7 ms·

Income for the top 1% of the population is up over 400% over the past 30 years, while remaining largely flat for the rest of the workforce. The tech boom is wel

Income for the top 1% of the population is up over 400% over the past 30 years, while remaining largely flat for the rest of the workforce. The tech boom is well underway, it's just that only a tiny fraction of the population is capturing the vast majority of the benefits. The boom is not just about efficiencies, it's also about centralization and winner-take-all market dynamics.

11thEarlOfMar 9y ago
Global absolute poverty has plummeted from 40% in 1985 to less than 10% in 2015: https://ourworldindata.org/slides/world-poverty/#/declining-world-poverty-1820-2015-step2 https://ourworldindata.org/slides/world-poverty/#/declining-...
- yomly 9y ago
  I see this fact touted around a lot, often in the context of stagnating/eroding wages. It 100% goes without saying that global poverty decreasing is cause for celebration, but eroding quality of life for a economic bracket of people should not be ignored. If you look at both facts together however (global poverty is down, wealth has concentrated at the top) then it would suggest that the wealth of the non-wealthy has merely been redistributed. Indeed, this is intuitive if you consider the trend of moving your labour to a cheaper country. Having travelled to many developing nations, it also (admittedly anecdotally) feels evident that most the wealth reaching developing nations is concentrating with the already wealthy / those in power. So what it feels to me is like that local inequality is increasing while global inequality is decreasing - the rich are getting richer everywhere while the working and middle classes are slowly converging everywhere. Unfortunately, as history has so far told, the notion that the erosion of the quality of life has led to improvements of life to someone very far away is a hard sell.
  - prostoalex 9y ago
    The wages are a proxy for buying power. Starting at the bottom of the Maslow’s pyramid and moving up, do today’s wages buy less of food, shelter, water, clothing, transportation, etc. than someone receiving wages 30/50/100/200 years ago?
    - observation 9y ago
      Wages really do buy less house than 100 years ago. This would have been about 1920 when the Sears kit houses were invented. Look at this: http://eastsidehill.com/news/wp-content/uploads/2010/04/1927_p13049a-p13049b.jpg http://eastsidehill.com/news/wp-content/uploads/2010/04/1927... The inflation calculator here: 32,424.83 in today's dollars for a respectable, quality 8 room house. Sure it doesn't include land or labour but there's no way an 8 room house costs 32k today. Today that would buy you a Tiny House on the low end of that market. In my opinion, and I know we are far richer than our great-grandparents, but anybody arguing we're quantitatively richer than our parents has a long row to hoe. If this is progress it sure is lumpy. As Peter Thiel says the most likely explanation is we've had an nearly completely unacknowledged (by Western intelligentsia) stagnation technologically.
      - gnicholas 9y ago
        > Tyler Cowen points out that there's not a single thing in your list of kitchen appliances that didn't exist in the 50s. People have highly temporally displaced notions, believing that things like washing machines or dishwashers are recent mass consumer items but they're not, they're nearly a century old. Economists know that GDP measures are skewed by the fact that “a car is not a car” — that is, a new car today is much more than a new car from 30 years ago. It is safer and more comfortable, and consumers who pay the same amount in real dollars for a new car today are better off than consumers who bought a new car in years past. So the “house” from the Sears catalog isn’t likely comparable to a house today with the same number of rooms. For example, the size of bedrooms, bathrooms, kitchens, closets, and garages has increased greatly in the last 100 years. New homes are more energy efficient and have safer wiring. Does this close the gap with a $32k house? Not in Silicon Valley, but there are parts of the country where the house (excluding the land, which Sears didn’t include either) is worth around $50k.
