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July 17, 2005 11:02 PM Subscribe
In 1979-2000, the real income of the poorest fifth of American households rose by 6.4%
Does this count inflation? The CPI shows a 240% increase from 1979-2000.
posted by rolypolyman at 11:42 PM on July 17, 2005
Does this count inflation? The CPI shows a 240% increase from 1979-2000.
posted by rolypolyman at 11:42 PM on July 17, 2005
Never mind... I had to go look. Real income does factor in inflation.
posted by rolypolyman at 11:45 PM on July 17, 2005
posted by rolypolyman at 11:45 PM on July 17, 2005
An interesting view of things:
America's “problem” nowadays—and it is really a triumph—is that this meritocracy is working almost too well. Put crudely, educated people are marrying each other and pouring money into their children's education to make sure they go to the same universities.
posted by Aknaton at 11:52 PM on July 17, 2005
America's “problem” nowadays—and it is really a triumph—is that this meritocracy is working almost too well. Put crudely, educated people are marrying each other and pouring money into their children's education to make sure they go to the same universities.
posted by Aknaton at 11:52 PM on July 17, 2005
IANA economist, so maybe someone could help me out: why is income disparity a problem, so long as everyone's getting richer? It'd be one thing if the rich were getting richer at the expense of the poor, but as the article notes, they're not. The poorest segments of the population are still experiencing net increases in real income. Surely it's not surprising that the rich are getting rich faster; try walking into a bank with $600 vs. $6,000,000 and see what kind of interest rate you get...
posted by heavy water at 11:58 PM on July 17, 2005
posted by heavy water at 11:58 PM on July 17, 2005
Related, it kind of surprises (and amuses, and depresses) me how far people will go to create class systems in the US. Lots of little things that add up to a bigger picture, like how many people refuse to shop at certain department stores because they consider those places for bargain-hunters (ie poor and thus socially inferior people). It's wierd. This kind of stuff happens everywhere, but it's so noticably pronounced here in a country founded in part on doing away with the class system and seeking equality instead. So many people here clearly don't want that equality, they want a class system (with the proviso that there must be people on a lower rung than them, else what's the point? :-))
On re-reading that, I realised I should perhaps note I'm not talking about stuff like boycotting wal-mart for community/political reasons, but simple snobbery and Keeping Up Appearances.
posted by -harlequin- at 12:11 AM on July 18, 2005
On re-reading that, I realised I should perhaps note I'm not talking about stuff like boycotting wal-mart for community/political reasons, but simple snobbery and Keeping Up Appearances.
posted by -harlequin- at 12:11 AM on July 18, 2005
heavy water: why is income disparity a problem, so long as everyone's getting richer?
Getting 'richer' is an awkward way of putting it.
For the quarter-century after the second world war, income growth in America was fairly evenly spread. According to a study by the Economic Policy Institute (EPI), the poorest fifth of the population saw its income increase by as much as the next-poorest fifth, and so on in equal steps to the top. But in the past quarter-century, the rich have been doing dramatically better than the less well off. Since 1979, median family incomes have risen by 18% but the incomes of the top 1% have gone up by 200%. In 1970, according to the Census Bureau, the bottom fifth received 5.4% of America's total national income and the richest fifth got 40.9%. Twenty-five years later, the share of the bottom fifth had fallen to 4.4% but that of the top fifth had risen to 46.5%.
The disparity in net worth is stark. The top 1% have net worth equal to the bottom 90% (2001 Survey of Consumer Finances, PDF).
posted by daksya at 12:22 AM on July 18, 2005
Getting 'richer' is an awkward way of putting it.
For the quarter-century after the second world war, income growth in America was fairly evenly spread. According to a study by the Economic Policy Institute (EPI), the poorest fifth of the population saw its income increase by as much as the next-poorest fifth, and so on in equal steps to the top. But in the past quarter-century, the rich have been doing dramatically better than the less well off. Since 1979, median family incomes have risen by 18% but the incomes of the top 1% have gone up by 200%. In 1970, according to the Census Bureau, the bottom fifth received 5.4% of America's total national income and the richest fifth got 40.9%. Twenty-five years later, the share of the bottom fifth had fallen to 4.4% but that of the top fifth had risen to 46.5%.
The disparity in net worth is stark. The top 1% have net worth equal to the bottom 90% (2001 Survey of Consumer Finances, PDF).
posted by daksya at 12:22 AM on July 18, 2005
The disparity in net worth is stark. The top 1% have net worth equal to the bottom 90%
I'm not saying it wouldn't be nicer for psychological reasons if everyone's income was increasing at the same rate. My question was whether there's any economic reason why the current discrepancy is a bad thing. The article certainly doesn't mention anything of the sort; it seems to rely on some sort of implicit zero-sum notion that if the rich are raking it in, the poor must be suffering. That doesn't seem to be the case.
posted by heavy water at 12:33 AM on July 18, 2005
I'm not saying it wouldn't be nicer for psychological reasons if everyone's income was increasing at the same rate. My question was whether there's any economic reason why the current discrepancy is a bad thing. The article certainly doesn't mention anything of the sort; it seems to rely on some sort of implicit zero-sum notion that if the rich are raking it in, the poor must be suffering. That doesn't seem to be the case.
posted by heavy water at 12:33 AM on July 18, 2005
IANA economist, so maybe someone could help me out: why is income disparity a problem, so long as everyone's getting richer?
Income disparity may have a lot to do with health according to professor and physician Stephen Bezruchka.
Income disparity may have a lot to do with health according to professor and physician Stephen Bezruchka.
Stated very simply, societies with a bigger gap between those on top and those on the bottom will be less healthy than societies where there is a smaller gap. To illustrate this, let us look at the health of the United States of America, measured by life expectancy, say, the average number of years lived in this country. Fifty-five years ago, we were one of the healthiest countries in the world by this measure. Today, there are some 25 countries that are healthier than we are. Think of it, all the other rich countries are healthier than we are, and a number of poor ones as well.posted by euphorb at 12:37 AM on July 18, 2005
> why is income disparity a problem
Because of the negative consequences associated with relative poverty. According to Peter Townsend (and those who followed in his footsteps), poverty creates social exclusion from the wider community.
