8 ms·

The Geography of U.S. Inequality

90 points by martgnz 10y ago

anovikov 10y ago
If the per capita GDP of U.S. grew by 12.4%, how it happened that all classes of society were worse off in 2014 than in 2000? I don't trust that chart at all.
- sprafa 10y ago
  The growth of economic indexes is meaningless. The gains are going massively onto the people who already own capital. That's the engine of inequality. Also... You don't "trust" that chart? You can probably calculate it yourself if you want. That chart is data. If you have any reasonable arguments against the accuracy of that data Id love to hear it.
  - yummyfajitas 10y ago
    Not trusting a chart because it's numbers seem to contradict other numbers is perfectly valid and reasonable. Your comment about gains going to people who own capital (who, incidentally, are primarily middle class homeowners) is not a refutation of it. In fact, it's completely irrelevant. A refutation would be explaining why GDP and income don't necessarily correlate, which is more a matter of accounting identities. Specifically, GDP != income, income is merely one component of it.
    - anovikov 10y ago
      Because income is still over 60% of GDP, GDP growing while income falls would mean a really dramatic growth of all other components. I can't see how it may be true.
      - deleted 10y ago
        [deleted]
    - antisthenes 10y ago
      The wage share in the United States has been consistently falling from ~64% to about 57% now. (as a % of GDP) It's quite easy to see that even if GDP grew 12% as someone else mentioned, the change from 64% to 57% would keep incomes at approximately the same level (and perhaps even slightly lower).
      - anovikov 10y ago
        Income is not just wage. Total personal income is about 80% of GDP and that figure doesn't change much over time.
        dragonwriter 10y ago
        > Income is not just wage. Total personal income is about 80% of GDP Since personal income includes capital income, that's a useless figure when "wage" is being used as an (admittedly, imperfect) proxy for labor income as opposed to capital income, as the context upthread makes clear it was.
        antisthenes 10y ago
        https://fred.stlouisfed.org/series/PRS84006173#0 https://fred.stlouisfed.org/series/PRS84006173#0 Wage share is an economically accepted term, with data from BLS behind it. You literally made up some number and said "it doesn't change much over time". You're going to need to provide a source for that 80%.
        anovikov 10y ago
        Easily. Personal income was 15737.7 billion in 2015 http://www.bea.gov/newsreleases/national/pi/2016/pdf/pi0716.pdf http://www.bea.gov/newsreleases/national/pi/2016/pdf/pi0716.... and GDP in current dollars was 18036.6 billion - http://www.bea.gov/national/xls/gdplev.xls http://www.bea.gov/national/xls/gdplev.xls, so 87.5% of GDP was income, and that figure has been pretty much constant over last 50 years, at never out of 75-90% range for sure. In fact, it is higher than average in the last 10 years or so - while difference is really small. Disposable income after all taxes and including all social transfers (excluding non-monetary ones like food stamps and assisted housing) was 69.5% of the GDP, also quite typical figure which shows to tendency to fall over time, more likely to rise. Surely that includes dividends, rents, and realized capital gains. And yet, it must have been reflected in the chart in question, if only in the top decile - while chart somehow shows incomes of all deciles falling from 2000, which is hard to believe.
  - fumplethumb 10y ago
    > The gains are going massively onto the people who already own capital. That's the engine of inequality. This is a main point in Capital in the 21st Century by Thomas Piketty. He explains the capital/income ratio and its effects on the economy. Decent write up here: http://www.robertdkirkby.com/blog/2015/summary-of-piketty-i/ http://www.robertdkirkby.com/blog/2015/summary-of-piketty-i/
  - throwanem 10y ago
    > That chart is data. No chart is ever data. A chart, like the result of an SQL query, is a projection via analysis. The analysis may be trivial, or it may not. You can hide a lot in non-trivial analysis if you want to. I don't say that the NYT did so here (and I don't say that it didn't), but it's hard to have any kind of productive discussion when something this basic is overlooked.
  - anovikov 10y ago
    OK, so what? That is still income isn't it?
- fumplethumb 10y ago
  > If the per capita GDP of U.S. grew by 12.4% Where did you get that number? No way that's right. Here are the numbers from the Fed: https://fred.stlouisfed.org/series/A191RP1Q027SBEA https://fred.stlouisfed.org/series/A191RP1Q027SBEA Annual per capita GDP growth never exceeded 7% from 2000-2014.
  - yummyfajitas 10y ago