        EliRivers 9y ago
        For example, the size of bedrooms, bathrooms, kitchens, closets, and garages has increased greatly in the last 100 years. Have you been to the UK recently? :) I don't know how much of an increase there was from about a century ago, but for the last few decades it's very much been going the other way. But the UK is something of a basket case when it comes to housing; people want to spend all their money on a mortgage. Tangentially related, not long ago a minister suggested that people could keep a "jerry can" or petrol in their garage and was roundly mocked not only for the fire hazard, but for the casual belief that everyone has a garage.
  - pm90 9y ago
    I don't think we have seen anything like this in history before, and it will be interesting, to say the least, at how all the millions of people elevated from destitution will contribute to the world and change it.
    - atomi 9y ago
      "You can't hold the tide with a broom."
    - vannevar 9y ago
      Don't get too excited. The chart only shows that fewer people fall below the $2/day line. They could all be living on $2.01/day now and it would still be valid.
- QAPereo 9y ago
  When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out... once our edge in natural resources has been made irrelevant... once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity...
- vannevar 9y ago
  Great news, for sure. But was that a result of the tech boom, or government policies? I'm betting on the latter. And the fact that the lowest rungs of the economic ladder aren't fixed in an absolute sense doesn't change the fact that an increasingly enormous share of the wealth produced by humanity globally is going to just 1% of the population.
- jressey 9y ago
  What is your assertion? Let me help: "The accumulation of wealth amongst the top % is cool because the ratio of absolute poverty has decreased." I mean, that's awesome. The problem is just about everybody else is moving downwards.
- PatchMonkey 9y ago
  Meanwhile, when poverty numbers are both a mark of shame for a country and fail to keep pace with the inflation of either consumer goods or housing? We have a growing population of homeless folks too "rich" for public assistance. A lot of them already have jobs: https://mobile.nytimes.com/2013/09/18/nyregion/in-new-york-having-a-job-or-2-doesnt-mean-having-a-home.html https://mobile.nytimes.com/2013/09/18/nyregion/in-new-york-h... And it has only gotten worse since that was published. The Hoovervilles that showed up before the great depression are back: https://www.theguardian.com/us-news/2017/dec/05/america-homeless-population-2017-official-count-crisis https://www.theguardian.com/us-news/2017/dec/05/america-home... Dude, you have to either be drowning in kids or make nothing to fall under the official poverty line. But what catches people's eyes is the rise of those officially falling below that line. https://www.theguardian.com/society/2017/dec/15/america-extreme-poverty-un-special-rapporteur https://www.theguardian.com/society/2017/dec/15/america-extr...
maxxxxx 9y ago
The money will soon start to trickle down from the top 1% especially with the latest tax cuts. Be patient just a little more.
- saas_co_de 9y ago
  Money does trickle down but what it trickles down onto is a determining factor in economic growth. When rich people put their money into employing people for non-productive servant type jobs, welfare for people (to not work), loans for people to go to college (to not work, at least in the short term), hand outs for their children and family members (to not work) then the end result is a lot of people not working and a lot fewer things being produced by the people who do work. If a rich person buys a yacht or a private plane or a hundred million dollar mansion, that creates economic activity (people have to build that stuff) but it does not have the same secondary economic impact as investing that money into a factory, basic infrastructure, R&D, or some other productive use. Money is trickling down, but far too much of it seems to be trickling down to a non-productive servant class and non-productive veblen goods.