If you look at the thread yesterday about the people in Kentucky and their health problems, you can reasonably assume that these are a function of relative poverty. By the standards of many third world countries, these people can be regarded as relatively wealthy. They have a roof over their head, enough to eat, power and transportation. But their levels of deprivation relative to the rest of the society that they live in seems to result in very different lifestyle choices.
IIRC (and it's a long time since I read this stuff), in societies where the income distribution isn't so skewed (eg, some Scandinavian countries) tend to have greater cohesiveness and less marginalization, and consequently far fewer of the problems associated with those things.
Of course, this theory is heavily contested by those who argue that it's an argument for redistribution, not for reducing poverty. Often, those who make this argument can be seen spending as much on lunch as some people have to feed their families for a week -- so I guess they aren't keen on the idea of redistribution?
posted by PeterMcDermott at 12:37 AM on July 18, 2005
Because of the negative consequences associated with relative poverty. According to Peter Townsend (and those who followed in his footsteps), poverty creates social exclusion from the wider community.
If you look at the thread yesterday about the people in Kentucky and their health problems, you can reasonably assume that these are a function of relative poverty. By the standards of many third world countries, these people can be regarded as relatively wealthy. They have a roof over their head, enough to eat, power and transportation. But their levels of deprivation relative to the rest of the society that they live in seems to result in very different lifestyle choices.
IIRC (and it's a long time since I read this stuff), in societies where the income distribution isn't so skewed (eg, some Scandinavian countries) tend to have greater cohesiveness and less marginalization, and consequently far fewer of the problems associated with those things.
Of course, this theory is heavily contested by those who argue that it's an argument for redistribution, not for reducing poverty. Often, those who make this argument can be seen spending as much on lunch as some people have to feed their families for a week -- so I guess they aren't keen on the idea of redistribution?
posted by PeterMcDermott at 12:37 AM on July 18, 2005
heavy water: "it seems to rely on some sort of implicit zero-sum notion that if the rich are raking it in, the poor must be suffering. That doesn't seem to be the case."
But that's what the trend implies. The rates were even, now they're not. The distribution of new worth has skewed towards the rich (in 1989, top 400 = 1.5%, top 1% = 30.6%, bottom 90% = 32.6%; in 2001, top 400 = 2.2%, top 1% = 32.7%, bottom 90% = 30.2%).
posted by daksya at 12:49 AM on July 18, 2005
But that's what the trend implies. The rates were even, now they're not. The distribution of new worth has skewed towards the rich (in 1989, top 400 = 1.5%, top 1% = 30.6%, bottom 90% = 32.6%; in 2001, top 400 = 2.2%, top 1% = 32.7%, bottom 90% = 30.2%).
posted by daksya at 12:49 AM on July 18, 2005
And while I hate to follow up my own post, I'd just like to add that much of the discourse in the media here about why four young British muslims chose to strap bombs to their back is being framed in terms of their anger about the relative inequality that British muslims suffer, compared to other groups in the UK (including other immigrant groups such as Hindus from the same countries of origin, etc.)
They might be much, much better off than they would be if they were still living in Pakistan or Bangladesh, but it's the relative poverty that fuels their anger and sense of injustice.
posted by PeterMcDermott at 12:49 AM on July 18, 2005
They might be much, much better off than they would be if they were still living in Pakistan or Bangladesh, but it's the relative poverty that fuels their anger and sense of injustice.
posted by PeterMcDermott at 12:49 AM on July 18, 2005
From what I gather about the current world, money is a reasonably accurate metric for measuring raw power. And historically speaking, horrendously unbalanced concentrations of power have a disturbing tendency to yield rather ugly results. Sometimes violent and explosive, other times slow and rotting, but generally never something you'd want to live through.
posted by PsychoKick at 12:55 AM on July 18, 2005
posted by PsychoKick at 12:55 AM on July 18, 2005
Thanks euphorb and Peter. I'm not sure I agree, but those are (at least in principle) empirically-testable views. I don't have any stake in this issue--I was just curious as to whether reasonable arguments could be marshalled, or if the article is simply relying on an appeal to gut intuition that it can't be right for some people to make much more money than others.
Stated very simply, societies with a bigger gap between those on top and those on the bottom will be less healthy than societies where there is a smaller gap.
That's certainly possible, but there are lots of other factors that differentiate America from the rest of the world culturally and might account for Americans' poorer health. Know of any empirical data supporting this claim? (I only skimmed the link, so apologies if I missed anything).
If you look at the thread yesterday about the people in Kentucky and their health problems, you can reasonably assume that these are a function of relative poverty. By the standards of many third world countries, these people can be regarded as relatively wealthy.
True, but living standards and life expectancy in Kentucky do still far exceed those in virtually all of the developing world.
Also, it's not clear that lifestyle choices are directly attributable to relative poverty (what would the causal chain be?) There are plenty of other plausible alternatives. For example, IQ is fairly strongly inversely correlated with income, and presumably also with lifestyle choice...
Daksya: But that's what the trend implies. The rates were even, now they're not.
Well, it implies a zero-sum rate of growth. But that doesn't necessarily mean much; you could have the poor doubling their income every year and still be consistent with that principle. The point is that the real income of the poor is still increasing, so in some sense, they're getting wealthier. It seems like it should be harder to argue someone's screwing you over if you've still got more money in your pocket to show for it at the end of the day.
posted by heavy water at 12:58 AM on July 18, 2005
Stated very simply, societies with a bigger gap between those on top and those on the bottom will be less healthy than societies where there is a smaller gap.
