3 ms·

Does that help explain the changes in income distribution over time though?

PhantomGremlin 9y ago
The article does touch on a large part of the explanation. Ross Perot, running as a 3rd party Presidential candidate in 1992, called it the "giant sucking sound" of US jobs going to Mexico due of NAFTA.[1] Not long afterward, US trade with China drastically increased.[2] Then China was admitted into the WTO. And the rest, as they say, is history. The manufacturing jobs lost during this period of time were, for the most part, middle class. With the loss of manufacturing, we've seen growth in minimum wage service jobs and growth in highly paid knowledge jobs (e.g. HN type people). [1] https://en.wikipedia.org/wiki/Giant_sucking_sound https://en.wikipedia.org/wiki/Giant_sucking_sound [2] https://en.wikipedia.org/wiki/China_and_the_World_Trade_Organization#United_States_role https://en.wikipedia.org/wiki/China_and_the_World_Trade_Orga...
- djrogers 9y ago
  What you describe above would imply that everyone is falling out of the middle class rather than climbing up out of it - the data doesn't back that up though. FTA: "In inflation-adjusted dollars, the share of U.S. households making $100,000 or more has more than tripled between 1967 and 2017, from 8% to 26%, according to U.S. Census data, while the percentage of middle income ($35,000 to $100,000 a year) has fallen. However, lower income U.S. households ($35,000 or less per year) have only slightly fallen over the last four decades."
  - PhantomGremlin 9y ago
    I checked a little further. Your point is valid, but the data you quote from the article isn't granular enough to demonstrate it very clearly. I found a chart on the interwebs that illustrates the point a little better. Check out the 2nd chart on this page, the chart titled "Real (Inflation adjusted) Average Household Income": https://www.advisorperspectives.com/dshort/updates/2016/09/15/u-s-household-incomes-a-49-year-perspective https://www.advisorperspectives.com/dshort/updates/2016/09/1... What is shows is the bottom three quintiles have been stagnant in terms of income. Most of the growth has occurred in the top quintile and especially in the top 5%.

The article does touch on a large part of the explanation. Ross Perot, running as a 3rd party Presidential candidate in 1992, called it the "giant sucking sound" of US jobs going to Mexico due of NAFTA.[1] Not long afterward, US trade with China drastically increased.[2] Then China was admitted into the WTO. And the rest, as they say, is history. The manufacturing jobs lost during this period of time were, for the most part, middle class. With the loss of manufacturing, we've seen growth in minimum wage service jobs and growth in highly paid knowledge jobs (e.g. HN type people). [1] https://en.wikipedia.org/wiki/Giant_sucking_sound https://en.wikipedia.org/wiki/Giant_sucking_sound [2] https://en.wikipedia.org/wiki/China_and_the_World_Trade_Organization#United_States_role https://en.wikipedia.org/wiki/China_and_the_World_Trade_Orga...

djrogers 9y ago
What you describe above would imply that everyone is falling out of the middle class rather than climbing up out of it - the data doesn't back that up though. FTA: "In inflation-adjusted dollars, the share of U.S. households making $100,000 or more has more than tripled between 1967 and 2017, from 8% to 26%, according to U.S. Census data, while the percentage of middle income ($35,000 to $100,000 a year) has fallen. However, lower income U.S. households ($35,000 or less per year) have only slightly fallen over the last four decades."
- PhantomGremlin 9y ago
  I checked a little further. Your point is valid, but the data you quote from the article isn't granular enough to demonstrate it very clearly. I found a chart on the interwebs that illustrates the point a little better. Check out the 2nd chart on this page, the chart titled "Real (Inflation adjusted) Average Household Income": https://www.advisorperspectives.com/dshort/updates/2016/09/15/u-s-household-incomes-a-49-year-perspective https://www.advisorperspectives.com/dshort/updates/2016/09/1... What is shows is the bottom three quintiles have been stagnant in terms of income. Most of the growth has occurred in the top quintile and especially in the top 5%.