you chose not to go to school, having been told over and over again that more school=more money? It's very simple: laziness. YES there are exceptions, but those are not the general rule.

Everyone can't be the chief, but anyone can be a warrior.

 

[arildno]

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.

 

[madness]

Poor people are poor because they haven't yet taken advantage of the opportunities that are available to them. That would be their choice. Yes, people chose to be poor in the US. How can I say this? Because I used to be poor. I grew up poor. I grew up with poor people who were content to do just enough to get by. And some of them despised the rich because they assumed that the rich were doing the same thing but for some unfair reason just had more money.

I took advantage of opportunities available to me and became middle class. If I chose to, I could become rich. I just don't want to work that hard.

It's really not fair to say poor people are poor out of choice. Do you think that also poor people are statistically much more likely to go to jail because they choose to go to jail? Or that poor people are much more likely to be addicted to drugs because poor people like drugs more than rich people? Or do poor people receive much poorer quality education than rich people because they don't like learning? These people are all born the same, but into different social backgrounds.

 

[madness]

Wealth redistribution, to me, means that wealth from one group is reduced and that this reduction is used (at least in part) to raise the wealth of another group. For a low tax rate on the wealthy to redistribute wealth to the wealthy, the poor would have to be poorer than if the wealthy were not there, yes? So if a person with an income of $100 million dollars pays $1 million (1%)* in taxes, the poor would presumably be better off if the government spent less than $1 million providing services (roads, etc.) for the rich person. I posit that this would be highly likely.

So it's wealth redistribution if rich people are taxed more than poor and the money put into public services (this is where the money goes in current socialist countries), but it's not wealth redistribution if the poor are taxed more than the rich?

 

[madness]

I know it's due to socialism. That wasn't my point. My point is that if you propped up the bottom without taking the money from the top (say, by using a flat tax with the bottom 20% of the population cut off), you'd still end up with high income inequality, but low poverty. My only point in saying this is to highlight that it isn't the difference between rich and poor in the US that causes the problems, it is the poverty itself. Which is related to: Yes, I read the link. It is very weak (particularly as applied to your point). The claim in the first sentence of your thesis is this: "I claimed that inequality is more important than poverty when it comes to crime and other social problems." The link you provided does not analyze poverty anywhere in it, so how can you say that it supports your point about poverty? Perhaps I'm just missing it: could you point me to the place in that link where discusses poverty's effect on those social barometers?

The part where it says "The wealth of nations has little bearing on the list of social evils examined. But in (almost) every case there is a link with inequality.". The point of the article is that all of the countries mentioned are less wealthy than the US, yet have less social problems - the problems are scaling with income inequality, not with poverty.

 

[madness]

My I point out that if the theory you propose is correct, it makes certain predictions. One is that as the US Gini coefficient rises, so does teen pregnancy. However, teen pregnancy has been falling (by almost a factor of 2) since its peak in 1992. That means either US income inequality has been shrinking since then, or that your theory is wrong.

You can't expect all these problems to go with an exact linear fit. There are multiple factors involved. In any case, the overall trend is very clear.

From Russ_Waters:

Well first off - you're switching subjects: before it was about income inequality, but now it is about poverty. Regardless, yes, for the most part the poor are poor because they have chosen not to succeed. You are aware of the extremely strong corellation between income and education, right? The US government provides free education through high school, yet a full 30% of the population chooses not to take advantage of it

Do you think poor people are a different species? They receive less education do to social issues related to poverty. People are born the same, but the social backrground they grow up in determines their statistical chances of success (and education etc.).

 

[drankin]

It's really not fair to say poor people are poor out of choice. Do you think that also poor people are statistically much more likely to go to jail because they choose to go to jail? Or that poor people are much more likely to be addicted to drugs because poor people like drugs more than rich people? Or do poor people receive much poorer quality education than rich people because they don't like learning? These people are all born the same, but into different social backgrounds.