That's certainly possible, but there are lots of other factors that differentiate America from the rest of the world culturally and might account for Americans' poorer health. Know of any empirical data supporting this claim? (I only skimmed the link, so apologies if I missed anything).
If you look at the thread yesterday about the people in Kentucky and their health problems, you can reasonably assume that these are a function of relative poverty. By the standards of many third world countries, these people can be regarded as relatively wealthy.
True, but living standards and life expectancy in Kentucky do still far exceed those in virtually all of the developing world.
Also, it's not clear that lifestyle choices are directly attributable to relative poverty (what would the causal chain be?) There are plenty of other plausible alternatives. For example, IQ is fairly strongly inversely correlated with income, and presumably also with lifestyle choice...
Daksya: But that's what the trend implies. The rates were even, now they're not.
Well, it implies a zero-sum rate of growth. But that doesn't necessarily mean much; you could have the poor doubling their income every year and still be consistent with that principle. The point is that the real income of the poor is still increasing, so in some sense, they're getting wealthier. It seems like it should be harder to argue someone's screwing you over if you've still got more money in your pocket to show for it at the end of the day.
posted by heavy water at 12:58 AM on July 18, 2005
That's certainly possible, but there are lots of other factors that differentiate America from the rest of the world culturally and might account for Americans' poorer health. Know of any empirical data supporting this claim?
Dr. Stephen Bezruchka does research on this issue. He has published extensively and has a website as well.
posted by euphorb at 1:11 AM on July 18, 2005
Dr. Stephen Bezruchka does research on this issue. He has published extensively and has a website as well.
posted by euphorb at 1:11 AM on July 18, 2005
heavy water: "The point is that the real income of the poor is still increasing, so in some sense, they're getting wealthier. It seems like it should be harder to argue someone's screwing you over if you've still got more money in your pocket to show for it at the end of the day."
The bottom 90% bear 75.4% of all debt, whereas the top 1% bear 5.4%. One may argue that the increase in income does not translate to substantial increase in freedom and prosperity, for the poor. Which is the purpose of the "American Dream", not plain subsistence. And degrees of freedom and prosperity are measured relatively.
posted by daksya at 1:13 AM on July 18, 2005
The bottom 90% bear 75.4% of all debt, whereas the top 1% bear 5.4%. One may argue that the increase in income does not translate to substantial increase in freedom and prosperity, for the poor. Which is the purpose of the "American Dream", not plain subsistence. And degrees of freedom and prosperity are measured relatively.
posted by daksya at 1:13 AM on July 18, 2005
My question was whether there's any economic reason why the current discrepancy is a bad thing
No, quite the opposite it seems - if you execute the weaker members of society who are unable to work and thus merely wealth parasites, your economy becomes a powerhouse because vast wealth is left over after the necessities of life have been taken care of, and that wealth can be plowed into R&D, luxuries, entertainment and quality of life, etc. There isn't any thing much more productive per capita than an economy consisting of nothing but productive workers, with everyone who isn't a productive worker taken out back and killed. :-)
If, on the other hand, you offer free food, shelter and medicine to people unable to work, naturally the worker's standards of living drop, as they have to share some of the wealth they previously had to themselves.
The US takes something close to the former approach - you don't really need to proactively kill people to stop them consuming resources, someone homeless, malnourished, and getting no medical care is clearly not consuming much, leaving far more resources for the rest of us to enjoy.
I guess what I'm saying is that looking at it in terms of economics misses the point of economics - the purpose of economics is to allow people to live well. The economy is merely a means to an end, our happiness is the end. Our happiness (meaning "being the best we can be") is the function the economy is built to serve, else there is no reason to have one.
The question as to whether it's better to cull the weak and have a few very wealthy people, or better to have lots of less-but-sufficiently-wealthy people, is seperate one. People differ, and their are far more choices than the two extremes I mentioned.
But to answer the question, America culls the weak more than most, and the economy benefits as a result.
posted by -harlequin- at 1:17 AM on July 18, 2005
No, quite the opposite it seems - if you execute the weaker members of society who are unable to work and thus merely wealth parasites, your economy becomes a powerhouse because vast wealth is left over after the necessities of life have been taken care of, and that wealth can be plowed into R&D, luxuries, entertainment and quality of life, etc. There isn't any thing much more productive per capita than an economy consisting of nothing but productive workers, with everyone who isn't a productive worker taken out back and killed. :-)
If, on the other hand, you offer free food, shelter and medicine to people unable to work, naturally the worker's standards of living drop, as they have to share some of the wealth they previously had to themselves.
The US takes something close to the former approach - you don't really need to proactively kill people to stop them consuming resources, someone homeless, malnourished, and getting no medical care is clearly not consuming much, leaving far more resources for the rest of us to enjoy.
I guess what I'm saying is that looking at it in terms of economics misses the point of economics - the purpose of economics is to allow people to live well. The economy is merely a means to an end, our happiness is the end. Our happiness (meaning "being the best we can be") is the function the economy is built to serve, else there is no reason to have one.
The question as to whether it's better to cull the weak and have a few very wealthy people, or better to have lots of less-but-sufficiently-wealthy people, is seperate one. People differ, and their are far more choices than the two extremes I mentioned.
But to answer the question, America culls the weak more than most, and the economy benefits as a result.
posted by -harlequin- at 1:17 AM on July 18, 2005
the purpose of economics is to allow people to live well. The economy is merely a means to an end, our happiness is the end.
You mean, the Market exists to serve us human beings? You commie.
posted by Boydrop at 1:45 AM on July 18, 2005
You mean, the Market exists to serve us human beings? You commie.
posted by Boydrop at 1:45 AM on July 18, 2005
heavy water: IANA economist, so maybe someone could help me out: why is income disparity a problem, so long as everyone's getting richer?
