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

[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

 

[mheslep]

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

Where? The plot from Wiki is by household and the text of the Amer Prospect article states the Figure 1 numbers you quoted are by family.

Figure 1

The income distribution is measured in percentiles. For example, the first set of bars shows the rate of growth of income of the family at the 20th percentile [...]

 

[CRGreathouse]

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:

Thanks for the reference; that roughly matches my intuition. Do you know of similar data for individual rather than household income? I imagine that takes longer to escape -- you can't change the income just by changing your family size.

 

[mheslep]

Thanks for the reference; that roughly matches my intuition. Do you know of similar data for individual rather than household income? I imagine that takes longer to escape -- you can't change the income just by changing your family size.

I can't quickly locate it in quentiles which is what you likely wanted, but here is per capita income aggregated:
http://www.census.gov/hhes/www/income/histinc/p01AR.xls
which shows per capita US income in 2008 dollars about doubling from 1967 ($13.8k) until 2008 ($27k), a 95% increase. By comparison, household income over the same period shows:

1967 to 2008, in 2008 dollars
Bottom fifth: $9k to $11k (22%)
Top fifth: $100.4k to $171k (70%)
Top 5%: $158.4k to $294k (86%)
http://www.census.gov/hhes/www/income/histinc/h03AR.xls

 

[mheslep]

The Census income figures cited in this thread largely do not include government transfer payments:

The definition of income used in the SIPP [Census income data collection] is basically the same as in the CPS. It reflects money income before taxes and does not include the value of noncash benefits such as employer-provided health insurance, food stamps, or medicaid.

http://www.census.gov/hhes/www/income/compare1.html

That's important to note when comparing very old (1947) income figures, when many of these programs did not exist, and today's.

 

[CRGreathouse]

I can't quickly locate it in quentiles which is what you likely wanted, but here is per capita income aggregated:
http://www.census.gov/hhes/www/income/histinc/p01AR.xls
which shows per capita US income in 2008 dollars about doubling from 1967 ($13.8k) until 2008 ($27k), a 95% increase. By comparison, household income over the same period shows:

1967 to 2008, in 2008 dollars
Bottom fifth: $9k to $11k (22%)
Top fifth: $100.4k to $171k (70%)
Top 5%: $158.4k to $294k (86%)
http://www.census.gov/hhes/www/income/histinc/h03AR.xls

Thanks!

The Census income figures cited in this thread largely do not include government transfer payments:

Maybe I should find a rough estimate of the current amount, add that in, and compare.

 

[mheslep]

Maybe I should find a rough estimate of the current amount, add that in, and compare.

Maybe a non-trivial exercise. The census questionnaire (SIPP) includes questions about that, but how many people are going to know, given the docs bill Medicaid/Medicare directly, i.e. 'oh yes Medicaid paid $20k this year to my doc and hospital'.

The place to start might be with total Medicaid outlays, and if you can somehow identify that those are all under that lowest quentile, then simply divide by the number of recipients. I spent some time once looking at Medicaid qualifiers, and they're complicated - some places extending up to 200% of the poverty level, have children or not, etc. And that is all just for Medicaid payments. Edit: Many of the transfer payments don't show up as census income: rent or housing subsidies, food stamps or other welfare, school lunch program, etc

 

[CRGreathouse]

Maybe a non-trivial exercise.

Surely.

First, though, an order-of-magnitude calculation on Medicaid. 2008 expenditures were $191.5 billion. If the benefits were evenly shared amongst the lower-earning half, the lowest quintile's share is 2/5, or $76.6 billion. The US population in 2008 was 304.4 million, or $250 each. If the bottom quintile received all of Medicaid benefits (probably closer to the truth, though certainly an overestimate by some amount) it would be $630 each.

I can't find the exact spending for Medicaid in 1967 (the program having started two years earlier), but it seems to be subsumed in the $2.942 billion "Public assistance (excluding medical care for the aged)". In 2008 dollars, this is $18.8 billion. [CPI-U. Yes, I know... I should really have used the CPI-U-RS.]

That would make the 1967-2008 increase for the lowest quintile about 24% rather than 22%.

 

[mheslep]

Surely.

First, though, an order-of-magnitude calculation on Medicaid. 2008 expenditures were $191.5 billion. If the benefits were evenly shared amongst the lower-earning half, the lowest quintile's share is 2/5, or $76.6 billion. The US population in 2008 was 304.4 million, or $250 each. If the bottom quintile received all of Medicaid benefits (probably closer to the truth, though certainly an overestimate by some amount) it would be $630 each...