My point is, being one who was born "poor", is that one does not have to remain in that condition if they choose not to. If you do not make an active choice to take advantage of the opportunities available then you remain in your default position.

Yes, you make the indirect choice to go to jail when you break the law.

Poor people are more likely to make bad decisions regarding drugs, breaking the law, and disregarding education because poor people tend to make bad decisions about everything. That's why they are poor. A wealthy person only needs to make bad decisions for a few months to quickly realize that they have become "poor".

Some of us come from a poor background and some of us do not. It's a decision to remain in your default condition. The only unfair factor may be the amount of work required to change your existing circumstance. Noone keeps you in a poor or wealthy condition in this country. The opportunities to climb into or out of bad economic living conditions are endless.

 

[arildno]

The opportunities to climb into or out of bad economic living conditions are endless.

1. No, they are not.

2. You need ABILITY, and not only dedication, in order to "climb" somewhere. In general, you need LESS ability to climb if you have a middle class background than if you come from a poor background.

3. HENCE, irrespective of the level of dedication, more people in the poor class will remain there than for other classes.

4. Not that there is anything "unfair" about that..

 

[drankin]

1. No, they are not.

2. You need ABILITY, and not only dedication, in order to "climb" somewhere. In general, you need LESS ability to climb if you have a middle class background than if you come from a poor background.

3. HENCE, irrespective of the level of dedication, more people in the poor class will remain there than for other classes.

4. Not that there is anything "unfair" about that..

1. I'll simply disagree being that my point was vague anyway.

2. How does one not have the ABILITY? Dedication is not a default attribute. Whether you have more or less ability does not mean you are not able. As I said, it may require more work but that's it.

3. Yes, because it requires more work to remove oneself from a hole than to avoid getting into the hole in the first place.

4. ...

 

[arildno]

2. How does one not have the ABILITY? Dedication is not a default attribute. Whether you have more or less ability does not mean you are not able. As I said, it may require more work but that's it.

Various abilities have strong genetic components you can't do much about, whatever your level of dedication.

Even if the distribution of such abilities is uniform across income classes, those that happened to be in the lowest classes will be more hampered by their lack of abilities than persons with similar lacks in a higher income class.

 

[drankin]

Various abilities have strong genetic components you can't do much about, whatever your level of dedication.

Even if the distribution of such abilities is uniform across income classes, those that happened to be in the lowest classes will be more hampered by their lack of abilities than persons with similar lacks in a higher income class.

Hampered, but not prevented. They will have to work harder to change their circumstance. See point "3".

 

[arildno]

Hampered, but not prevented. T

Incorrect.

There will be lots of abilities where your lack in it will PREVENT you from ever reaching that level of skill sufficient in order for others to be interested in hiring you to practice that skill for a salary.

General improvability does NOT mean you can stretch whatever talent you've got to be of employment interest for others.

That can be math, physical coordination, musical ability and whatnot else.

 

[madness]

My point is, being one who was born "poor", is that one does not have to remain in that condition if they choose not to. If you do not make an active choice to take advantage of the opportunities available then you remain in your default position.

Yes, you make the indirect choice to go to jail when you break the law.

Poor people are more likely to make bad decisions regarding drugs, breaking the law, and disregarding education because poor people tend to make bad decisions about everything. That's why they are poor. A wealthy person only needs to make bad decisions for a few months to quickly realize that they have become "poor".

Some of us come from a poor background and some of us do not. It's a decision to remain in your default condition. The only unfair factor may be the amount of work required to change your existing circumstance. Noone keeps you in a poor or wealthy condition in this country. The opportunities to climb into or out of bad economic living conditions are endless.

I agree that it is possible for a poor person to become rich, that's not my point. Poor people are statistically likely to stay poor and rich people are likely to stay rich. This is reason enough to argue that they don't have equal opportunities. If a baby is born into a rich or poor family, statistically they will remain poor or rich.

 

[drankin]

I agree that it is possible for a poor person to become rich, that's not my point. Poor people are statistically likely to stay poor and rich people are likely to stay rich. This is reason enough to argue that they don't have equal opportunities. If a baby is born into a rich or poor family, statistically they will remain poor or rich.