    Wrong series. This is the right one: https://fred.stlouisfed.org/series/A939RX0Q048SBEA https://fred.stlouisfed.org/series/A939RX0Q048SBEA Real GDP/capita = $43,935 in Q1 2000, $50,549 in Q4 2014. That's 15% growth. Your own numbers don't disagree with this if you integrate them and divide by population.
    - fumplethumb 10y ago
      Ahh I see now. OP was talking cumulative growth, not annualized growth. Thanks!
- wavefunction 10y ago
  All the gains went to the richest in this country. The middle class in America shrank considerably following 2009.
- deleted 10y ago
  [deleted]
- Bahamut 10y ago
  Excepting the very rich is what the point of the article is I believe.
- LizardLarry 10y ago
  Numbers of this sort are usually fucking worthless because of the manipulation applied to them in accordance with political goals. Forget the government figures and look at the market. Sure you might make a buck more an hour but the price of meat has doubled (roughly) in the past five years. But the curious thing is we live in an era where being poor isn't as fucking horrible as it was in the past. While homeless I was able to have a smartphone, a laptop, and a couple of things of liquid nicotine. That's a sanity keeping pack right there. I don't care if the rich guy can order custom-made marbelized sculpted horse anuses, my quality of life as a homeless man was increased precisely because rich men were assholes enough to create products general and well-built enough for many environments. The problem of course is the almost never-ending stream of propoganda which tells people to eat sub-standard food and adopt sub-standard lifestyles. You stuff a population full of terrible diets, little personal physicality, and constant dopaminergic stimulation... Well I suppose if I were a rich man I'd be chuckling at the peons who are literally segregating themselves physically as a separate species. It'd make breeding and consolidation a bit easier if you could tell a peon visually by their body fat ratio.
  - mwfunk 10y ago
    If I were addicted to nicotine I wouldn't be quite so smug about people eating junk food.
    - LizardLarry 10y ago
      Nicotine is a lifesaver for people on the streets. The majority concern is over carcinogenic particulates that occur in certain delivery vehicles of nicotine (cigarettes). Getting cancer in the future is your least concern. Mitigating the anxiety, fear, and lonliness by using nicotine? That's far far higher up. That's the bigger priority in the timeframe of "being fucking homeless".
  - Shivetya 10y ago
    except I don't see how the NYTimes can bend these numbers to serve their party of choice. being poor in a developed country has rarely been bad and its hard for many to realize that is true. as for the price of meat the government intervention in grain pricing with regards to pushing ethanol and similar didn't help that. the rich can weather a bad storm better than the poor but only if they are properly diversified and not relying on the boom to keep them there
- deleted 10y ago
  [deleted]
- albertsun 10y ago
  GDP growth and income growth are not equivalent - for example, corporate profits that aren't distributed would count towards GDP but not towards individual incomes.
- alanwatts 10y ago
  GDP != quality of life or standard of living
- tuna-piano 10y ago
  One reason could be that they are using average household income - which is also affected by marriage rates.
- ionised 10y ago
  GDP is a piss poor way of measuring the prosperity of a nation across all of its people. It's heavily skewed towards the richest in society, and yet people keep harping on about GDP increases in all of these questionable free-trade agreements we keep hearing about. Increased GDP should not be a reason for adopting anything.
- PopsiclePete 10y ago
  GDP is a horrible measure of prosperity. If one giant corporation exchanged 2 trillion dollars with of goods with another giant corporation in some way, you'd see an uptick in GDP. Doesn't mean that 99.9999999999999% of people ever saw any change.
- anovikov 10y ago
  That especially looks incredible (if not outright impossible) that since 1990 to 2014, real GDP per capita in the U.S. has increased by 39.8%. And the chart somehow implies that average income remains approximately unchanged. There must be something distorting that chart, like: it is a chart of household income dynamics, and the average size of household has decreased.
readhn 10y ago
Rich getting richer and poor getting poorer. This is ultimately the goal of the modern capitalist system. We can talk all we want but we are all disposable material, unless we own the business we work for. How many people in this country ( middle class included) are 3-6 months away from being on the street if job suddenly disappeared?
- tuna-piano 10y ago