  - deleted 9y ago
    [deleted]
- DougWebb 9y ago
  Sarcastic, or do you have some reason to believe that'll actually happen this time?
  - pm90 9y ago
    It will NOT happen. It has never happened that way, and there is nothing especially unique or different about the economy today that would make it happen.
  - 0xdeadbeefbabe 9y ago
    Comrade maxxx is secretly hoping you don't want to be patient.
  - 9y ago
at-fates-hands 9y ago
There were 500,000 new millionaires in the US alone in 2015: The study, from market research and consulting firm Spectrem Group, found that there are now 10.1 million households in the U.S. with $1 million or more in investable assets, excluding the value of their primary residence. That's up from about 9.6 million in 2013, and tops the prerecession peak of 9.2 million in 2007. It's the highest number since Spectrem began tracking the data in 1997. If we cranking out half a million new millionaires a year, it should be sign more people are working to get into the top 1%, and the economy is still offering a ton of opportunity if you want to get out there and give it a go.
- drdrey 9y ago
  > more people are working to get into the top 1% I don't think that's how the top 1% works
  - idrios 9y ago
    He's not wrong. In 2010 there were 6.93 billion people in the world. In 2015 there were 7.35 billion. By that calculation, 4.2 million people moved into the top 1% in the span of just 5 years!
- lostlogin 9y ago
  I hope that’s inflation adjusted. A 1997 millionaire was an awful lot wealthier than a 2017 millionaire. It will be something around 50% inflation. If someone is a millionaire now that can simply mean they live in a moderate sized city and own their house, there are no Scrooge McDuck cash piles.
decebalus1 9y ago
I'm waiting for the common folks to start hoarding money too and decrease consumption. Ford figured this problem out at the start of the 20th century but apparently everyone forgot about it (if my employees aren't well off enough to buy my product, I'm screwed). I personally believe that what we're going through right now isn't going to scale and it will collapse. It's probably one of the very few times in agree with Ron Paul: https://www.inquisitr.com/4704540/ron-paul-we-are-on-the-verge-of-something-like-what-happened-in-89-when-the-soviet-system-just-collapsed/ https://www.inquisitr.com/4704540/ron-paul-we-are-on-the-ver...
- prostoalex 9y ago
  Ford’s assembly line required higher investment in worker training, so churn was more expensive for Ford than other autoworkers. Ford employees did not represent a major buying market for the company and did not own vehicles in higher proportion when compared to the rest of the population. If we decide that we want to encourage companies whose final products workers can afford and discourage companes whose final products are unaffordable, we desperately need more manufacturers of pencils, plastic bags or napkins (single month’s salary buys one a lifetime supply) and need fewer companies like Boeing or SpaceX (even after a 100 year career the workers cannot afford the final product).
  - existencebox 9y ago
    Although this wasn't your primary statement, wanted to take a bite out of your second clause about "encouraging cheaper product companies" as this is a point close to my heart as a regular advocate for consumer demand driven economics. Boeing or Spacex's product demand is driven directly by transitive demand for an affordable product; air travel and to give one "space" example; gps, are both "consumer tier" products that facilitate a whole vertical of production. I'm hard pressed to think of a single super-expensive item that doesn't in some way link back to consumer demand; outside of additional injections via nations. To me this seems intuitive; as I'm hard pressed to think of another driver of production with comparable volume, and as such don't see any reason increasing that source of demand would bias "cheap" products any more than they are now.
- 9y ago