Because some goods are positional and because more and more elements of society are being brought into the market.
heavy water: I don't have any stake in this issue
That is just silly, we all have a stake in this issue, and an opinion.
heavy water: True, but living standards and life expectancy in Kentucky do still far exceed those in virtually all of the developing world.
But developing nations are not an interesting comparison. Kentucky itself, over history, would be interesting. I wonder if the living standards and life expectancy in Kentucky are improving - I wonder if the living standards and life expectancy of the poor in Kentucky are improving...
posted by Chuckles at 2:39 AM on July 18, 2005
Because some goods are positional and because more and more elements of society are being brought into the market.
heavy water: I don't have any stake in this issue
That is just silly, we all have a stake in this issue, and an opinion.
heavy water: True, but living standards and life expectancy in Kentucky do still far exceed those in virtually all of the developing world.
But developing nations are not an interesting comparison. Kentucky itself, over history, would be interesting. I wonder if the living standards and life expectancy in Kentucky are improving - I wonder if the living standards and life expectancy of the poor in Kentucky are improving...
posted by Chuckles at 2:39 AM on July 18, 2005
IANA economist, so maybe someone could help me out: why is income disparity a problem, so long as everyone's getting richer?
heavy water, what PsychoKick, Chuckles, and others said.
FWIW, below is the most eloquent explanation, IMHO. Some will go into some sort of anti-communist, epileptic fit over it but I think it answers your question:
Riches are a power like that of electricity, acting through inequalities or negations of itself. The force of the guinea you have in you pocket depends wholly on the default of a guinea in your neighbor’s pocket. If he did not want it, it would be of no use to you. When he is poor and long out of work the guinea is more valuable to you. Therefore, what is really desired, under the name of riches, is, essentially, power over men.
--John Ruskin
And, you DO have a stake in it. Saying you don't is like saying you don't have a stake in the form of government you live under because you area apolitical.
posted by a_day_late at 3:35 AM on July 18, 2005
heavy water, what PsychoKick, Chuckles, and others said.
FWIW, below is the most eloquent explanation, IMHO. Some will go into some sort of anti-communist, epileptic fit over it but I think it answers your question:
Riches are a power like that of electricity, acting through inequalities or negations of itself. The force of the guinea you have in you pocket depends wholly on the default of a guinea in your neighbor’s pocket. If he did not want it, it would be of no use to you. When he is poor and long out of work the guinea is more valuable to you. Therefore, what is really desired, under the name of riches, is, essentially, power over men.
--John Ruskin
And, you DO have a stake in it. Saying you don't is like saying you don't have a stake in the form of government you live under because you area apolitical.
posted by a_day_late at 3:35 AM on July 18, 2005
area= are
posted by a_day_late at 3:40 AM on July 18, 2005
posted by a_day_late at 3:40 AM on July 18, 2005
if you execute the weaker members of society who are unable to work and thus merely wealth parasites
I wonder, would there be net economic gains if individuals sustained primarly by returns on existing wealth suddenly had to work? What about people who've learned tricks for accumulating large sums of wealth without actually being productive--in other words, who either gain wealth by unscrupulously leveraging personal and professional connections or by outright fraud? To me, it stands to reason that because there's no necessary connection between earned wealth (cash and investments) and tangible productivity (output of useful goods and services) that the competitive pressures of the marketplace would have created at least a certain percentage of wealthy freeloaders by now. In fact, isn't that precisely what currency-based marketplaces select for: competitors who can accumulate and protect wealth by any means necessary, rather than competitors who are more productive? I'm not crying "eat the rich" here, or anything, before anyone goes into an anti-commie apostasy. I'm just speculating...
posted by all-seeing eye dog at 3:48 AM on July 18, 2005
I wonder, would there be net economic gains if individuals sustained primarly by returns on existing wealth suddenly had to work? What about people who've learned tricks for accumulating large sums of wealth without actually being productive--in other words, who either gain wealth by unscrupulously leveraging personal and professional connections or by outright fraud? To me, it stands to reason that because there's no necessary connection between earned wealth (cash and investments) and tangible productivity (output of useful goods and services) that the competitive pressures of the marketplace would have created at least a certain percentage of wealthy freeloaders by now. In fact, isn't that precisely what currency-based marketplaces select for: competitors who can accumulate and protect wealth by any means necessary, rather than competitors who are more productive? I'm not crying "eat the rich" here, or anything, before anyone goes into an anti-commie apostasy. I'm just speculating...
posted by all-seeing eye dog at 3:48 AM on July 18, 2005
why is income disparity a problem, so long as everyone's getting richer?
As others have noted, the problems are mostly political and social, not economic.
An economic problem might be that relative poverty has a high opportunity cost. Or, at least, the causes of relative poverty have high opportunity cost. The relatively poor people in the US are, disproportionately, people with low levels of education (or the same number of years, but from subpar schools) and lower levels of job-related skills.
If you addressed those underlying problems, increasing the education and skill levels of the bottom-earning fifth of the population, they could be far more productive and get richer faster. And do so by generating wealth that makes others richer as well. Relative poverty of the type we see now implies a large gap in investment in human capital. It implies large numbers of drugs that aren't designed, and cars that aren't built, and chips that aren't fabbed, and so on.
It's also possible, I suppose, that addressing those the underlying concerns might make income inequality "worse." It's at least possible that when you make the poor better off by increasing education and skill levels, this makes the rich better off at an even faster rate through more productive investment opportunities and so on.
posted by ROU_Xenophobe at 4:55 AM on July 18, 2005
As others have noted, the problems are mostly political and social, not economic.
An economic problem might be that relative poverty has a high opportunity cost. Or, at least, the causes of relative poverty have high opportunity cost. The relatively poor people in the US are, disproportionately, people with low levels of education (or the same number of years, but from subpar schools) and lower levels of job-related skills.
If you addressed those underlying problems, increasing the education and skill levels of the bottom-earning fifth of the population, they could be far more productive and get richer faster. And do so by generating wealth that makes others richer as well. Relative poverty of the type we see now implies a large gap in investment in human capital. It implies large numbers of drugs that aren't designed, and cars that aren't built, and chips that aren't fabbed, and so on.