  A - The "capitalist system", much like evolution, does not have goals. Capitalism is just people trading with each other. The USA has had a similar system for hundreds of years, where the rich have gotten richer, but the poor have also gotten richer. So blaming capitalism itself is not a good answer. What has changed within capitalism to make the results from 1776 - 1990 different from 1990 - 2014? Either this is just a temporary decrease for the bottom percentiles, or there are other factors that have caused this shift (globalization, technology, government policies, personal choices, etc). B - Do you really want to own the business you work for? If you work at a chocolate factory, and own the chocolate factory - your entire livelyhood is tied to that chocolate factory. If the company goes under, you lose your job and your savings. Wouldn't you rather own bits and pieces of many other companies, to share in their success? But regardless, I believe your point is that it sucks not having savings / capital. Obviously true - but how do you propose people get savings / capital? Confiscate capital from the rich to give to the poor?
  - deleted 10y ago
    [deleted]
  - natrius 10y ago
    Capitalism is not just people trading with each other. We invented lots of legal fictions to get where we are today, and they're pretty effective. For instance, if you contribute your capital to a corporation, you'll be rewarded with an agreed upon portion of the corporations dividends. It looks like the company is rewarding you, but it's really society. We create and enforce rules like these—private property, limited liability, etc.—because they make us more prosperous. But they're artificial. They're not laws of nature. They can have flaws.
clavalle 10y ago
"In addition to wages, the census includes dividends, rental income and cash benefits (like Temporary Assistance for Needy Families and unemployment benefits). But it excludes noncash benefits like food stamps (which benefit the poor) and capital gains (which tend to benefit the rich)." This is really a strange way to look at it. It is comparing the 'rich' middle class to the rest of the middle class and ignoring the extremes. Whenever a great profit is being made, basic theory says that the market should work to push things back to normal. When that doesn't happen it is an indicator that something is off-kilter. So, what is off-kilter here? What occupations are at the tip of the elephant's trunk? Why aren't the people riding the elephant's back pushing into that part of the market? Is it an education problem? A capital allocation problem? Regulatory capture? This is the question that needs answering.
- rayiner 10y ago
  You're confusing two different things. Theories of markets say that in the long term competition will drive profits in any given industry to a nominal level. They don't say that the people who already have capital won't be able to use that capital to keep riding the wave of large profits in industries before they hit equilibrium.
  - clavalle 10y ago
    The only think I'm confused about is what 'long term' means. Seems like this has been trending since at least the 80's. How long does/should the wave of large profits last until we recognize it as a symptom of a problem?
    - rayiner 10y ago
      No theory of markets says that in the long term "profits" in general go to zero. Just profits in competitive industries. E.g. steel used to be very profitable. Not so much now. PCs used to be very profitable. Now profits in the PC industry are nominal. But there are always new industries that haven't hit that equilibrium yet.
  - 10y ago
tuna-piano 10y ago
Some other charts to explore this stuff. But man, economic statistics are hard - a lot of the fine print can really affect the results (household vs individual income, labor force participation, etc): Filter by years to see growth: http://stateofworkingamerica.org/who-gains/#/?start=1995&end=2008 http://stateofworkingamerica.org/who-gains/#/?start=1995&end... Job growth by job type: http://www.nytimes.com/interactive/2014/06/05/upshot/how-the-recession-reshaped-the-economy-in-255-charts.html http://www.nytimes.com/interactive/2014/06/05/upshot/how-the... Income by demographic: http://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html?ref=business http://www.nytimes.com/interactive/2015/01/25/upshot/shrinki... Percentile income distribution: http://blogs.wsj.com/economics/2016/07/01/the-99-got-a-raise-last-year-but-not-enough-to-dent-rising-inequality/ http://blogs.wsj.com/economics/2016/07/01/the-99-got-a-raise...
astazangasta 10y ago
Can we talk about what a fucking terrible visualization the elephant chart is? We often note how useless "fastest growing" is, because it is easy to get large changes when you have a small denominator. So income can grow worldwide for the bottom by 100% and only add a few dollars to their wealth. Meanwhile the top 1℅ might add 25% to their income at millions of dollars. This is a chart designed to make us feel good about poor people getting a pittance. Meanwhile the top 100 people in the world have more wealth than the bottom fifty percent. We need growth of tens of thousands of percent at the bottom for decades to move forward.
