It's the Inequality, Stupid

February 22, 2011 6:49 PM

Eight charts that explain everything that's wrong with America from Motherjones.com
posted by blue_beetle (103 comments total)

You just posted this so we would all go to bed angry, right?

/Gets popcorn, glass of wine, waits for someone to come by and tell us why this is all OK...
posted by tomswift at 6:57 PM on February 22, 2011

This is why I carry a 6 foot tall prop wallet around with me everywhere I go, lest someone discover I'm poor.
posted by phunniemee at 6:58 PM on February 22, 2011 [3 favorites]

Well, that was predictably disgusting. How does the wealth disparity in the US compare to elsewhere in the West? Australia in particular, I'd love to know the skew.
posted by nicolas léonard sadi carnot at 7:04 PM on February 22, 2011 [1 favorite]

Has the real estate bubble even popped yet?
posted by The Emperor of Ice Cream at 7:06 PM on February 22, 2011

On the plus side, the lower classes are entitled to 99% of the anger.
posted by tumid dahlia at 7:09 PM on February 22, 2011 [4 favorites]

How does the wealth disparity in the US compare to elsewhere in the West? Australia in particular, I'd love to know the skew.

Gini Coefficient. World chart here. Australia is less unequal than US.
posted by vidur at 7:10 PM on February 22, 2011 [1 favorite]

List of countries by income equality
posted by desjardins at 7:10 PM on February 22, 2011 [2 favorites]

I agree. Infographics are definitely what's wrong with America today.
posted by TheFlamingoKing at 7:12 PM on February 22, 2011 [21 favorites]

I suspect the "what Americans would like it to be" wealth distribution graphic was more an indictment of American math comprehension than of wealth inequality. If the the top 20% of Americans had 30% of the wealth, and the bottom 20% had 10% of the wealth, that would be an incredibly severe form of socialism.
posted by thewumpusisdead at 7:20 PM on February 22, 2011 [2 favorites]

Wow, that colour coded chart is amazing. Looks like the US completely bucks the trend for the developed world - Oz, Canada, Western Europe, they're all in the lowest three brackets.
posted by nicolas léonard sadi carnot at 7:23 PM on February 22, 2011 [1 favorite]

That last chart is pretty cool. You can see the corporate share of tax income spike after the Bush tax cuts, then move right back down to 7% or so over the next three years, just as the payroll tax percentage rises.

I don't know much about the US payroll tax, but I'm going to assume it's paid by poor people.
posted by Orange Pamplemousse at 7:23 PM on February 22, 2011 [1 favorite]

Dang that Oprah! She stole my lunch money again.
posted by Ideefixe at 7:24 PM on February 22, 2011

I think the idea of what we would like it to be is that we really want to see people rewarded for effort, for innovation, etc.

We just don't really think overall that it's fair to reward people for those things in such astounding disproportion to the needs of everyone else unless we *are* those people being rewarded in astounding disproportion to everyone else.

If you don't start off thinking of it as, "What would we have to change in this system" but rather "in an ideal system, where would the money be", I think the ideal distribution makes more sense.

I think it's very telling what those upper tax rates were in the post-WW2 years that conservatives seem to miss so badly. Versus what they are now. Why are they not pointing to *this* as something that needs to go back to the Way Things Were?
posted by gracedissolved at 7:24 PM on February 22, 2011 [6 favorites]

These charts always slay me.

Say it with me, folks: The economy is not a pizza. If I get two slices, it doesn't mean that you have to go hungry. It is possible to just bake a bigger pizza.

If you don't grok this, take an Econ 101 class.
posted by Cool Papa Bell at 7:27 PM on February 22, 2011 [9 favorites]

I've definitely taken more than Econ 101, and that just solidified my opinion about how fucked we all are.
posted by Stunt at 7:31 PM on February 22, 2011 [19 favorites]

Sad that seemingly few people say, "I agree with the great Reagan; the tax rate for millionaires should be 47.7 percent. Viva Reagan."
posted by ambient2 at 7:32 PM on February 22, 2011 [8 favorites]

"Jan Pen, a Dutch economist who died last year, came up with a striking way to picture inequality. Imagine people’s height being proportional to their income, so that someone with an average income is of average height. Now imagine that the entire adult population of America is walking past you in a single hour, in ascending order of income.
The first passers-by, the owners of loss-making businesses, are invisible: their heads are below ground. Then come the jobless and the working poor, who are midgets. After half an hour the strollers are still only waist-high, since America’s median income is only half the mean. It takes nearly 45 minutes before normal-sized people appear. But then, in the final minutes, giants thunder by. With six minutes to go they are 12 feet tall. When the 400 highest earners walk by, right at the end, each is more than two miles tall. " (The Economist, Jan 20, 2011)
posted by Auden at 7:32 PM on February 22, 2011 [60 favorites]

so income inequality is the only thing wrong with America? I'd say thats a pretty optimistic point of view.
posted by H. Roark at 7:33 PM on February 22, 2011 [1 favorite]

Say it with me, Cool Papa Bell: along with your 75% of the pie, you're getting control of how the next 500 pies are made, and who gets them.

If you don't grok this, take a PoliSci 101 class.
posted by FfejL at 7:33 PM on February 22, 2011 [67 favorites]

It is possible to just bake a bigger pizza.

That's what Wall Street thought too...
posted by inparticularity at 7:34 PM on February 22, 2011 [1 favorite]

It is possible to just bake a bigger pizza.

Yeah, That P.J O'Rourke, what a guy!

But seriously, I think the upshot of this is we have been baking a bigger pie, for the last 40 years, and yet, us guys doing the work never get a bigger piece!
posted by valkane at 7:35 PM on February 22, 2011 [17 favorites]

Funny how it is only deemed class war when the working poor wage it.
posted by joe lisboa at 7:36 PM on February 22, 2011 [38 favorites]

so income inequality is the only thing wrong with America? I'd say thats a pretty optimistic point of view.

posted by H. Roark

anti-eponysterical?
posted by joe lisboa at 7:37 PM on February 22, 2011

Yes, payroll taxes are paid by the poor. Kind of. They cap out, so it's more like they take a hugely disproportionate toll on the poor than on the rich, for whom they are negligible.