It's also possible, I suppose, that addressing those the underlying concerns might make income inequality "worse." It's at least possible that when you make the poor better off by increasing education and skill levels, this makes the rich better off at an even faster rate through more productive investment opportunities and so on.
posted by ROU_Xenophobe at 4:55 AM on July 18, 2005
all-seeing eye dog: I wonder, would there be net economic gains if individuals sustained primarly by returns on existing wealth suddenly had to work?
No. They would be more disruptive than their productivity is worth! So what we are actually doing is keeping these rich lazy folk out of the workforce in a way vaguely similar to -harlequin-'s 'execution of the poor'.
posted by Chuckles at 5:13 AM on July 18, 2005
No. They would be more disruptive than their productivity is worth! So what we are actually doing is keeping these rich lazy folk out of the workforce in a way vaguely similar to -harlequin-'s 'execution of the poor'.
posted by Chuckles at 5:13 AM on July 18, 2005
why is income disparity a problem, so long as everyone's getting richer?
Imagine Joe earns $100 and Frank $1000 in a period of time...if one gives both of them $10 more, they both are getting richer at the same time ... for Joe it's a 10% increase of his income , for Frank a mere 1%.
Joe should be happier then Frank as Joe income has increased a lot more then Frank's..but if $10 buy you little (or if Joe really needs $100 more) then Joe isn't sensibly happier , neither is Frank happier if he considers a 1% increase as insignificant.
Now consider the following different scenario : Joe get $5 more and Frank gets $15 more..they both are richer, but for Frank $15 is still insignificant while Joe suffers the reduction of income far more then Frank
posted by elpapacito at 5:21 AM on July 18, 2005
Imagine Joe earns $100 and Frank $1000 in a period of time...if one gives both of them $10 more, they both are getting richer at the same time ... for Joe it's a 10% increase of his income , for Frank a mere 1%.
Joe should be happier then Frank as Joe income has increased a lot more then Frank's..but if $10 buy you little (or if Joe really needs $100 more) then Joe isn't sensibly happier , neither is Frank happier if he considers a 1% increase as insignificant.
Now consider the following different scenario : Joe get $5 more and Frank gets $15 more..they both are richer, but for Frank $15 is still insignificant while Joe suffers the reduction of income far more then Frank
posted by elpapacito at 5:21 AM on July 18, 2005
I think most of this was already said by Marginal Man in the first song on their 1983 first album:
Missing Rungs
The social ladder
It's not complete
It's missing rungs
To protect the elite
So tell me why
Is it that
They stand in line
To try that ladder
Just one more time?
Of course, one of the best things about the band and that song was that Senator Inouye's son, Kenny Inouye, was the lead guitarist.
posted by OmieWise at 5:28 AM on July 18, 2005
Missing Rungs
The social ladder
It's not complete
It's missing rungs
To protect the elite
So tell me why
Is it that
They stand in line
To try that ladder
Just one more time?
Of course, one of the best things about the band and that song was that Senator Inouye's son, Kenny Inouye, was the lead guitarist.
posted by OmieWise at 5:28 AM on July 18, 2005
So the challenge is different. But the solution once again is to be found in the education system—particularly America's rotten public schools. Republicans are, generally speaking, reluctant to spend more money—partly because they represent people in richer school districts and partly because so much cash has already been wasted (America spends much more than other countries). Meanwhile Democrats, enslaved to the teachers' unions, are generally unwilling to countenance reforms such as school vouchers and testing; and they are also keener on affirmative action, the system of race-based preferences which makes universities less competitive and keeps the poison of race in a debate which is best focused on income.
Huzzah. and Amen. Fire both the democrats and the republicans in local and state governments!
posted by bugmuncher at 6:11 AM on July 18, 2005
Huzzah. and Amen. Fire both the democrats and the republicans in local and state governments!
posted by bugmuncher at 6:11 AM on July 18, 2005
Our happiness (meaning "being the best we can be") is the function the economy is built to serve, else there is no reason to have one.
A radical notion that we Westerners would do well to think about. Once we individually have security of shelter and food, should we not be considering the overall health of our society?
posted by five fresh fish at 6:11 AM on July 18, 2005
A radical notion that we Westerners would do well to think about. Once we individually have security of shelter and food, should we not be considering the overall health of our society?
posted by five fresh fish at 6:11 AM on July 18, 2005
I am perpetually surprised at how willing some people are to assume wealth is a measure of merit, productivity, or intelligence. How valuable is the work of a mechanic compared to a marketing executive, or a nurse compared to a stock trader? Even in this thread one sees an implicit assumption in many posts that the poor in the US are lazy, chronically unemployed, less intelligent, and less valuable than the well off.
This ain't no perfect meritocracy. "Merit" is not an absolute quality transparently measured by income or educational achievement. If you're stranded on a boat at sea with a busted motor and no food, you'd best throw the banker overboard before the mechanic.
posted by realcountrymusic at 6:23 AM on July 18, 2005
This ain't no perfect meritocracy. "Merit" is not an absolute quality transparently measured by income or educational achievement. If you're stranded on a boat at sea with a busted motor and no food, you'd best throw the banker overboard before the mechanic.
posted by realcountrymusic at 6:23 AM on July 18, 2005
I am perpetually surprised at how willing some people are to assume wealth is a measure of merit, productivity, or intelligence.
Exactly. Especially when one look at the Ken Lay, the Bush family or Paris Hilton will show otherwise.
In high school, a rich kid told me that he didn't like Democrats because they "rewarded the poor", in his words. I can't even get my mind around that statement.
posted by jonmc at 6:58 AM on July 18, 2005
Exactly. Especially when one look at the Ken Lay, the Bush family or Paris Hilton will show otherwise.