- vslira 10y ago
  Marginal utility of money decreases, which means these "pennies" at the hands of literally billions of poor make a whole world of difference to them. The American Middle Class has the right to be angry about their stagnation, but it's undeniable that the world is better for most people if you compare it to the 90's and early 00's.
  - astazangasta 10y ago
    However, my point is that those "pennies" could easily have been "dollars" instead at the cost of a fraction of the top of the income distribution, and this graph is celebrating "pennies" for the poor as a victory and masking millions or billions flowing to the wealthiest.
- Hondor 10y ago
  What harm is there in the richest people being richer? If they hoard their money, they're temporarily increasing the value of everyone else's. If they spend it, they're trickling it back down to the poor.
  - astazangasta 10y ago
    Easy: they appropriate a greater portion of humanity's productivity towards themselves. Wealth is power, the ability to express desire and recruit human effort to its fulfillment. When the rich have all the money, the poor cannot express their own desires and end up just working to satisfy the ends of the rich.
ap22213 10y ago
I find these type of posts on HN to be curious things. Clearly, there's lots of interest in the subject and desire to change things. And, most HN readers are highly educated and many are even high-income (i.e. have position to affect real change). But, I never see posts advertising ways to take real action. I love you guys, but making your cohorts know that you're aware and sympathetic of the cause only feels good. Let's see some posts that help organize and activate. Let's set some achievable, tangible goals and do something.
- plandis 10y ago
  I feel like I am educated and fairly high income (will clear $200k this year) but I honestly feel like I have no way to affect change. Contacting representatives yields nothing but form responses, protesting has had no real effect. Volunteer work and charitable donations are about all I seem to be able to do and that's not on any appreciable scale. I honestly feel like I have no way to cause anyone to make changes outside of voting. Which, to be honest even when I vote I feel like my voice is not heard.
- Bartweiss 10y ago
  I can appreciate the general sentiment, but at least for this post specifically I'm not sure I agree. The subtle aspects of these two charts are really interesting. Like, the only non-rich group to see income gains in the US is the ~15th percentile group? That's striking, and deserves some consideration. (At a guess, EITC and Clinton's work-for-benefits programs have helped the employed-near-minimum-wage cohort, but not the very poor.) The 2000-2014 numbers are similarly interesting - we see that the ~90th percentile (e.g. surgeons) was insulated from the crash better than the middle class or the very rich, but that the very rich have rebounded completely. So yes, signaling is different from actual action, but I'm filing this one under 'education'. For me at least, I'm interested more by the subtleties than by the basic restatement of "this is an issue".
protomyth 10y ago
"In North Dakota, in the heart of shale mining country, it made everyone richer." Well, mostly on the western side of the state, but that was the poorer side to begin with. It did make for some problems with some folks on fixed incomes.
Klockan 10y ago
Income inequality will continue to grow as technology lets us produce tremendous amounts of value with comparably small amounts of employees. Said value is often not accounted for in graphs like these so we can't really know if people are better off today than 20 years ago. I mean, would you rather live today with cheap internet, awesome computer and more free content on the internet than you can ever consume or would you want to live without those things with 10% higher inflation adjusted wage 20 years ago? I know what I would choose, hence I would say that the middle class has gained a lot. The nice things about those things is that they are wealth agnostic as well. Bill Gates doesn't have better internet than me, nor does he have a better personal computer, better youtube, better facebook, better internet search etc. All of those are extremely valuable and are spread evenly between almost everyone in the west.
dsfyu404ed 10y ago
Well, the glass half full is that California's drought will soon be fixed by the tears of everyone in SV who's upset that, despite all their, intelligence, big data and economic prodding by the government, the middle class in those "backwards, flyover states" did better. On a more serious note, the pattern I saw here was coastline = bad.
deleted 10y ago
[deleted]