And what's going on here isn't about baking a bigger pie. It's about taking almost all the pizza, then demanding that if the rest of us want some, that we all pitch in and work to bake one, and then taking that as well while saying, "well, I was the one who spearheaded the whole 'bake a bigger pie' initiative, wasn't I?"
posted by Navelgazer at 7:40 PM on February 22, 2011 [22 favorites]

"Infographics are definitely what's wrong with America today."

Actually, the lack of the compelling use of infographics by our leaders is a very serious problem.

Here's what the President and his staff should be able to do in speeches, in order to make it clear that the US is falling behind other nations, and to support a rationale for economic and tax policy against nonsensical, ideological arguments.

...and here's the reality.

This is what is missed... and then some.

Apparently, you have to be a former Vice President or an old CEO in order to use compelling infographics.
posted by markkraft at 7:42 PM on February 22, 2011 [11 favorites]

I love how the rich (and some of their apologists) claim that obscene financial rewards are a necessary motivation for bankers and the like; yet the working class is supposed to be internally motivated by "personal responsibilty", fealty to their boss, the protestant work ethic or whatever.

It's a corrosive and hypocritical double standard that, more than any infographic, connects the present era to the age of the robber barons.
posted by Rumple at 7:47 PM on February 22, 2011 [68 favorites]

(Oh, and a modification of Hans Rosling's infographics geared towards showing how US citizens are starting to die years before those living in nations with a public healthcare system would've been a very useful thing to have in the most recent healthcare battle... especially when you start breaking the data down by states, showing that people in the heart of the Republican heartland were dying 5+ years before they needed to, due to systemic neglect.)
posted by markkraft at 7:47 PM on February 22, 2011 [3 favorites]

If you don't grok this, take an Econ 101 class.

From the Hoover Institute.
posted by Trochanter at 7:47 PM on February 22, 2011 [6 favorites]

It is possible to just bake a bigger pizza.

Only if everybody wants a thinner crust.

Or if the manufacturers of flour, cheese and pepperoni are able to instantaneously increase production.

Econ 101 lied to you, CPB. A 'growing exonomy' where over 100% of the growth goes to the top 10% is a shrinking economy for the remaining 90%. But students in Econ 101 all assume they're going to be part of the top 10%, so if you want to teach such things you have to transfer to the Liberal Arts.
posted by oneswellfoop at 7:48 PM on February 22, 2011 [19 favorites]

Just imagine a pizza made entirely of upper crust. Delicious, upper crust.
posted by Blazecock Pileon at 7:52 PM on February 22, 2011 [7 favorites]

The "Capitol Gain" section asserts 1 in 22 Americans are millionaires (or at least that 1 in 22 family net worths are over $1M, I guess). Is that really true? That seems remarkably high to me.
posted by Perplexity at 7:54 PM on February 22, 2011

Almost 70% are chubby, despite the fact 50% can barely read, 60% have cable television, Less than 1% lack access to indoor plumbing, More than 50% have air conditioning and most of those people will run it all summer long.

See it's fine, people are fat, accessing running water, entertained, and air conditioned. By any measurable standard in human history they are rich. Stop being so concerned about what the wealthy have and enjoy what you've got. Go to your toilet, take a huge dump and read a book or something; then wipe your ass and flush all that shit away. That's fucking luxury. Your so fucking rich you can't even see it. Too buzy worrying about some rich jerk's jumbo tron living room home theater setup, to notice the fact that you can carry a PayGo phone for like $20 and call someone from anywhere. We got internet with limitless human knowledge and porn, but NO you have to get all worked up over how someone might be getting super fucking rich off shaving off a few slivers of a percentage from all this change.

There is nothing wrong with America that couldn't be fixed by eating less takeout and going for a walk in the park. Turn off the TV and sit on the front porch for a spell and talk to your neighbors. Stop buying those cigarettes and $5 Lattes.
posted by humanfont at 8:01 PM on February 22, 2011 [8 favorites]

A person who makes more money than you is better than you.
posted by inedible at 8:03 PM on February 22, 2011 [1 favorite]

Say it with me, folks: The economy is not a pizza. If I get two slices, it doesn't mean that you have to go hungry. It is possible to just bake a bigger pizza.

If you don't grok this, take an Econ 101 class.

Ummm... what? Wealth is finite. No matter how much more wealth is found/created, it's still and always will be a percentage of the total wealth in existence and the entire point you're ignoring here is that the percentages have exponentially become further and further apart.

To entertain your analogy, yes, over the last half century bigger and bigger pizzas have been baked. And a small handful of people continue to eat 99% of it, with the 1% not enough to prevent many people from starving to death. For on this, please refer to everyone who is starving to death.

You went from "wealth is not a pizza" to "bake a bigger pizza," which is still a goddamn pizza. If you don't grok that, next time stay in geometry class instead of sneaking out to Pizza Hut.
posted by XQUZYPHYR at 8:04 PM on February 22, 2011 [14 favorites]

Jon Stewart explained it perfectly last night... we need to demand less of our corporate masters and be more like those wonderfully Capitalist Chinese.
posted by oneswellfoop at 8:05 PM on February 22, 2011 [1 favorite]

(and am I the only one who think Stewart stole a script from Colbert for that segment?)
posted by oneswellfoop at 8:06 PM on February 22, 2011

The rich get richer and the poor get... MacDonalds?
posted by valkane at 8:07 PM on February 22, 2011

There's a reason why people in Sweden live longer, happier lives. Their government was the first in Europe to adopt a centralized census... and they are obsessive about tracking and using government data to create public policy designed to improve the lives of their people.