11thEarlOfMar 9y ago

Global absolute poverty has plummeted from 40% in 1985 to less than 10% in 2015: https://ourworldindata.org/slides/world-poverty/#/declining-world-poverty-1820-2015-step2 https://ourworldindata.org/slides/world-poverty/#/declining-...

yomly 9y ago
I see this fact touted around a lot, often in the context of stagnating/eroding wages. It 100% goes without saying that global poverty decreasing is cause for celebration, but eroding quality of life for a economic bracket of people should not be ignored. If you look at both facts together however (global poverty is down, wealth has concentrated at the top) then it would suggest that the wealth of the non-wealthy has merely been redistributed. Indeed, this is intuitive if you consider the trend of moving your labour to a cheaper country. Having travelled to many developing nations, it also (admittedly anecdotally) feels evident that most the wealth reaching developing nations is concentrating with the already wealthy / those in power. So what it feels to me is like that local inequality is increasing while global inequality is decreasing - the rich are getting richer everywhere while the working and middle classes are slowly converging everywhere. Unfortunately, as history has so far told, the notion that the erosion of the quality of life has led to improvements of life to someone very far away is a hard sell.
- prostoalex 9y ago
  The wages are a proxy for buying power. Starting at the bottom of the Maslow’s pyramid and moving up, do today’s wages buy less of food, shelter, water, clothing, transportation, etc. than someone receiving wages 30/50/100/200 years ago?
  - observation 9y ago
    Wages really do buy less house than 100 years ago. This would have been about 1920 when the Sears kit houses were invented. Look at this: http://eastsidehill.com/news/wp-content/uploads/2010/04/1927_p13049a-p13049b.jpg http://eastsidehill.com/news/wp-content/uploads/2010/04/1927... The inflation calculator here: 32,424.83 in today's dollars for a respectable, quality 8 room house. Sure it doesn't include land or labour but there's no way an 8 room house costs 32k today. Today that would buy you a Tiny House on the low end of that market. In my opinion, and I know we are far richer than our great-grandparents, but anybody arguing we're quantitatively richer than our parents has a long row to hoe. If this is progress it sure is lumpy. As Peter Thiel says the most likely explanation is we've had an nearly completely unacknowledged (by Western intelligentsia) stagnation technologically.
    - gnicholas 9y ago
      > Tyler Cowen points out that there's not a single thing in your list of kitchen appliances that didn't exist in the 50s. People have highly temporally displaced notions, believing that things like washing machines or dishwashers are recent mass consumer items but they're not, they're nearly a century old. Economists know that GDP measures are skewed by the fact that “a car is not a car” — that is, a new car today is much more than a new car from 30 years ago. It is safer and more comfortable, and consumers who pay the same amount in real dollars for a new car today are better off than consumers who bought a new car in years past. So the “house” from the Sears catalog isn’t likely comparable to a house today with the same number of rooms. For example, the size of bedrooms, bathrooms, kitchens, closets, and garages has increased greatly in the last 100 years. New homes are more energy efficient and have safer wiring. Does this close the gap with a $32k house? Not in Silicon Valley, but there are parts of the country where the house (excluding the land, which Sears didn’t include either) is worth around $50k.
      - EliRivers 9y ago
        For example, the size of bedrooms, bathrooms, kitchens, closets, and garages has increased greatly in the last 100 years. Have you been to the UK recently? :) I don't know how much of an increase there was from about a century ago, but for the last few decades it's very much been going the other way. But the UK is something of a basket case when it comes to housing; people want to spend all their money on a mortgage. Tangentially related, not long ago a minister suggested that people could keep a "jerry can" or petrol in their garage and was roundly mocked not only for the fire hazard, but for the casual belief that everyone has a garage.
- pm90 9y ago
  I don't think we have seen anything like this in history before, and it will be interesting, to say the least, at how all the millions of people elevated from destitution will contribute to the world and change it.
  - atomi 9y ago
    "You can't hold the tide with a broom."
  - vannevar 9y ago
    Don't get too excited. The chart only shows that fewer people fall below the $2/day line. They could all be living on $2.01/day now and it would still be valid.
QAPereo 9y ago
When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out... once our edge in natural resources has been made irrelevant... once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity...
vannevar 9y ago
Great news, for sure. But was that a result of the tech boom, or government policies? I'm betting on the latter. And the fact that the lowest rungs of the economic ladder aren't fixed in an absolute sense doesn't change the fact that an increasingly enormous share of the wealth produced by humanity globally is going to just 1% of the population.
jressey 9y ago
What is your assertion? Let me help: "The accumulation of wealth amongst the top % is cool because the ratio of absolute poverty has decreased." I mean, that's awesome. The problem is just about everybody else is moving downwards.
PatchMonkey 9y ago
Meanwhile, when poverty numbers are both a mark of shame for a country and fail to keep pace with the inflation of either consumer goods or housing? We have a growing population of homeless folks too "rich" for public assistance. A lot of them already have jobs: https://mobile.nytimes.com/2013/09/18/nyregion/in-new-york-having-a-job-or-2-doesnt-mean-having-a-home.html https://mobile.nytimes.com/2013/09/18/nyregion/in-new-york-h... And it has only gotten worse since that was published. The Hoovervilles that showed up before the great depression are back: https://www.theguardian.com/us-news/2017/dec/05/america-homeless-population-2017-official-count-crisis https://www.theguardian.com/us-news/2017/dec/05/america-home... Dude, you have to either be drowning in kids or make nothing to fall under the official poverty line. But what catches people's eyes is the rise of those officially falling below that line. https://www.theguardian.com/society/2017/dec/15/america-extreme-poverty-un-special-rapporteur https://www.theguardian.com/society/2017/dec/15/america-extr...

maxxxxx 9y ago

The money will soon start to trickle down from the top 1% especially with the latest tax cuts. Be patient just a little more.