Sounds low. SSA reports 2006 total number of recipients 57.7 million, total 2006 payments as $268.5 billion*, and average yearly payout as $4,651.
http://www.ssa.gov/policy/docs/statcomps/supplement/2008/8e.html
The next question is does the census' bottom fifth capture all of that income.

*Which BTW has been doubling every ten years.

 

[DivingMullah]

I can't quickly locate it in quentiles which is what you likely wanted, but here is per capita income aggregated:
http://www.census.gov/hhes/www/income/histinc/p01AR.xls
which shows per capita US income in 2008 dollars about doubling from 1967 ($13.8k) until 2008 ($27k), a 95% increase. By comparison, household income over the same period shows:

1967 to 2008, in 2008 dollars
Bottom fifth: $9k to $11k (22%)
Top fifth: $100.4k to $171k (70%)
Top 5%: $158.4k to $294k (86%)
http://www.census.gov/hhes/www/income/histinc/h03AR.xls

One thing census doesn't include is the capital Gain, which actually makes the top 5% income increase much more disproportionate than rest of the group, tax cuts for them aggravated the situation even more.

This paper discusses how and why there has been more downward mobility post 1980 than in the previous decades.

http://findarticles.com/p/articles/mi_m0254/is_n1_v53/ai_15163028/pg_8/?tag=content;col1


The health of any society is measured in the social upward mobilities of its citizen. From 1950s till 1970s it was the golden age of the middle class, despite relative high taxes the society was prospering and there was an explosion in the middle class income and wealth, Not only our national deficit was the lowest since WWII, we were the largest lender of funds and the largest exporters of goods (signs of a first world nation)

[unsourced claims deleted]

Diving Mullah

 

[WhoWee]

Sounds low. SSA reports 2006 total number of recipients 57.7 million, total 2006 payments as $268.5 billion*, and average yearly payout as $4,651.
http://www.ssa.gov/policy/docs/statcomps/supplement/2008/8e.html
The next question is does the census' bottom fifth capture all of that income.

*Which BTW has been doubling every ten years.

Does that outlay include the payment of Medicare Part B premiums ($96.40 to $110.50 each)?

Another benefit that might be accounted separately is the LIS program (technically part of Social Security) that coordinates with Medicare.

 

[CRGreathouse]

Sounds low. SSA reports 2006 total number of recipients 57.7 million, total 2006 payments as $268.5 billion*, and average yearly payout as $4,651.
http://www.ssa.gov/policy/docs/statcomps/supplement/2008/8e.html
The next question is does the census' bottom fifth capture all of that income.

*Which BTW has been doubling every ten years.

I got my numbers from
http://www.hhs.gov/asrt/ob/docbudget/2010budgetinbriefm.html

Unfortunately there's no overlap, so I can't say with certainty that one is wrong. Are these measuring different things?Edit: While I'm at it, here's my source (poor as it is) for the 1967 spending:
http://fraser.stlouisfed.org/publications/usbudget/page/11438

 

[CRGreathouse]

One thing census doesn't include is the capital Gain, which actually makes the top 5% income increase much more disproportionate than rest of the group, tax cuts for them aggravated the situation even more.

This would be extremely hard to measure properly, though, with the changes to tax law over that period. With income tax falling relative to capital gains over that period, more tax would be reported as income rather than capital gains in 2008 vs. 1967. (The top tax rate in 1967 was 70%; in 2008, 35%.) So my guess would be that the change in real earnings to the wealthy over that period would be overstated by looking only at income and understated looking only at capital gains. (Obviously, the wealth of the wealthy would be understated compared to lower percentile groups if only income was considered.)

So insofar as we're comparing change within groups, I disagree.

 

[Zantra]

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?

It all goes back to education. Lowest quintile have the lowest education and skillsets, thus have the highest levels of unemployment and lowest incomes. Those in the top quintiles are among the most highly educated, or with skilsets in enough demad as to make them extremely valuable from an earnings perspective. I'm sure this must have been stated elsewhere in this thread.

 

[russ_watters]

It all goes back to education. Lowest quintile have the lowest education and skillsets, thus have the highest levels of unemployment and lowest incomes. Those in the top quintiles are among the most highly educated, or with skilsets in enough demad as to make them extremely valuable from an earnings perspective. I'm sure this must have been stated elsewhere in this thread.