90 points by martgnz 10y ago

If the per capita GDP of U.S. grew by 12.4%, how it happened that all classes of society were worse off in 2014 than in 2000? I don't trust that chart at all.

sprafa 10y ago
The growth of economic indexes is meaningless. The gains are going massively onto the people who already own capital. That's the engine of inequality. Also... You don't "trust" that chart? You can probably calculate it yourself if you want. That chart is data. If you have any reasonable arguments against the accuracy of that data Id love to hear it.
- yummyfajitas 10y ago
  Not trusting a chart because it's numbers seem to contradict other numbers is perfectly valid and reasonable. Your comment about gains going to people who own capital (who, incidentally, are primarily middle class homeowners) is not a refutation of it. In fact, it's completely irrelevant. A refutation would be explaining why GDP and income don't necessarily correlate, which is more a matter of accounting identities. Specifically, GDP != income, income is merely one component of it.
  - anovikov 10y ago
    Because income is still over 60% of GDP, GDP growing while income falls would mean a really dramatic growth of all other components. I can't see how it may be true.
    - deleted 10y ago
      [deleted]
  - antisthenes 10y ago
    The wage share in the United States has been consistently falling from ~64% to about 57% now. (as a % of GDP) It's quite easy to see that even if GDP grew 12% as someone else mentioned, the change from 64% to 57% would keep incomes at approximately the same level (and perhaps even slightly lower).
    - anovikov 10y ago
      Income is not just wage. Total personal income is about 80% of GDP and that figure doesn't change much over time.
      - dragonwriter 10y ago
        > Income is not just wage. Total personal income is about 80% of GDP Since personal income includes capital income, that's a useless figure when "wage" is being used as an (admittedly, imperfect) proxy for labor income as opposed to capital income, as the context upthread makes clear it was.
      - antisthenes 10y ago
        https://fred.stlouisfed.org/series/PRS84006173#0 https://fred.stlouisfed.org/series/PRS84006173#0 Wage share is an economically accepted term, with data from BLS behind it. You literally made up some number and said "it doesn't change much over time". You're going to need to provide a source for that 80%.
        anovikov 10y ago
        Easily. Personal income was 15737.7 billion in 2015 http://www.bea.gov/newsreleases/national/pi/2016/pdf/pi0716.pdf http://www.bea.gov/newsreleases/national/pi/2016/pdf/pi0716.... and GDP in current dollars was 18036.6 billion - http://www.bea.gov/national/xls/gdplev.xls http://www.bea.gov/national/xls/gdplev.xls, so 87.5% of GDP was income, and that figure has been pretty much constant over last 50 years, at never out of 75-90% range for sure. In fact, it is higher than average in the last 10 years or so - while difference is really small. Disposable income after all taxes and including all social transfers (excluding non-monetary ones like food stamps and assisted housing) was 69.5% of the GDP, also quite typical figure which shows to tendency to fall over time, more likely to rise. Surely that includes dividends, rents, and realized capital gains. And yet, it must have been reflected in the chart in question, if only in the top decile - while chart somehow shows incomes of all deciles falling from 2000, which is hard to believe.
- fumplethumb 10y ago
  > The gains are going massively onto the people who already own capital. That's the engine of inequality. This is a main point in Capital in the 21st Century by Thomas Piketty. He explains the capital/income ratio and its effects on the economy. Decent write up here: http://www.robertdkirkby.com/blog/2015/summary-of-piketty-i/ http://www.robertdkirkby.com/blog/2015/summary-of-piketty-i/
- throwanem 10y ago
  > That chart is data. No chart is ever data. A chart, like the result of an SQL query, is a projection via analysis. The analysis may be trivial, or it may not. You can hide a lot in non-trivial analysis if you want to. I don't say that the NYT did so here (and I don't say that it didn't), but it's hard to have any kind of productive discussion when something this basic is overlooked.
- anovikov 10y ago
  OK, so what? That is still income isn't it?
fumplethumb 10y ago
> If the per capita GDP of U.S. grew by 12.4% Where did you get that number? No way that's right. Here are the numbers from the Fed: https://fred.stlouisfed.org/series/A191RP1Q027SBEA https://fred.stlouisfed.org/series/A191RP1Q027SBEA Annual per capita GDP growth never exceeded 7% from 2000-2014.