The question we should ask, really, is what we want for our future. Do we want to base our public policies on quantifiable, observable -- if sometimes imperfect -- data, with certain actions leading towards measurable changes... or do we want to base it on ideological beliefs that simply aren't supported by reality.
posted by markkraft at 8:12 PM on February 22, 2011 [7 favorites]

We got internet with limitless human knowledge and porn, but NO you have to get all worked up over how someone might be getting super fucking rich off shaving off a few slivers of a percentage from all this change.

Health care for children with the temerity to be born into a poor family would be nice.
posted by [expletive deleted] at 8:13 PM on February 22, 2011 [34 favorites]

For on this, please refer to everyone who is starving to death.

Today the average American consumes something like 2x the number of calories per day as an American 100 years ago. Starving to death isn't the problem.

The payroll tax is a misleading name for what is essentially payments to a state run pension plan. You pay in, you get health care and retirement income. It has a cap because it caps its payouts.
posted by humanfont at 8:15 PM on February 22, 2011

We got internet with limitless human knowledge and porn

Here's Frank Stokes with that sentiment, set to music.
posted by Fiasco da Gama at 8:15 PM on February 22, 2011

Regardless of total pizza output, as your slice of the pizza grows bigger relative to mine, I am more and more likely to spit on your slice while you aren't looking. Eventually the only solution will be a sneeze guard so large as to disrupt table service, at which point no pizza can be served.
posted by condour75 at 8:16 PM on February 22, 2011

vidur: Gini Coefficient. World chart here. Australia is less unequal than US.

Australia nothin, India is less unequal than the US! More zomg obvious inequality, but apparently less so than here.

Jesus fuck that's sad.
posted by paisley henosis at 8:20 PM on February 22, 2011 [2 favorites]

Regardless of total pizza output, as your slice of the pizza grows bigger relative to mine, I am more and more likely to spit on your slice while you aren't looking. Eventually the only solution will be a sneeze guard so large as to disrupt table service, at which point no pizza can be served.

Metaphor alert!
posted by valkane at 8:22 PM on February 22, 2011 [1 favorite]

There is nothing wrong with America that couldn't be fixed by eating less takeout and going for a walk in the park. Turn off the TV and sit on the front porch for a spell and talk to your neighbors. Stop buying those cigarettes and $5 Lattes.

Wait, this is parody, right? Right? Right?
posted by joe lisboa at 8:22 PM on February 22, 2011 [14 favorites]

If we're talking infographics, here's a pretty damning one comparing the US to other "advanced economies" on a number of key quality of life stats.
posted by gompa at 8:51 PM on February 22, 2011

There was a reason progressive taxation was put into place-- and it wasn't for bleeding heart liberal reasons. It was to prevent what those charts show, but not for socialistic reasons of "equality". At some point, the United States as an economy and a country will not be able to operate with a gutted consumer class. The John Galts of the world may say "fuck you, I made this money", but without a viable middle class, he's going to find himself out-competed and out innovated by foreign firms.

Owners and executives are ultimately just as replaceable as assembly line drones and office paper pushers. Rentiers don't provide an exclusive service-- there are tons of Chinese and Indian know-nothings with an MBA and inherited wealth who can step in and own shit. The difference is that America once had a vibrant middle class that had access to social mobility-- workers making decent wages were able to buy decent products, and were able to provide their brightest to affordable quality universities that would train them to be upper class businessmen, civil servants, scientists, or cultural generators. These all contributed to American hegemony-- our higher labor costs didn't matter because we made the best shit. And we made the new technologies that made our economy dynamic. That is what made the "pizza" bigger; not finding new countries that kind of speak English to set up call centers.

But this all breaks down when you squeeze the middle class. Real wages have declined. It's harder to start a family let alone a business. Public colleges have lost funding so middle class students find themselves saddled with debt and find employers unwilling to hire people who expect to make a living wage. People don't become productive to the economy until far later it life. There's little social mobility, except downward for the middle and working class. Once credit dries up, consumption declines. More need public assistance. The housing market falls apart. The economy turns speculative, making busts and booms more vicious.

Instead of a top tier of American business leaders and investors, some sons of tradesmen and farmers, you have an entrenched class of rentiers, whose interests are multi-national. Once they sell off everything, their position is not secure either. Because eventually, China is going to just going to duplicate whatever they are doing and sell it to it's own middle class, which is growing rapidly enough to make China's economic inequality irrelevant for the time being.

Robber barons of the past knew this on some level. Rockefeller would eat an orphan, but he wouldn't damage the strength of the United States. This is ultimately why people like Teddy Roosevelt favored progressive taxation, union rights, labor reform, a livable wage and regulation of business. It wasn't to moderate, weaken or even change capitalism. It was to save it.
posted by spaltavian at 8:52 PM on February 22, 2011 [109 favorites]

There's a reason why people in Sweden live longer, happier lives. Their government was the first in Europe to adopt a centralized census... and they are obsessive about tracking and using government data to create public policy designed to improve the lives of their people.

And those public policies are funded by a a very free-market economy (and even they pale in comparison to another Nordic social democracy). It's worth noting that when you ignore tax levels, Nordic countries usually place higher on economic freedom indices than the US.

But yeah, good luck ever seeing that kind of free market/progressive taxation combination in the US. Republicans will kick and scream about progressive taxation, and Democrats (or at least a lot of their vocal supporters here on MetaFilter) will refuse to embrace anything that smacks of *gasp* capitalism.
posted by ripley_ at 8:52 PM on February 22, 2011

Say it with me, folks: The economy is not a pizza. If I get two slices, it doesn't mean that you have to go hungry. It is possible to just bake a bigger pizza.If you don't grok this, take an Econ 101 class.

This is one of the most inane comments I've ever read on this site. First of all if the economy is not a pizza, then why are you keeping the analogy in the very next sentence? Secondly, who exactly decides to bake the "bigger pizza" and, more importantly, pay for it? What happened to "there is no such thing as a free pizza," and all that?
posted by The Emperor of Ice Cream at 8:53 PM on February 22, 2011 [8 favorites]

Democrats (or at least a lot of their vocal supporters here on MetaFilter) will refuse to embrace anything that smacks of *gasp* capitalism.