Yes, starting out poor puts you at a disadvantage. But it doesn't condemn you to a life of poverty.

There is no injustice here. There IS opportunity. Explain how there is not. When you say "equal" opportunity what do you mean?? The poor don't have the opportunity to go to school? The poor don't have the opportunity to excel in anything they apply themselves towards? The poor don't have the opportunity to start a business?

 

[madness]

Yes, starting out poor puts you at a disadvantage. But it doesn't condemn you to a life of poverty.

There is no injustice here. There IS opportunity. Explain how there is not. When you say "equal" opportunity what do you mean?? The poor don't have the opportunity to go to school? The poor don't have the opportunity to excel in anything they apply themselves towards? The poor don't have the opportunity to start a business?

If you take someone born into a poor background and someone born into a rich background, then with no other information about the person you could guess whether they will go to college, whether they will get a high paying job, whether they will get addicted to drugs or go to jail, and statistically you would guess right (assuming you have knowledge of the statistics). There may be theoretical "opportunities" available to everyone, but their statistical opportunities are more important, and they are not at all equal.

 

[Vanadium 50]

You can't expect all these problems to go with an exact linear fit. There are multiple factors involved. In any case, the overall trend is very clear.

It sounds to me more like you are dismissing inconvenient data.

 

[drankin]

If you take someone born into a poor background and someone born into a rich background, then with no other information about the person you could guess whether they will go to college, whether they will get a high paying job, whether they will get addicted to drugs or go to jail, and statistically you would guess right (assuming you have knowledge of the statistics). There may be theoretical "opportunities" available to everyone, but their statistical opportunities are more important, and they are not at all equal.

Ok, I'm trying to understand what your point is. Is the fact that there are those who are born rich while others are born poor a social problem in itself? Is having a society that allows one to be wealthy cause those who are born into poor households to have social problems?

You are providing some data but we are having to make assumptions as to what your point is.

 

[Evo]

Since it seems almost everyone in this thread is guilty...

PLEASE POST LINKS TO VALID SOURCES IF YOU MAKE ANY CLAIMS!

From the P&WA guidelines -

2) Citations of sources for any factual claims (primary sources should be used whenever possible).

3) Any counter-arguments to statements already made must clearly state the point on which there is disagreement, the reason(s) why a different view is held, and cite appropriate sources to counter the argument.

4) When stating an opinion on an issue, make sure it is clearly stated to be an opinion and not asserted as fact.

All of you should be aware of these rules. If not, read the rules now. From this point on, any statements of fact that are not accompanied by a reliable, recognized source to back your statement up will get an infraction.

 

[Skyhunter]

Russ,

Here is a chart from the CBO.

http://www.epi.org/Issuebriefs/239/figurea.gif

Poor getting poorer.

I know you have your own definition of the term, but it is not black and white. You want to attribute the overall growth of the nations wealth to the rich, which you then translate into the "rich pulling up the poor", all the while ignoring the contribution of labor. Labor is primary to capital. without labor there would be no capital.

The thread is about income inequality. I stand by my statement, since my definition of getting poorer is widening the gap, and increasing the portion of the population below the poverty threshold.

If you want to define it as real income growth...well here is another chart.

http://www.epi.org/Issuebriefs/239/figureb.gif

So in 35 years the income of the poorest has increased ever so slightly. If you want to call that the rich pulling up the poor...

http://www.epi.org/publications/entry/ib239"

 

[rewebster]

something to lighten the mood


https://www.youtube.com/watch?v=<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/rQ_4ss9v7Z4&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/rQ_4ss9v7Z4&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

Used to worry about the poor
But I don't worry anymore

Used to worry about the black man
Now I don't worry about the black man

Used to worry about the starving children of India
You know what I say about the starving children of India ?

I say, "Oh mama"

It's Money That I Love
It's Money That I Love
It's Money That I Love