- yummyfajitas 10y ago
  Wrong series. This is the right one: https://fred.stlouisfed.org/series/A939RX0Q048SBEA https://fred.stlouisfed.org/series/A939RX0Q048SBEA Real GDP/capita = $43,935 in Q1 2000, $50,549 in Q4 2014. That's 15% growth. Your own numbers don't disagree with this if you integrate them and divide by population.
  - fumplethumb 10y ago
    Ahh I see now. OP was talking cumulative growth, not annualized growth. Thanks!
wavefunction 10y ago
All the gains went to the richest in this country. The middle class in America shrank considerably following 2009.
deleted 10y ago
[deleted]
Bahamut 10y ago
Excepting the very rich is what the point of the article is I believe.
LizardLarry 10y ago
Numbers of this sort are usually fucking worthless because of the manipulation applied to them in accordance with political goals. Forget the government figures and look at the market. Sure you might make a buck more an hour but the price of meat has doubled (roughly) in the past five years. But the curious thing is we live in an era where being poor isn't as fucking horrible as it was in the past. While homeless I was able to have a smartphone, a laptop, and a couple of things of liquid nicotine. That's a sanity keeping pack right there. I don't care if the rich guy can order custom-made marbelized sculpted horse anuses, my quality of life as a homeless man was increased precisely because rich men were assholes enough to create products general and well-built enough for many environments. The problem of course is the almost never-ending stream of propoganda which tells people to eat sub-standard food and adopt sub-standard lifestyles. You stuff a population full of terrible diets, little personal physicality, and constant dopaminergic stimulation... Well I suppose if I were a rich man I'd be chuckling at the peons who are literally segregating themselves physically as a separate species. It'd make breeding and consolidation a bit easier if you could tell a peon visually by their body fat ratio.
- mwfunk 10y ago
  If I were addicted to nicotine I wouldn't be quite so smug about people eating junk food.
  - LizardLarry 10y ago
    Nicotine is a lifesaver for people on the streets. The majority concern is over carcinogenic particulates that occur in certain delivery vehicles of nicotine (cigarettes). Getting cancer in the future is your least concern. Mitigating the anxiety, fear, and lonliness by using nicotine? That's far far higher up. That's the bigger priority in the timeframe of "being fucking homeless".
- Shivetya 10y ago
  except I don't see how the NYTimes can bend these numbers to serve their party of choice. being poor in a developed country has rarely been bad and its hard for many to realize that is true. as for the price of meat the government intervention in grain pricing with regards to pushing ethanol and similar didn't help that. the rich can weather a bad storm better than the poor but only if they are properly diversified and not relying on the boom to keep them there
deleted 10y ago
[deleted]
albertsun 10y ago
GDP growth and income growth are not equivalent - for example, corporate profits that aren't distributed would count towards GDP but not towards individual incomes.
alanwatts 10y ago
GDP != quality of life or standard of living
tuna-piano 10y ago
One reason could be that they are using average household income - which is also affected by marriage rates.
ionised 10y ago
GDP is a piss poor way of measuring the prosperity of a nation across all of its people. It's heavily skewed towards the richest in society, and yet people keep harping on about GDP increases in all of these questionable free-trade agreements we keep hearing about. Increased GDP should not be a reason for adopting anything.
PopsiclePete 10y ago
GDP is a horrible measure of prosperity. If one giant corporation exchanged 2 trillion dollars with of goods with another giant corporation in some way, you'd see an uptick in GDP. Doesn't mean that 99.9999999999999% of people ever saw any change.
anovikov 10y ago
That especially looks incredible (if not outright impossible) that since 1990 to 2014, real GDP per capita in the U.S. has increased by 39.8%. And the chart somehow implies that average income remains approximately unchanged. There must be something distorting that chart, like: it is a chart of household income dynamics, and the average size of household has decreased.