In high school, a rich kid told me that he didn't like Democrats because they "rewarded the poor", in his words. I can't even get my mind around that statement.
posted by jonmc at 6:58 AM on July 18, 2005
why is income disparity a problem, so long as everyone's getting richer
They're not getting richer at the same rate and as already explained money = power. So, the strong get stronger and the weak become weaker relative to them. The power differential between the rulers and the ruled increases. The post was about class in America, a country founded presumably on a dislike of extreme power differentials. The political system is very much designed to maintain balance and prevent kingship, the passing of power from father to son by hereditary right. However, people have found another way to accomplish the same thing - the use of extreme relative wealth - money.
What further evidence of a functional class system is needed than to understand this: the current president is the son of a previous president. Out of almost 300,000,000 people, the system just happened to bestow the presidency on a presidents son. And as an amusing side note, both this man and his father's name is George, the very same name as the King that America rebelled against in the first place. King George III (of Great Britain) lost the british colonies that became America. Now we have George II (of America).
posted by scheptech at 7:25 AM on July 18, 2005
They're not getting richer at the same rate and as already explained money = power. So, the strong get stronger and the weak become weaker relative to them. The power differential between the rulers and the ruled increases. The post was about class in America, a country founded presumably on a dislike of extreme power differentials. The political system is very much designed to maintain balance and prevent kingship, the passing of power from father to son by hereditary right. However, people have found another way to accomplish the same thing - the use of extreme relative wealth - money.
What further evidence of a functional class system is needed than to understand this: the current president is the son of a previous president. Out of almost 300,000,000 people, the system just happened to bestow the presidency on a presidents son. And as an amusing side note, both this man and his father's name is George, the very same name as the King that America rebelled against in the first place. King George III (of Great Britain) lost the british colonies that became America. Now we have George II (of America).
posted by scheptech at 7:25 AM on July 18, 2005
Even in this thread one sees an implicit assumption in many posts that the poor in the US are lazy, chronically unemployed, less intelligent, and less valuable than the well off.
Yep—which is really just a way of rationalizing away any lingering guilt we have about the fact that our current economic system can’t afford to let everyone get an equal shot at success. As it is now, most executives and middle managers believe they rightly deserve a grossly disproportionate share of the wealth, because the skills required of an executive are such a rarity in the workforce. But the simple economics of the situation dictates that even if management skills weren’t so rare (granting for sake of argument that they are), there will always be a greater demand for low-level workers in the workforce than there is for managers. Managers don’t produce finished products, nor do they provide services: workers do. This creates an irresolvable tension in our economic system because job seekers have a compelling economic disincentive to pursue low-level positions—and yet we need to maintain a workforce in which the vast majority hold low-level positions rather than management-level positions in order to maintain healthy economic growth! Our economic system provides disincentives to achieving the kind of workforce we need in order to maximize productivity.
posted by all-seeing eye dog at 7:37 AM on July 18, 2005
Yep—which is really just a way of rationalizing away any lingering guilt we have about the fact that our current economic system can’t afford to let everyone get an equal shot at success. As it is now, most executives and middle managers believe they rightly deserve a grossly disproportionate share of the wealth, because the skills required of an executive are such a rarity in the workforce. But the simple economics of the situation dictates that even if management skills weren’t so rare (granting for sake of argument that they are), there will always be a greater demand for low-level workers in the workforce than there is for managers. Managers don’t produce finished products, nor do they provide services: workers do. This creates an irresolvable tension in our economic system because job seekers have a compelling economic disincentive to pursue low-level positions—and yet we need to maintain a workforce in which the vast majority hold low-level positions rather than management-level positions in order to maintain healthy economic growth! Our economic system provides disincentives to achieving the kind of workforce we need in order to maximize productivity.
posted by all-seeing eye dog at 7:37 AM on July 18, 2005
life is not a game.
Discrepancies between rich and poor are in no way a story of cleavers and dumbs, smarts luckies vs the average john dow loosers.
cause there is no wealth created without other people dedication, commitment and work.
the zero sum theory is just an excuse for the top few to suck and gain energy from the bottom.
just one word : ethic.
since the sermon preached on the mountain we can figure this : a world made just for few means trouble for everybody, including the fat cats.
(sorry for this awful pidgin... yes, i'm french.)
posted by BastilleWanderer at 9:13 AM on July 18, 2005
Discrepancies between rich and poor are in no way a story of cleavers and dumbs, smarts luckies vs the average john dow loosers.
cause there is no wealth created without other people dedication, commitment and work.
the zero sum theory is just an excuse for the top few to suck and gain energy from the bottom.
just one word : ethic.
since the sermon preached on the mountain we can figure this : a world made just for few means trouble for everybody, including the fat cats.
(sorry for this awful pidgin... yes, i'm french.)
posted by BastilleWanderer at 9:13 AM on July 18, 2005
why is income disparity a problem, so long as everyone's getting richer?
Well, I will take my shot at this now.
It wouldn't matter if every poor person in the US owned a home and a car and was debt-free if those poor people observed that the rich all owned airplanes and mansions and islands. They would get upset at a certain point. And they will rebel at a certain point. The key is to placate the poor enough so that the poor don't get upset enough to revolt. How can they revolt? They can riot. They can (God forbid) vote. They can (in the ultimate extreme) attack. Increasing the gap between rich and poor in the US increases the likelihood that something like that will happen.
In a way, the US operates as a combination of socialism (post office, roads, welfare, military, etc.) and capitalism. The US tries to strike some balance between the two. Over the past 25 years, it would seem that the scale has been tipping seriously in favor of capitalism. One of the negative consequences of that is that the gap between the rich and the poor is widening.
posted by flarbuse at 9:35 AM on July 18, 2005
Well, I will take my shot at this now.