Uh, hate to burst that particular bubble, but if they actually failed to embrace what you rightfully call *gasp* capitalism, they would cease to be Democrats. They would, for example, most likely be more properly identified as Socialist(s).
posted by joe lisboa at 8:56 PM on February 22, 2011 [3 favorites]

Democrats (or at least a lot of their vocal supporters here on MetaFilter) will refuse to embrace anything that smacks of *gasp* capitalism.

What a crock of absolute nonsense. It's the brand of capitalism that's at issue: Wall Street vs. Main Street. Much of the mainstream Democratic party has embraced Wall Street in a way that makes even the likes of Paul Volcker nervous. And Obama is not exactly standing up for the little guy.
posted by The Emperor of Ice Cream at 9:02 PM on February 22, 2011 [2 favorites]

And we made the new technologies that made our economy dynamic. That is what made the "pizza" bigger; not finding new countries that kind of speak English to set up call centers.

Except outsourcing has almost exactly the same effect as new technologies.

Your point would seem to imply the following:

1) Inventing new software that analyzes MRI scans cheaply is great, despite its impact on American MRI technicians

2) Starting a company that sends MRI scans to Chinese doctors to be analyzed for cheap is bad, despite having exactly the same effect on American consumers and MRI technicians
posted by ripley_ at 9:05 PM on February 22, 2011

The chart showing the 10 richest members of Congress with a combined net worth of over 2 billion dollars all voting for tax cuts for the rich is bad enough.

Yet, even worse when you focus on the fine print that 7/10 of these members are "Democrats".
posted by Rumple at 9:08 PM on February 22, 2011 [3 favorites]

Australia nothin, India is less unequal than the US! More zomg obvious inequality, but apparently less so than here.

Jesus fuck that's sad.

Well, India is not fair comparison in this context. Australia, being a Western and developed economy is in the same league as the US. As are UK, Canada, Western Europe etc. The US fails that comparison too (well, someone has to come last!).
posted by vidur at 9:11 PM on February 22, 2011

What's with all the talk about pizza? Is this why my pay packet always has anchovies in it? I hate anchovies. And they make my twenty dollar notes - my "dough", if you will - all greasy. From which we have the saying "to grease one's palm". And that's why the rich people need such big wallets, because while we're picking through anchovies and plankton in an effort to scratch together enough change for a beer, they have to contend with enormous whales. So I feel bad for them, in a way. Wallets full of whales.
posted by tumid dahlia at 9:18 PM on February 22, 2011 [5 favorites]

Also, humanfront, are you really making the argument that we aren't appreciating our bread and circuses enough?
posted by Navelgazer at 9:19 PM on February 22, 2011 [6 favorites]

Outsourcing is very nearly a one to one ratio of job loss, and it's basically instant. New technology just about never works that way, even when it ultimately replaces some works. Furthermore, new technology has ancillary effects, like raising the standard of living, lower prices outside of one narrow industry and so. They really aren't comparable.

If I outsource my widget factory, then my widgets will be cheaper and my customers will save some fraction of cost. (But I will probably pocket most of it.) I made some money in the short term, but you can only outsource so much, and eventually someone will make a better product then me. But I've already gotten my golden parachute, so my search for quarterly profits at the expense of long term security screws some one else. Widget Co is later liquidated and scooped up by a Belgian-Indian-Freedonia multinational.

Or, I could invest and invent a superior widget. It's a little more expensive and I put some people out of work over a few years because my new widget doesn't need it's flux capacitor to be manually calibrated. This allows several products in several industries to be made cheaper, and far more people fine far more products to me cheaper (but the several companies affected will pocket most of it, but possibly spend some of it to take fuller advantage of my widget). My company stays in business and I still employ mostly Americans.

Of course gutting the middle class is profitable in the short term. Short term thinking is the problem.
posted by spaltavian at 9:21 PM on February 22, 2011 [9 favorites]

What a crock of absolute nonsense.

Really? I can't see school vouchers (like Sweden's) going over well with much of Metafilter. Or mostly privatized fire and emergency services like Denmark. Or even defending free trade (fewer trade barriers than the US in every Nordic country, I believe).

I don't think I'm being unreasonable when I say that most left-leaning people tend to have kneejerk reactions against capitalism, much the same way that right-leaning people react to any kind of taxes.
posted by ripley_ at 9:21 PM on February 22, 2011 [2 favorites]

The economy is not a pizza. If I get two slices, it doesn't mean that you have to go hungry. It is possible to just bake a bigger pizza.

I was all set to argue that this didn't reflect the actual developments within the U.S. over the last thirty years. But no, I have to give this one to you: even for those at the bottom, income in real terms has risen over that time. So, for income, at least, the picture you paint is broadly right. For net worth (probably a better measure of wealth), I can only find numbers going back to 1989--which misses a pretty important piece of this history--but those numbers also support you. I have to admit, I was surprised at how clear this was, and it does change how I think about inequality.

That said, there are real problems with increasing inequality.

The people in the middle, whose income and wealth has stayed more or less constant over the years, are the ones who have created much of the new wealth. The fact that they have seen so little of this wealth seems unjust.

Concentration of wealth also translates to concentration of political power. (The U.S. Congress, for example, is made up mostly of the very rich). So as your share of the nation's wealth decreases, so does some of your say in how the nation is run.
posted by moss at 9:25 PM on February 22, 2011 [2 favorites]

Outsourcing is very nearly a one to one ratio of job loss, and it's basically instant.

Indeed. Which raises another fundamental hypocrisy that can't be pointed out often enough: we are led to believe that Capital must be free to move between countries at will and with no restrictions. We are simultaneously indoctrinated that the movement of labour must be severely limited - if not by law and policy alone, then by fences and guns.

This fundamental asymmetry is so inculcated that many people see it as necessary and natural and not as the fundamental lever of elite power.
posted by Rumple at 9:31 PM on February 22, 2011 [39 favorites]

Your odds of being a millionaire: 1 in 22 (better than I thought, actually; any millionaires out there care to lend me a buck? maybe a million of you?)