readhn 10y ago

Rich getting richer and poor getting poorer. This is ultimately the goal of the modern capitalist system. We can talk all we want but we are all disposable material, unless we own the business we work for. How many people in this country ( middle class included) are 3-6 months away from being on the street if job suddenly disappeared?

tuna-piano 10y ago
A - The "capitalist system", much like evolution, does not have goals. Capitalism is just people trading with each other. The USA has had a similar system for hundreds of years, where the rich have gotten richer, but the poor have also gotten richer. So blaming capitalism itself is not a good answer. What has changed within capitalism to make the results from 1776 - 1990 different from 1990 - 2014? Either this is just a temporary decrease for the bottom percentiles, or there are other factors that have caused this shift (globalization, technology, government policies, personal choices, etc). B - Do you really want to own the business you work for? If you work at a chocolate factory, and own the chocolate factory - your entire livelyhood is tied to that chocolate factory. If the company goes under, you lose your job and your savings. Wouldn't you rather own bits and pieces of many other companies, to share in their success? But regardless, I believe your point is that it sucks not having savings / capital. Obviously true - but how do you propose people get savings / capital? Confiscate capital from the rich to give to the poor?
- deleted 10y ago
  [deleted]
- natrius 10y ago
  Capitalism is not just people trading with each other. We invented lots of legal fictions to get where we are today, and they're pretty effective. For instance, if you contribute your capital to a corporation, you'll be rewarded with an agreed upon portion of the corporations dividends. It looks like the company is rewarding you, but it's really society. We create and enforce rules like these—private property, limited liability, etc.—because they make us more prosperous. But they're artificial. They're not laws of nature. They can have flaws.

clavalle 10y ago

"In addition to wages, the census includes dividends, rental income and cash benefits (like Temporary Assistance for Needy Families and unemployment benefits). But it excludes noncash benefits like food stamps (which benefit the poor) and capital gains (which tend to benefit the rich)." This is really a strange way to look at it. It is comparing the 'rich' middle class to the rest of the middle class and ignoring the extremes. Whenever a great profit is being made, basic theory says that the market should work to push things back to normal. When that doesn't happen it is an indicator that something is off-kilter. So, what is off-kilter here? What occupations are at the tip of the elephant's trunk? Why aren't the people riding the elephant's back pushing into that part of the market? Is it an education problem? A capital allocation problem? Regulatory capture? This is the question that needs answering.

rayiner 10y ago
You're confusing two different things. Theories of markets say that in the long term competition will drive profits in any given industry to a nominal level. They don't say that the people who already have capital won't be able to use that capital to keep riding the wave of large profits in industries before they hit equilibrium.
- clavalle 10y ago
  The only think I'm confused about is what 'long term' means. Seems like this has been trending since at least the 80's. How long does/should the wave of large profits last until we recognize it as a symptom of a problem?
  - rayiner 10y ago
    No theory of markets says that in the long term "profits" in general go to zero. Just profits in competitive industries. E.g. steel used to be very profitable. Not so much now. PCs used to be very profitable. Now profits in the PC industry are nominal. But there are always new industries that haven't hit that equilibrium yet.
- 10y ago

tuna-piano 10y ago

Some other charts to explore this stuff. But man, economic statistics are hard - a lot of the fine print can really affect the results (household vs individual income, labor force participation, etc): Filter by years to see growth: http://stateofworkingamerica.org/who-gains/#/?start=1995&end=2008 http://stateofworkingamerica.org/who-gains/#/?start=1995&end... Job growth by job type: http://www.nytimes.com/interactive/2014/06/05/upshot/how-the-recession-reshaped-the-economy-in-255-charts.html http://www.nytimes.com/interactive/2014/06/05/upshot/how-the... Income by demographic: http://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html?ref=business http://www.nytimes.com/interactive/2015/01/25/upshot/shrinki... Percentile income distribution: http://blogs.wsj.com/economics/2016/07/01/the-99-got-a-raise-last-year-but-not-enough-to-dent-rising-inequality/ http://blogs.wsj.com/economics/2016/07/01/the-99-got-a-raise...