It wouldn't matter if every poor person in the US owned a home and a car and was debt-free if those poor people observed that the rich all owned airplanes and mansions and islands. They would get upset at a certain point. And they will rebel at a certain point. The key is to placate the poor enough so that the poor don't get upset enough to revolt. How can they revolt? They can riot. They can (God forbid) vote. They can (in the ultimate extreme) attack. Increasing the gap between rich and poor in the US increases the likelihood that something like that will happen.
In a way, the US operates as a combination of socialism (post office, roads, welfare, military, etc.) and capitalism. The US tries to strike some balance between the two. Over the past 25 years, it would seem that the scale has been tipping seriously in favor of capitalism. One of the negative consequences of that is that the gap between the rich and the poor is widening.
posted by flarbuse at 9:35 AM on July 18, 2005
heavy water writes "why is income disparity a problem, so long as everyone's getting richer?"
In the extreme case if incomes get too out of whack the people at the bottom break out the pitchforks. And even now there are a lot more a the bottom than the top.
-harlequin- writes "like how many people refuse to shop at certain department stores because they consider those places for bargain-hunters"
Though no doubt this is often a keeping up appearances thing, it should be noted that one of the reason Wal-Mart et.al. are so cheap is because they handle cheap merchandise. Even name brand stuff like Levis that are handled in Wal-Mart are of lower quality than that handled by other stores.
From the article "America spends much more than other countries"
Is this actually a) true, b) only true if we include private school spending or c) not true at all?
posted by Mitheral at 11:02 AM on July 18, 2005
In the extreme case if incomes get too out of whack the people at the bottom break out the pitchforks. And even now there are a lot more a the bottom than the top.
-harlequin- writes "like how many people refuse to shop at certain department stores because they consider those places for bargain-hunters"
Though no doubt this is often a keeping up appearances thing, it should be noted that one of the reason Wal-Mart et.al. are so cheap is because they handle cheap merchandise. Even name brand stuff like Levis that are handled in Wal-Mart are of lower quality than that handled by other stores.
From the article "America spends much more than other countries"
Is this actually a) true, b) only true if we include private school spending or c) not true at all?
posted by Mitheral at 11:02 AM on July 18, 2005
I read somewhere long ago that a society needs to be 70% middle class to be politically stable.
Now I can't remember where I read this. Has anyone else ever heard this?
posted by small_ruminant at 11:14 AM on July 18, 2005
Now I can't remember where I read this. Has anyone else ever heard this?
posted by small_ruminant at 11:14 AM on July 18, 2005
Mitheral writes "Is this actually a) true, b) only true if we include private school spending or c) not true at all?"
This statement probably comes from the 2004 OECD "Education at a Glance" report. You can find a lot of the data, in Excel format, here. You'll probably be most interested in table B1, which puts the U.S. near the top in total per-student expenditures (Luxembourg and Norway spend more). This includes post-secondary education. The U.S. is also near the top in primary and secondary education, topped only by Luxembourg and Switzerland. I'm pretty sure this includes only public expenditures; I spent a bit of time reading about the methodology, but it's still not crystal-clear to me.
There's considerable debate about these numbers. Google "OECD education at a glance"--maybe add in "per-student spending"--to see some of it.
posted by mr_roboto at 12:05 PM on July 18, 2005
This statement probably comes from the 2004 OECD "Education at a Glance" report. You can find a lot of the data, in Excel format, here. You'll probably be most interested in table B1, which puts the U.S. near the top in total per-student expenditures (Luxembourg and Norway spend more). This includes post-secondary education. The U.S. is also near the top in primary and secondary education, topped only by Luxembourg and Switzerland. I'm pretty sure this includes only public expenditures; I spent a bit of time reading about the methodology, but it's still not crystal-clear to me.
There's considerable debate about these numbers. Google "OECD education at a glance"--maybe add in "per-student spending"--to see some of it.
posted by mr_roboto at 12:05 PM on July 18, 2005
The article certainly doesn't mention anything of the sort; it seems to rely on some sort of implicit zero-sum notion that if the rich are raking it in, the poor must be suffering. That doesn't seem to be the case.
There's a fairly convincing body of empirical evidence to suggest that highly concentrated wealth is bad. There is even an economic number to measure this: it's called the Gini index.
While Americans can argue ideologically that we don't want to be on the low end (eek! Socialism!), there is no way to argue that it's good to be on the high end of the GINI index (Third World countries). And that's where America has been heading the last few decades.
So I think it is actually an assumption among economists that wealth concentration is bad, and went unstated in the article.
Societies where the rich control almost all of the money are societies that tend to disintegrate.
posted by teece at 1:26 PM on July 18, 2005
There's a fairly convincing body of empirical evidence to suggest that highly concentrated wealth is bad. There is even an economic number to measure this: it's called the Gini index.
While Americans can argue ideologically that we don't want to be on the low end (eek! Socialism!), there is no way to argue that it's good to be on the high end of the GINI index (Third World countries). And that's where America has been heading the last few decades.
So I think it is actually an assumption among economists that wealth concentration is bad, and went unstated in the article.
Societies where the rich control almost all of the money are societies that tend to disintegrate.
posted by teece at 1:26 PM on July 18, 2005
You'll probably be most interested in table B1, which puts the U.S. near the top in total per-student expenditures
Which is all well and good, until some religionist pushes creationism into the science curriculum. Then it's just money wasted.
By all appearances, US public education may be costly, but it is not very good.
posted by five fresh fish at 1:33 PM on July 18, 2005
Which is all well and good, until some religionist pushes creationism into the science curriculum. Then it's just money wasted.
By all appearances, US public education may be costly, but it is not very good.
posted by five fresh fish at 1:33 PM on July 18, 2005
Income Inequality, Social Capital, and Violent Crime
posted by myeviltwin at 2:13 PM on July 18, 2005
posted by myeviltwin at 2:13 PM on July 18, 2005
You'll probably be most interested in table B1, which puts the U.S. near the top in total per-student expenditures (Luxembourg and Norway spend more). This includes post-secondary education. The U.S. is also near the top in primary and secondary education, topped only by Luxembourg and Switzerland.