Your odds of being a millionaire if you're a member of congress: 1 in 2

income in real terms has risen over that time.

No, I don't think this is correct. The chart you cited is only adjusted in $2003 dollars. Doesn't the chart need to account for the decline in average wages, benefits and wealth resulting from the economic collapse (which only occurred much more recently, but erased many of the gains in investment wealth and other economic gains).

The effects of the recent financial crisis, by all accounts I've seen, were not distributed even close to proportionally. The extremely wealthy in fact saw growth in personal income during the same period. At least that's my understanding. I don't have cites right now and need to go to bed. But I believe this is correct. The picture at the bottom end is now much worse than your comment suggests.
posted by saulgoodman at 9:35 PM on February 22, 2011 [1 favorite]

the Sweden school voucher thing is nothing like the Cato institute version of school vouchers. no Swedish school is allowed to charge a student more than the value of the voucher. there are no elite schools. furthermore the public school system is such good quality in Sweden that there the vast majority of students still attend them despite the existence of the independent voucher schools.
posted by moorooka at 9:38 PM on February 22, 2011 [10 favorites]

I can't favorite Rumple's comment any harder - but I wish I could.

As I've gotten older, I've learned it's not about intellectual purity to capitalism or objectivism or whatever other right wing talking point. It's also definitely not about fairness.

For better or worse, it turns out to be about leverage. The elite are getting theirs, and maybe, finally they've overreached enough to wake up the typical American in Wisconsin, Michigan, Ohio, and Indiana to the fact that they should be getting theirs, too, instead of giving it away and being played for suckers.
posted by NoRelationToLea at 9:58 PM on February 22, 2011 [3 favorites]

The payroll tax is a misleading name for what is essentially payments to a state run pension plan. You pay in, you get health care and retirement income. It has a cap because it caps its payouts.

Can't believe I'm the first to jump on this (might be proven wrong on preview).

Are you implying that it should be capped because there are caps on benefits? Based on your other comments in this thread, I assume that you are. (What follows is probably unfair to some extent, because I might be ascribing additional ideas to your words, so I apologize in advance if that's the case, humanfront.)

Like every other anti-tax/libertarian/Econ 101 view of the world, that's narrowly sensible. The payroll tax is basically how we ensure that all people have retirement income. And I suppose that if you want to stop the thought process there and pretend that we're talking about an Algebra I problem, we have to have the payments coming in (from individuals) equal to the payments going out (to individuals).

But that's such a myopic viewpoint that I really have a hard time understanding it. Are you of the mindset that the the tax system should focus on individuals, and operate according to the same basic ideas of something like a banking account? That the amount that I pay in should be commensurate with the amount paid back to me, without any consideration of the structural, societal, and cultural forces that conspired to allow me to pay in a certain amount? That I owe no debt to society other than the amount that I paid in?

If I'm making a million dollars a year in income (or really, tens or hundreds in capital gains), it's absurd to think that the ledger needs to balance out come retirement age. As hard as I would have (hypothetically) worked, society would have worked much harder to get me to that point.

[/rant]
posted by graphnerd at 9:58 PM on February 22, 2011 [2 favorites]

The economy is not a pizza. If I get two slices, it doesn't mean that you have to go hungry. It is possible to just bake a bigger pizza.

But what if I hate pareto pizza?
posted by chortly at 9:59 PM on February 22, 2011 [2 favorites]

Just for fun, I took one of those graphs and looked up the corresponding data for Egypt. This is the result. It seems like we're the frogs in the boiling water.
posted by pjern at 10:03 PM on February 22, 2011 [20 favorites]

pjern: Um, wha? The second 20% has 13% of the wealth but the third 20% has 17% and the fourth 20% has 21%? Unless I'm totally missing something, that is backwards.
posted by parrot_person at 10:14 PM on February 22, 2011 [1 favorite]

Ummm... what? Wealth is finite. No matter how much more wealth is found/created, it's still and always will be a percentage of the total wealth in existence and the entire point you're ignoring here is that the percentages have exponentially become further and further apart.

Not even wrong.

Indeed. Which raises another fundamental hypocrisy that can't be pointed out often enough: we are led to believe that Capital must be free to move between countries at will and with no restrictions. We are simultaneously indoctrinated that the movement of labour must be severely limited - if not by law and policy alone, then by fences and guns.

This is the smartest thing in this thread. Open borders are an essential and unrecognized factor in free trade. Reducing control over migration in line with capital investment is the fastest way to equalize wage and labor standards.
posted by anigbrowl at 10:20 PM on February 22, 2011 [2 favorites]

I agree. Infographics are definitely what's wrong with America today.
posted by TheFlamingoKing at 10:12 PM
I will be stealing this line for use IRL, TheFlamingoKing, and I make no promises about crediting you.
posted by atomicstone at 10:21 PM on February 22, 2011

I think I'm going to bash my head against a wall for a while, then try to alleviate my despair with some good old bread (or beer) and circuses (or video games). I mean, fuck, what can I do about any of this? It's so titanically fucked, yet, as mentioned, any talk of trying to make the system more fair generates an overwhelming chorus of 'class warfare.' The thing is, those idiots shouting it, I mean, do they even know how far down on the chart they fit?

I can't even formulate words for how fucked I think this is. Guttural noises, grunts. Even the throwback lizard brain in me thinks this is wrong.
posted by Ghidorah at 10:37 PM on February 22, 2011 [2 favorites]

pjern: Um, wha? The second 20% has 13% of the wealth but the third 20% has 17% and the fourth 20% has 21%? Unless I'm totally missing something, that is backwards.