Agreed. If someone is 30 and has an 11th grade education, how are they any better than a 16-year old in 11th grade? Why give them any better a job than an $8 an hour part time job ad McD's? Yeah, they want a full time job and medical benefits, but they are competing against 16 year-olds who don't need either at a job where an $8 an hour pay rate doesn't justify a $4 an hour medical benefit. It is neither reasonable nor realistic for those in that 30% who haven't finished high school to expect that they can make enough money to get out of the bottom income bracket. And when the government pays to support such people, they are essentially paying out a reward for a poor life choice. Beyond just softening the sting of the failure, they are actually rewarding people for it.

 

[CRGreathouse]

Agreed. If someone is 30 and has an 11th grade education, how are they any better than a 16-year old in 11th grade? Why give them any better a job than an $8 an hour part time job ad McD's? Yeah, they want a full time job and medical benefits, but they are competing against 16 year-olds who don't need either at a job where an $8 an hour pay rate doesn't justify a $4 an hour medical benefit. It is neither reasonable nor realistic for those in that 30% who haven't finished high school to expect that they can make enough money to get out of the bottom income bracket. And when the government pays to support such people, they are essentially paying out a reward for a poor life choice. Beyond just softening the sting of the failure, they are actually rewarding people for it.

You want people to take responsibility for their actions; I understand that (radical as that would be as a policy, in general). But what if the person wants to work 40 hours at McD's, but can only work 18? Or they work as a landscaper, but business is down and they can only work a few hours a week... etc.

 

[Zantra]

You want people to take responsibility for their actions; I understand that (radical as that would be as a policy, in general). But what if the person wants to work 40 hours at McD's, but can only work 18? Or they work as a landscaper, but business is down and they can only work a few hours a week... etc.

Responsibility for your own actions. Great idea. if you need 40 hours and you work at mcdonalds-why? You're obviously not a teen. Those kinds of jobs are targeted at young adults, teens, and retirees, not 40 year olds with families and homes, right? Yet it ends up that way, from time to time. If you're working there, why? If you can only get part time work, then you need to work 2 jobs-OR..just a thought here.. go to SCHOOL.. whether that's college or trade/vocational school, it beats 2 mimimum wage jobs.

And where does this lead? So and so can't work full time at their McD's job because they have KIDS and they are a single PARENT. (note: no offense to any single parents out there). But then you have to ask WHY are you a PARENT when you work at mcdonalds? It's just one big fat slippery slope of errors in judgement, poor life choices, and they generally happen one after the other after the other.

Why am I ranting? because I have firsthand knowledge of these scenarios, and I've watched them play out again and again, with friends and family members, and it really saddens me that people try to find reasons for their situtations but refuse to start with the one in the mirror.

and I quote "DESERVE'S GOT NOTHIN TO DO WITH IT"

No one WANTS to be 30 and working at mickey D's, but it does happen. You may WANT a better paying job with benefits, but if you're 30 and doing that, something clearly went very wrong in your life. I think the vast majority of folks in that lowest quintile are capable of getting SOME kind of training to move up, so it becomes a choice, or just a lack of motivation to improve.

Wanting something and doing something about it are 2 different things.

I'm not dealing in absolutes here, but I think it's safe to say most of the bottom quintile don't get a pass due to circumstances.

 

[TheStatutoryApe]

Agreed. If someone is 30 and has an 11th grade education, how are they any better than a 16-year old in 11th grade? Why give them any better a job than an $8 an hour part time job ad McD's? Yeah, they want a full time job and medical benefits, but they are competing against 16 year-olds who don't need either at a job where an $8 an hour pay rate doesn't justify a $4 an hour medical benefit. It is neither reasonable nor realistic for those in that 30% who haven't finished high school to expect that they can make enough money to get out of the bottom income bracket. And when the government pays to support such people, they are essentially paying out a reward for a poor life choice. Beyond just softening the sting of the failure, they are actually rewarding people for it.

They have experience and hopefully a track record of reliable work habits with good references if nothing else. They are also capable of working flexible full time schedules. Would you prefer to hire a teen who only wants to work after school and may grudgingly take weekends over an adult with experience who can provide evidence of their work habits?
Certainly they should at least make sure to get a high school diploma but to say that they have no value as workers over 16 year olds is pretty ridiculous.

Responsibility for your own actions. Great idea. if you need 40 hours and you work at mcdonalds-why? You're obviously not a teen. Those kinds of jobs are targeted at young adults, teens, and retirees, not 40 year olds with families and homes, right?

Not so much. Far fewer teens take jobs now a days* and most young adults that are going to get a college education don't want jobs working at Mickey Dees, they work in the library or labs at school. Most kids who are going to college are going to college because of the stigma attached to having a job asking people "do you want fries with that".
Besides, most employers prefer reliable employees who can work flexible hours and this becomes all the more important in jobs with a high turn over where employees tend to not be very reliable. Teens, especially those going to school, do not have flexible hours and tend to work only seasonally.