Per capita spending on education is structured the same way as it is for health care. We spend loads on a few people and not much at all on some. It would be more useful to have a median number for each, but how would you track that in a system as fragmented as ours?
posted by dilettante at 2:16 PM on July 18, 2005
Per capita spending on education is structured the same way as it is for health care. We spend loads on a few people and not much at all on some. It would be more useful to have a median number for each, but how would you track that in a system as fragmented as ours?
posted by dilettante at 2:16 PM on July 18, 2005
another issue that is being missed here is that wealth is the capacity to command labor. The Bush tax cuts has freed a LOT of income from wealth that has gone into the real estate market, namely the INCOME PROPERTY real estate market. Already 1 out of 6 single family homes in Cali are rentals; this is a large driver of the current land value bubble.
I consider landlordism to be a significant social injustice / market failure, in that the 'enlightened' actions (buying and maintaining properties is good) of the landlord 'class' serve to in the end basically enslave another group (those that cannot afford their own home).
I am rather saddened by all the shoddy, aging multi-unit rental complexes I see; we need more medium-density condos and less apartments, and there's no reason to chintz out like we usually do on apartment construction, other than the greed of pursuing ROI.
posted by Heywood Mogroot at 2:22 PM on July 18, 2005
I consider landlordism to be a significant social injustice / market failure, in that the 'enlightened' actions (buying and maintaining properties is good) of the landlord 'class' serve to in the end basically enslave another group (those that cannot afford their own home).
I am rather saddened by all the shoddy, aging multi-unit rental complexes I see; we need more medium-density condos and less apartments, and there's no reason to chintz out like we usually do on apartment construction, other than the greed of pursuing ROI.
posted by Heywood Mogroot at 2:22 PM on July 18, 2005
i just want to say that as one who leans libertarian, i have no problem with the rich being a bazillion times richer than the poor, what concerns me is the trend.
all things being equal and fair, *every one benefits*. If a particular portion of society is growing more powerful and wealthy, its safe to bet that there is something rotten in denmark.
i still say fuck redistribution - you're stealing, grow up. The better answer is to deal with the inbalances that create this situation.
posted by Tryptophan-5ht at 9:08 PM on July 18, 2005
all things being equal and fair, *every one benefits*. If a particular portion of society is growing more powerful and wealthy, its safe to bet that there is something rotten in denmark.
i still say fuck redistribution - you're stealing, grow up. The better answer is to deal with the inbalances that create this situation.
posted by Tryptophan-5ht at 9:08 PM on July 18, 2005
I wonder how much imbalance would cause some of the poor people to snap.
I was just watching on 60 minutes that guerilla fighters in other countries just buy their 50 caliber sniper rifles from the usa then smuggle them back home. so I would assume its easier for a US citizen to get one.
posted by Iax at 12:58 AM on July 19, 2005
I was just watching on 60 minutes that guerilla fighters in other countries just buy their 50 caliber sniper rifles from the usa then smuggle them back home. so I would assume its easier for a US citizen to get one.
posted by Iax at 12:58 AM on July 19, 2005
i still say fuck redistribution
as a lefty-lib, lemme give ya a me-too.
This week in line at Winco the young couple ahead of me had their food stamp voucher out, and a case of Corona along with the food.
Things that make you go "hmmmm."
posted by Heywood Mogroot at 3:38 AM on July 19, 2005
as a lefty-lib, lemme give ya a me-too.
This week in line at Winco the young couple ahead of me had their food stamp voucher out, and a case of Corona along with the food.
Things that make you go "hmmmm."
posted by Heywood Mogroot at 3:38 AM on July 19, 2005
Heywood, here's a newsflash: Poor people make poor financial decisions. How DARE they buy Corona! Its even worse when you're young and poor.
Some of the posters are playing so hard at being righties they create some of the best arguments for being a leftie there are. Thanks, now go play with your toys.
The problem with mobility (and other notions) and the American Myth, is people believe so strongly in the myths, they refuse to see the truth before their eyes. America is the MOST FREE country on earth! If you don't believe that, you're unAmerican. Obviously, any bitching about loss of freedom is unwarranted.
America, the idea, is dying in the poison of its own mythos.
posted by Goofyy at 5:02 AM on July 19, 2005
Some of the posters are playing so hard at being righties they create some of the best arguments for being a leftie there are. Thanks, now go play with your toys.
The problem with mobility (and other notions) and the American Myth, is people believe so strongly in the myths, they refuse to see the truth before their eyes. America is the MOST FREE country on earth! If you don't believe that, you're unAmerican. Obviously, any bitching about loss of freedom is unwarranted.
America, the idea, is dying in the poison of its own mythos.
posted by Goofyy at 5:02 AM on July 19, 2005
Tryptophan-5ht: If you've read much libertarian literature, you'll recognize that we do not live in anything remotely resembling a free market. Rich people in America are not rich because they earned it but because the rate of return on investments climbs so sharply above a certain level.
Of course redistribution is very nearly always undesirable, but the very mechanisms that got rich folks rich are anti-free-market redistribution: redistributing corporate responsibility and debt, corrupt tax laws, shoving enforcement for intellectual property (drugs, people, it's not all mp3s) onto the public, etc.
posted by sonofsamiam at 7:17 AM on July 19, 2005
Of course redistribution is very nearly always undesirable, but the very mechanisms that got rich folks rich are anti-free-market redistribution: redistributing corporate responsibility and debt, corrupt tax laws, shoving enforcement for intellectual property (drugs, people, it's not all mp3s) onto the public, etc.
posted by sonofsamiam at 7:17 AM on July 19, 2005
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Is the author trying too hard to be fair and balanced or does he believe that the walls of some school are simply haunted?
posted by Space Coyote at 11:17 PM on July 17, 2005