4 ms·

... which leads me to think there's a general growth-lacking/deflationary process at work. And this is due to bad monetary policy.

nostrademons 10y ago
Not necessarily. According to a sibling commenter, upper end of the range is set at double the median income. If it's dropping, it indicates that the inflation-adjusted median income is dropping. One explanation for that is a contracting economy, but another one is simply that income is becoming more concentrated in the upper end of the distribution. Shift a large number of dollars from the bottom half of the income distribution to the upper half and the mean will stay the same, but the median will fall. Given the other findings in this infographic and general zeitgeist around income statistics, I think the latter explanation is a lot more likely.
- ArkyBeagle 10y ago
  Effectively, we have two economies - the two modes ( really, complete Pareto distributions ) that seem to have come unmoored to each other. The "upper" mode is much more ephemeral and paper-based than is the "lower" mode. It's a frothy stew of bubbly paper goodness. But it's effect on the "lower" mode is not as we would like it to be. So we treat the "lower" mode as its own ( not quite independent but not fully coupled ) distribution, raise inflation and wait. And although the "upper" mode does have real effects, it being more fictional than the "lower" mode means it's much more volatile and less ... real.
- dragonwriter 10y ago
  > One explanation for that is a contracting economy, but another one is simply that income is becoming more concentrated in the upper end of the distribution. Which is the correct explanation. See, for instance, the income distribution chart [0], from the national-level study that preceded the metro-level study referenced in the NYTimes article. From 1970 to 2014: The share of aggregate income received by the cohort below the middle (middle, again, is 2/3 to double the median income) has gone from 10% to 9% of all income The share received by the middle has gone from 62% to 43% of all income. The share received by the segment above the middle has gone from 29% to 49% of all income. [0] bottom of the two here: http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/st_2015-12-09_middle-class-01/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl...
dragonwriter 10y ago
Nope GDP per capita grew between 2000 and 2014, (GDP per capita should roughly parallel mean income, but median income can go down when the mean is going up if a greater share ends up at the top of the distribution.)

nostrademons 10y ago

Not necessarily. According to a sibling commenter, upper end of the range is set at double the median income. If it's dropping, it indicates that the inflation-adjusted median income is dropping. One explanation for that is a contracting economy, but another one is simply that income is becoming more concentrated in the upper end of the distribution. Shift a large number of dollars from the bottom half of the income distribution to the upper half and the mean will stay the same, but the median will fall. Given the other findings in this infographic and general zeitgeist around income statistics, I think the latter explanation is a lot more likely.

ArkyBeagle 10y ago
Effectively, we have two economies - the two modes ( really, complete Pareto distributions ) that seem to have come unmoored to each other. The "upper" mode is much more ephemeral and paper-based than is the "lower" mode. It's a frothy stew of bubbly paper goodness. But it's effect on the "lower" mode is not as we would like it to be. So we treat the "lower" mode as its own ( not quite independent but not fully coupled ) distribution, raise inflation and wait. And although the "upper" mode does have real effects, it being more fictional than the "lower" mode means it's much more volatile and less ... real.
dragonwriter 10y ago
> One explanation for that is a contracting economy, but another one is simply that income is becoming more concentrated in the upper end of the distribution. Which is the correct explanation. See, for instance, the income distribution chart [0], from the national-level study that preceded the metro-level study referenced in the NYTimes article. From 1970 to 2014: The share of aggregate income received by the cohort below the middle (middle, again, is 2/3 to double the median income) has gone from 10% to 9% of all income The share received by the middle has gone from 62% to 43% of all income. The share received by the segment above the middle has gone from 29% to 49% of all income. [0] bottom of the two here: http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/st_2015-12-09_middle-class-01/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl...

dragonwriter 10y ago

Nope GDP per capita grew between 2000 and 2014, (GDP per capita should roughly parallel mean income, but median income can go down when the mean is going up if a greater share ends up at the top of the distribution.)