7 ms·

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.

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.