Eep: The Egypt data used 2nd 3rd and 4th quintiles in the reverse order than the other data. I fixed it. Thanks for catching that.
posted by pjern at 10:39 PM on February 22, 2011 [1 favorite]

"Surprising research by statistician Miles Corak shows that Americans have no more income mobility than Europeans — contradicting cultural presumptions of egalitarianism — and even less than Scandinavian countries, despite their heavy taxation."
posted by Blazecock Pileon at 11:20 PM on February 22, 2011 [3 favorites]

You know how Libertarians and Republicans wrap their rhetoric around the Founding Fathers...?!

Thomas Jefferson on progressive taxation and the land rights of citizens:

"I am conscious that an equal division of property is impracticable, but the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. . . Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise. Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labor and live on. If for the encouragement of industry we allow it to be appropriated, we must take care that other employment be provided to those excluded from the appropriation. If we do not, the fundamental right to labor the earth returns to the unemployed. It is too soon yet in our country to say that every man who cannot find employment, but who can find uncultivated land, shall be at liberty to cultivate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land."

It's really not too soon anymore... and there are plenty of McMansions out there whose front lawns aren't producing anything of value.
posted by markkraft at 11:57 PM on February 22, 2011 [6 favorites]

Something I think is missed in this discussion about outsourcing vs. technology development is that, realistically, the two often go hand-in-hand. Producers of technological innovation are not likely to be any more altruistic than the profit-seeking population at large, and in fact a great deal of the technological change we experience is predicated almost entirely on the availability of cheap labor and all sorts of externalized costs.

(I work for a small-but-rapidly-growing company employing a hundred or so Americans to develop technology. And if Chinese manufacturing went away tomorrow and the only substitute was to pay American workers in American factories bound by American regulations to produce the same goods (and for "American", substitute your first-world developed nation of choice), we wouldn't be able to keep the doors open a month. I feel more than a little conflicted about this.)

Indeed. Which raises another fundamental hypocrisy that can't be pointed out often enough: we are led to believe that Capital must be free to move between countries at will and with no restrictions. We are simultaneously indoctrinated that the movement of labour must be severely limited - if not by law and policy alone, then by fences and guns.

This paragraph by itself is enough to justify all the time I spent reading MetaFilter today.
posted by brennen at 12:13 AM on February 23, 2011

Reducing control over migration in line with capital investment is the fastest way to equalize wage and labor standards.

That sounds really painful.
posted by psycho-alchemy at 1:16 AM on February 23, 2011

Say it with me, folks: The economy is not a pizza. If I get two slices, it doesn't mean that you have to go hungry. It is possible to just bake a bigger pizza.

Seriously? The "it's not a zero-sum game" catchphrase always gives me a migrane. It's possible to bake a bigger pizza, and for you to take so much I still go hungry. Just because the economy grows doesn't mean the gains are distributed equally. In face the very point of these charts is to demonstrate that almost all the economic gains of the past three decades have gone to a vanishingly small proportion of the population.

In fact, on a personal level, it's possible to enrich oneself personally while destroying the wealth of a vast many people - this is what leveraged buy out firms do.

This is the smartest thing in this thread. Open borders are an essential and unrecognized factor in free trade. Reducing control over migration in line with capital investment is the fastest way to equalize wage and labor standards.

I've thought this for a while, it's comforting to see it expressed elsewhere. Is anyone talking about this in the public discourse? Is there a term for free movement of labor, or groups advocating for it publicly. I'm just wondering what the talking points would have to be like.

Robber barons of the past knew this on some level. Rockefeller would eat an orphan, but he wouldn't damage the strength of the United States. This is ultimately why people like Teddy Roosevelt favored progressive taxation, union rights, labor reform, a livable wage and regulation of business. It wasn't to moderate, weaken or even change capitalism.

They didn't, though (Andrew Carnegie aside). From my, admittedly limited understanding, the plutocrats ran rampant right up to the great depression - Teddy Roosevelt was a speedbump. We're just returning to the historical norm - a small aristocracy, a modest mercantilist class, and a vast working poor. I don't see anything to suggest that trend is going to reverse any time soon.
posted by heathkit at 1:49 AM on February 23, 2011 [7 favorites]

This thread is best read while listening to Bretton Woods' Let it trickle. Lyrics. mp3. Developing Country is my new favourite genre.
posted by klue at 1:57 AM on February 23, 2011

I've thought this for a while, it's comforting to see it expressed elsewhere. Is anyone talking about this in the public discourse? Is there a term for free movement of labor, or groups advocating for it publicly. I'm just wondering what the talking points would have to be like.

I have a citizenship with Canada, US and the UK (EU). This gives great flexibility in access to job markets. If you can get multiple citizenships, I'd recommend it.
posted by Blazecock Pileon at 4:18 AM on February 23, 2011

I think I'm going to buy my staff pizza for lunch today.
posted by box at 5:21 AM on February 23, 2011

Assume you have a small company with 40 employees and a payroll of $2million in salaries ($50,000/year). The business owner is paying $200,000 to cover the employer's half of payroll taxes.

Outsourcing is very nearly a one to one ratio of job loss, and it's basically instant.

This is incorrect. I've observed, planned and managed outsourcing projects during my long professional career. The net result is usually more jobs in the outsourced location than existed in the source location. Many times new positions from planned company expansion are created offshore and existing jobs onshore remain. This is not to say that at some point in 12-18months the original jobs onshore won't be eliminated after a few waves of outsourcing, but the net increase in positions is usually higher. Outsourcing is part of a growth strategy.
Let's say your business is growing at 10% / year, but you need to hire n new employees to support that growth. Hiring those employees in a high cost labor market constrains your ability to put money back into the business and make your budgets work.