astazangasta 10y ago

Can we talk about what a fucking terrible visualization the elephant chart is? We often note how useless "fastest growing" is, because it is easy to get large changes when you have a small denominator. So income can grow worldwide for the bottom by 100% and only add a few dollars to their wealth. Meanwhile the top 1℅ might add 25% to their income at millions of dollars. This is a chart designed to make us feel good about poor people getting a pittance. Meanwhile the top 100 people in the world have more wealth than the bottom fifty percent. We need growth of tens of thousands of percent at the bottom for decades to move forward.

vslira 10y ago
Marginal utility of money decreases, which means these "pennies" at the hands of literally billions of poor make a whole world of difference to them. The American Middle Class has the right to be angry about their stagnation, but it's undeniable that the world is better for most people if you compare it to the 90's and early 00's.
- astazangasta 10y ago
  However, my point is that those "pennies" could easily have been "dollars" instead at the cost of a fraction of the top of the income distribution, and this graph is celebrating "pennies" for the poor as a victory and masking millions or billions flowing to the wealthiest.
Hondor 10y ago
What harm is there in the richest people being richer? If they hoard their money, they're temporarily increasing the value of everyone else's. If they spend it, they're trickling it back down to the poor.
- astazangasta 10y ago
  Easy: they appropriate a greater portion of humanity's productivity towards themselves. Wealth is power, the ability to express desire and recruit human effort to its fulfillment. When the rich have all the money, the poor cannot express their own desires and end up just working to satisfy the ends of the rich.

ap22213 10y ago

I find these type of posts on HN to be curious things. Clearly, there's lots of interest in the subject and desire to change things. And, most HN readers are highly educated and many are even high-income (i.e. have position to affect real change). But, I never see posts advertising ways to take real action. I love you guys, but making your cohorts know that you're aware and sympathetic of the cause only feels good. Let's see some posts that help organize and activate. Let's set some achievable, tangible goals and do something.

plandis 10y ago
I feel like I am educated and fairly high income (will clear $200k this year) but I honestly feel like I have no way to affect change. Contacting representatives yields nothing but form responses, protesting has had no real effect. Volunteer work and charitable donations are about all I seem to be able to do and that's not on any appreciable scale. I honestly feel like I have no way to cause anyone to make changes outside of voting. Which, to be honest even when I vote I feel like my voice is not heard.
Bartweiss 10y ago
I can appreciate the general sentiment, but at least for this post specifically I'm not sure I agree. The subtle aspects of these two charts are really interesting. Like, the only non-rich group to see income gains in the US is the ~15th percentile group? That's striking, and deserves some consideration. (At a guess, EITC and Clinton's work-for-benefits programs have helped the employed-near-minimum-wage cohort, but not the very poor.) The 2000-2014 numbers are similarly interesting - we see that the ~90th percentile (e.g. surgeons) was insulated from the crash better than the middle class or the very rich, but that the very rich have rebounded completely. So yes, signaling is different from actual action, but I'm filing this one under 'education'. For me at least, I'm interested more by the subtleties than by the basic restatement of "this is an issue".

protomyth 10y ago

"In North Dakota, in the heart of shale mining country, it made everyone richer." Well, mostly on the western side of the state, but that was the poorer side to begin with. It did make for some problems with some folks on fixed incomes.

Klockan 10y ago

Income inequality will continue to grow as technology lets us produce tremendous amounts of value with comparably small amounts of employees. Said value is often not accounted for in graphs like these so we can't really know if people are better off today than 20 years ago. I mean, would you rather live today with cheap internet, awesome computer and more free content on the internet than you can ever consume or would you want to live without those things with 10% higher inflation adjusted wage 20 years ago? I know what I would choose, hence I would say that the middle class has gained a lot. The nice things about those things is that they are wealth agnostic as well. Bill Gates doesn't have better internet than me, nor does he have a better personal computer, better youtube, better facebook, better internet search etc. All of those are extremely valuable and are spread evenly between almost everyone in the west.

dsfyu404ed 10y ago

Well, the glass half full is that California's drought will soon be fixed by the tears of everyone in SV who's upset that, despite all their, intelligence, big data and economic prodding by the government, the middle class in those "backwards, flyover states" did better. On a more serious note, the pattern I saw here was coastline = bad.

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