saas_co_de 9y ago
Money does trickle down but what it trickles down onto is a determining factor in economic growth. When rich people put their money into employing people for non-productive servant type jobs, welfare for people (to not work), loans for people to go to college (to not work, at least in the short term), hand outs for their children and family members (to not work) then the end result is a lot of people not working and a lot fewer things being produced by the people who do work. If a rich person buys a yacht or a private plane or a hundred million dollar mansion, that creates economic activity (people have to build that stuff) but it does not have the same secondary economic impact as investing that money into a factory, basic infrastructure, R&D, or some other productive use. Money is trickling down, but far too much of it seems to be trickling down to a non-productive servant class and non-productive veblen goods.
- deleted 9y ago
  [deleted]
DougWebb 9y ago
Sarcastic, or do you have some reason to believe that'll actually happen this time?
- pm90 9y ago
  It will NOT happen. It has never happened that way, and there is nothing especially unique or different about the economy today that would make it happen.
- 0xdeadbeefbabe 9y ago
  Comrade maxxx is secretly hoping you don't want to be patient.
- 9y ago

at-fates-hands 9y ago

There were 500,000 new millionaires in the US alone in 2015: The study, from market research and consulting firm Spectrem Group, found that there are now 10.1 million households in the U.S. with $1 million or more in investable assets, excluding the value of their primary residence. That's up from about 9.6 million in 2013, and tops the prerecession peak of 9.2 million in 2007. It's the highest number since Spectrem began tracking the data in 1997. If we cranking out half a million new millionaires a year, it should be sign more people are working to get into the top 1%, and the economy is still offering a ton of opportunity if you want to get out there and give it a go.

drdrey 9y ago
> more people are working to get into the top 1% I don't think that's how the top 1% works
- idrios 9y ago
  He's not wrong. In 2010 there were 6.93 billion people in the world. In 2015 there were 7.35 billion. By that calculation, 4.2 million people moved into the top 1% in the span of just 5 years!
lostlogin 9y ago
I hope that’s inflation adjusted. A 1997 millionaire was an awful lot wealthier than a 2017 millionaire. It will be something around 50% inflation. If someone is a millionaire now that can simply mean they live in a moderate sized city and own their house, there are no Scrooge McDuck cash piles.

decebalus1 9y ago

I'm waiting for the common folks to start hoarding money too and decrease consumption. Ford figured this problem out at the start of the 20th century but apparently everyone forgot about it (if my employees aren't well off enough to buy my product, I'm screwed). I personally believe that what we're going through right now isn't going to scale and it will collapse. It's probably one of the very few times in agree with Ron Paul: https://www.inquisitr.com/4704540/ron-paul-we-are-on-the-verge-of-something-like-what-happened-in-89-when-the-soviet-system-just-collapsed/ https://www.inquisitr.com/4704540/ron-paul-we-are-on-the-ver...

prostoalex 9y ago
Ford’s assembly line required higher investment in worker training, so churn was more expensive for Ford than other autoworkers. Ford employees did not represent a major buying market for the company and did not own vehicles in higher proportion when compared to the rest of the population. If we decide that we want to encourage companies whose final products workers can afford and discourage companes whose final products are unaffordable, we desperately need more manufacturers of pencils, plastic bags or napkins (single month’s salary buys one a lifetime supply) and need fewer companies like Boeing or SpaceX (even after a 100 year career the workers cannot afford the final product).
- existencebox 9y ago
  Although this wasn't your primary statement, wanted to take a bite out of your second clause about "encouraging cheaper product companies" as this is a point close to my heart as a regular advocate for consumer demand driven economics. Boeing or Spacex's product demand is driven directly by transitive demand for an affordable product; air travel and to give one "space" example; gps, are both "consumer tier" products that facilitate a whole vertical of production. I'm hard pressed to think of a single super-expensive item that doesn't in some way link back to consumer demand; outside of additional injections via nations. To me this seems intuitive; as I'm hard pressed to think of another driver of production with comparable volume, and as such don't see any reason increasing that source of demand would bias "cheap" products any more than they are now.
9y ago