Lately I've been seeing a lot of offshore projects come back onshore. Wages in traditional outsourcing centers in China and India are growing enormously and it is increasingly difficult to find and retain appropriately skilled labor, also with the volatility in oil prices many companies are wondering if they are over exposed by such a long supply chain. Even Chinese manufacturers are starting to look at the US as a place to begin operations. It doesn't take to many years of 20-30% wage growth to smooth things out. Also you have to understand that there is a productivity loss with people being so remote. When I was running a fairly large project with onshore and offshore labor, I found that the average offshore worker was only about 60% as productive as the onshore laborer (timezone, communications delays, misunderstood requirements, travel); however I could hire 4x the number of offshore people than onshore people so the net result was a near doubling of capacity.
posted by humanfont at 5:28 AM on February 23, 2011 [1 favorite]

OK, it's early in the morning and I've just had the one cup of coffee so far, but it still took me a few seconds to figure out that "Party in Panama" wasn't part of the infographics, just a similarly-colored ad interspersed between them on the MJ page. Which, in itself, is also part of the problem.
posted by Halloween Jack at 5:46 AM on February 23, 2011

vidur: Well, India is not fair comparison in this context. Australia, being a Western and developed economy is in the same league as the US. As are UK, Canada, Western Europe etc. The US fails that comparison too (well, someone has to come last!).

Comparing developed nations to developed nations is helpful for obvious reasons. My point was that having been to India and seen people literally living in tents and pooping in a hole in the ground right across the street for a 4 story palatial private home with manicured grounds and live-in staff, for that to be *less* income disparity than the USA, that's pretty striking.
posted by paisley henosis at 6:11 AM on February 23, 2011 [1 favorite]

Reducing control over migration in line with capital investment is the fastest way to equalize wage and labor standards.

Which is why wage and labor standards are equalized across the US since everyone's free to move... oh wait.
posted by ennui.bz at 6:25 AM on February 23, 2011

I don't think I'm being unreasonable when I say that most left-leaning people tend to have kneejerk reactions against capitalism, much the same way that right-leaning people react to any kind of taxes.

I am not opposed to Capitalism, I am opposed to Corporatism, which is what masquerades as Capitalism in America. I think putting some thing into the free market is fine. I don't, however, think that the private sector should be allowed unfettered freedom to bulldoze over everyone else. Nor do I think that the government, which is told to keep its hands off the precious, precious corporations, should then be encouraged to bail their asses out for them when they get in trouble, saving them from the dangers of the free market seas they're so manly for sailing.
posted by Legomancer at 6:51 AM on February 23, 2011 [6 favorites]

Inventing new software that analyzes MRI scans cheaply is great, despite its impact on American MRI technicians

Worthless example, because MRI technicians do not interpret scans. Your new software would have zero impact on MRI technicians.
posted by Kirth Gerson at 7:01 AM on February 23, 2011

humanfont Outsourcing is very nearly a one to one ratio of job loss, and it's basically instant.

This is incorrect. I've observed, planned and managed outsourcing projects during my long professional career. The net result is usually more jobs in the outsourced location than existed in the source location.

I wasn't talking about the new location. It's a one for one loss here: for every job outsourced, you lose virtually the same number of jobs here; outsourcing leads to very few new jobs here. Lower costs may lead to a little more hiring in an affected sector, but not much.

Technological innovation is different. Machines replacing human labor costs jobs here, but increases the need for skilled jobs here, and technological progress has broader benefits for society which outsourcing does not.

What if, instead of industrial technological innovation, a part of the West just doubled down on human labor in the form of bondage. Yes, their inital costs would be lower, but eventually a lack of technological innovation would catch up to them. Of course, this isn't a hypothetical, as 1865 showed us.

I'm not comparing slavery to outsourcing in terms of evilness. But finding ways to squeeze more blood from a stone only provides narrow, short term gain. It's great for India, but pretty lame for us. Sure, you make cheaper shoes now, but if I don't have a job, I can't buy your shoes at any price.
posted by spaltavian at 7:28 AM on February 23, 2011

Put another way, in an economy based upon consumption, the most important resource is consumers. We're giving away this resource very rapidly in order to temporarily cut costs.
posted by spaltavian at 7:31 AM on February 23, 2011 [3 favorites]

Put another way, in an economy based upon consumption, the most important resource is consumers. We're giving away this resource very rapidly in order to temporarily cut costs.

Davos Man doesn't care if consumers are American or Western European or Chinese or Australian.

In fact, Davos Man would probably rather invest in emerging, fast growing consumers instead of mature consumers because the margins are better in the former.
posted by notyou at 8:03 AM on February 23, 2011

One corollary of the asymmetrical controls on the movement of Capital vs. Labour is that we can review the superficially dysfunctional American health care system. By making it very difficult for many people to move their labour to another business, it acts to thwart people from seeking competitive advantages in the labour market.

While it is often pointed out how much General Motors, say, would save if there were a national health system in the United States, these benefits are probably outweighed by the advantages of the fearful control over the movement of Labour that the current corporatized health care allows.

In other words, even viewed from the perspective of Capital broadly, and not just the health care companies, the fearfulness produced by the current, highly asymmetrical, patchy and company-bound health system in the United States is a feature, not a bug.
posted by Rumple at 8:40 AM on February 23, 2011 [1 favorite]

By any measurable standard in human history they are rich. Stop being so concerned about what the wealthy have and enjoy what you've got. Go to your toilet, take a huge dump and read a book or something; then wipe your ass and flush all that shit away. That's fucking luxury. Your so fucking rich you can't even see it. Too buzy worrying about some rich jerk's jumbo tron living room home theater setup, to notice the fact that you can carry a PayGo phone for like $20 and call someone from anywhere. We got internet with limitless human knowledge and porn

There is a real point here, and a good one. We are rich in comparison to most of human history, everything is amazing and nobody is happy, and when I remind myself of all the interesting and fun things I can do with my time, I'm a happier person. Two years ago I was dead poor but I was working on some computing projects which were new and interesting to me, going hiking regularly in the nearby mountains, and generally happier than the summer before when I was pulling down a lot of money.

But at the same time, the idea that this is all about magic phones and home theater systems is wrong. Telling yourself that for most of history people didn't have the level of medicine we have today might cut it when you can't afford it for yourself, but nobody's going to accept that for their family. And I hear that love and families and stuff are better for people than limitless internet porn... but I also hear it's a lot harder to reach the income level at which people used to find the financial stability to settle down in a home in a neighborhood and start that phase of being part of neighborhood community. Heck, there are entire areas of the country where home ownership is essentially impossible for most of the population without the shady loans (not many people seem to talk about this driver of the housing bubble, which was basically that the "american dream" had somehow become simply out-of-reach for a lot of americans without the shenanigans and that's part of the reason the shenanigans moved so well). And when the right shocks go through the economy, yes, some people do in fact find getting adequate nutrition a problem.