*http://www.bls.gov/opub/ils/pdf/opbils49.pdf
The stats only include up to 2000, it was the first source I found.

 

[russ_watters]

But what if the person wants to work 40 hours at McD's, but can only work 18?

Mcd's is not obligated to give people whatever hours they want. And I suspect that if they did, the legal requirements on benefits change.

 

[russ_watters]

They have experience and hopefully a track record of reliable work habits with good references if nothing else.

Not if they are applying for an $8 an hour job at Mcd's they don't.

They are also capable of working flexible full time schedules. Would you prefer to hire a teen who only wants to work after school and may grudgingly take weekends over an adult with experience who can provide evidence of their work habits?

I'd hire adults to work when the teens are in school and teens to work other hours. But if an adult has experience and evidence of good work habits, they shouldn't be applying for that $8 an hour job.

Certainly they should at least make sure to get a high school diploma but to say that they have no value as workers over 16 year olds is pretty ridiculous.

A person over 16 certainly can have more value than a 16 year old without a diploma, but you can't assume they do. What you suggest is sometimes true and it sometimes isn't. It is also very likely that the diploma is a reflection of those other traits: someone who would have demonstrated reliability wouldn't have quit high school in the first place.

[edit]Actually, I think for a job at Mcd's, the lack of age and experience itself would be an attribute in some important ways: It means having no adult responsibilities and no salary history, so no pay/benefit expectations and higher flexibility outside the normal business day. Just by looking at a report card with lots of A's on it and math club as an activity, a prospective employer can figure they are going to get a high quality employee who they don't have to pay as if they are a high quality employee.

 

[TheStatutoryApe]

Not if they are applying for an $8 an hour job at Mcd's they don't.

That was not stipulated by your argument...

If someone is 30 and has an 11th grade education, how are they any better than a 16-year old in 11th grade? Why give them any better a job than an $8 an hour part time job ad McD's?

You simply make the assumption that they are not worth giving any better a job than that.

 

[CRGreathouse]

Mcd's is not obligated to give people whatever hours they want.

Of course. The point was that there are low-skill employees who are willing but not able to work a desired number of hours. A person can make ends meet at a low-skill, low-paying job working 50 hours a week, but not so much working 28 hours a week. Can nothing be done?

A person who brings home little money because of low skill and unwillingness to work long hours has no sympathy from me. But when they want to work and just can't find any/enough... that seems a real problem to me.

 

[WhoWee]

Of course. The point was that there are low-skill employees who are willing but not able to work a desired number of hours. A person can make ends meet at a low-skill, low-paying job working 50 hours a week, but not so much working 28 hours a week. Can nothing be done?

A person who brings home little money because of low skill and unwillingness to work long hours has no sympathy from me. But when they want to work and just can't find any/enough... that seems a real problem to me.

Often the "working poor" hold mulltiple part time jobs.

 

[Al68]

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?

Some would say so, but the argument with a long history is that although those services (maintaining law and order, fire protection, and national security) are not explicitly asked for by everyone, they are in fact provided to everyone, so the taxes are owed. The argument is similar to a hospital bill for a heart attack victim who never explicitly asked for medical care, but was provided the care anyway, and billed accordingly. Even if you disagree about whether they should be billed, it doesn't fit the definition of theft.

While one might argue that those services aren't requested by each individual, at least the services are actually provided to everyone. This is very different from taking money from someone by force without even a pretense that it is in return for services rendered.

Those services, law and order and national defense, are the only reason to even tolerate the "necessary evil" of government. At least in the minds of post-Enlightenment classical liberals, or libertarians, like me.

 

[rewebster]

Those services, law and order and national defense, are the only reason to even tolerate the "necessary evil" of government. At least in the minds of post-Enlightenment classical liberals, or libertarians, like me.

just a quick 'aside' comment--that is what I've heard from neo-conservatives that that is the ONLY responsibilities of the government are.


One thing I'm reading on this thread is a lot of generalities about the 'poor'---every 'poor' person has there own reason(s) for the situation that they're in.

Whether or not a person perceives that there should be less inequality, to me, is both personal (whether a person believes that its moral), or the morality of the nation and the constitution (how it is interpreted).

 

[Zantra]

I guesss all the kids like the ones in this video are just "lucky"

http://www.cnn.com/video/#/video/us/2010/03/04/simon.ca.education.cuts.cnn?hpt=C2

If you want something badly enough you CAN make it happen, in most cases.