And all this leaves alone the uneasy role that status occupies in the human psyche. I suspect it's a lot easier for people to find a healthy place in a community of more-or-less-equals than a society of vastly varying rewards.
posted by weston at 8:41 AM on February 23, 2011 [3 favorites]

One thing these charts make unquestionably clear: public school teachers are paid too much.
posted by Legomancer at 8:55 AM on February 23, 2011

I mean, fuck, what can I do about any of this? It's so titanically fucked, yet, as mentioned, any talk of trying to make the system more fair generates an overwhelming chorus of 'class warfare.'

Yeah. I keep hearing about this class warfare, and I've yet to see it as anything other as a fight being waged against the poor.

And it's pissing me off because I have my torch and pitchfork ready and I'm just waiting for this whole thing to blow up and people keep trying to be reasonable.
posted by quin at 9:30 AM on February 23, 2011 [2 favorites]

This is the smartest thing in this thread. Open borders are an essential and unrecognized factor in free trade. Reducing control over migration in line with capital investment is the fastest way to equalize wage and labor standards.

I've thought this for a while, it's comforting to see it expressed elsewhere. Is anyone talking about this in the public discourse? Is there a term for free movement of labor, or groups advocating for it publicly. I'm just wondering what the talking points would have to be like.

I know Noam Chomsky has written on this topic, probably Howard Zinn too. Can't think of the texts, but that's a starting point.
posted by Saxon Kane at 9:33 AM on February 23, 2011 [1 favorite]

Inventing new software that analyzes MRI scans cheaply is great, despite its impact on American MRI technicians

Worthless example, because MRI technicians do not interpret scans. Your new software would have zero impact on MRI technicians.

So change it to radiologists, then. The point was pretty clear regardless; there's no need to nitpick about the specific example given.
posted by ook at 10:14 AM on February 23, 2011 [1 favorite]

any talk of trying to make the system more fair generates an overwhelming chorus of 'class warfare.'

Just gotta own it man.

"Fuck yeah it's class warfare, what of it?"
posted by thsmchnekllsfascists at 10:52 AM on February 23, 2011 [3 favorites]

notyou, I have a hard time arguing with this quote from one of the "Davos men" in the article you linked to.

if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade
posted by straight at 11:39 AM on February 23, 2011

if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade

How many Chinese and Indian people would be lifted from poverty by knocking one American out of the executive class and into the middle class?
posted by thsmchnekllsfascists at 11:44 AM on February 23, 2011 [5 favorites]

This is the smartest thing in this thread. Open borders are an essential and unrecognized factor in free trade. Reducing control over migration in line with capital investment is the fastest way to equalize wage and labor standards.

I've thought this for a while, it's comforting to see it expressed elsewhere. Is anyone talking about this in the public discourse? Is there a term for free movement of labor, or groups advocating for it publicly. I'm just wondering what the talking points would have to be like.

You can Google "Movement of natural persons". This is a regular item of discussion in WTO. While this complex issue can't be summarized easily, let me just say that "evil corporations" do indeed want free movement of people while the governments across the world are a bit less enthusiastic about it or they want this movement only in certain fixed directions (Indians want to be able to send their engineers to service companies in the US, but don't want Bangladeshi labor to come and work on Indian farms, for example).
posted by vidur at 11:54 AM on February 23, 2011 [2 favorites]

People will never be able to move as freely as capital. Ever.
posted by adamdschneider at 12:32 PM on February 23, 2011

Ah, facts. Once they sink in, then the party can begin.
posted by Twang at 5:29 PM on February 23, 2011

How many Chinese and Indian people would be lifted from poverty by knocking one American out of the executive class and into the middle class?

Depends how you redistribute the liberated wealth.

As the system is currently run, the answer is none, because the other executives in the room will divvy up the fallen executive's loot and keep it for themselves.
posted by notyou at 8:23 AM on February 24, 2011 [1 favorite]

Really? I can't see school vouchers (like Sweden's) going over well with much of Metafilter.

Voucher in the United States are nothing more than a concerted effort by conservatives to erode the current separation between church and state. There's no other reason that this movement has the support it does. 70% of Swedes are part of the Church of Sweden and until 2000 it was the official state church (acc. to Wikipedia). Considering that only 2% of the 70% of Swedes who are officially state members attend church regularly, I would say that the dynamic is probably a bit different. And even then, I think we can safely assume that a voucher school in Sweden will actually teach their students facts rather than teaching them about humans and dinosaurs frolicking together 3000 years ago.
posted by Deathalicious at 6:29 PM on February 27, 2011

In fairness, part of the reason that Americans don't understand the inequality issue is because there's a misconception of what people actually make.

People who make $100k routinely feel comfortable referring to themselves as "middle class" -- some have the grace to refer to themselves as "upper middle class". This is still hogwash.

According to this chart, if you make $100,000 per year, you make more than 85% of the population. So sorry, you are not middle class, you are not even upper middle class. You are wealthy.

Let's say that too many people are poor, so instead of looking at the middle we look a bit above the median for the "middle percentage". So let's say 50% is "lower middle class" and 70% is "upper middle class". According to those metrics, if you are making $45k you are lower middle class; if you make $70k you are upper middle class. Personally I think that's a fair range. I think if more people had that range in their heads as "middle class" then it would make a difference, although perhaps not a big dent on policy overall.

It certainly doesn't help that most depictions of "middle class" families on TV and movies quite obviously are living in houses, wearing clothes, and possessing items of a family making $100 grand or more -- that or a family living well beyond their means.
posted by Deathalicious at 6:49 PM on February 27, 2011 [1 favorite]