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Income Inequality (2016)
- amai 9y agoIsn't wealth inequality much more important? https://en.wikipedia.org/wiki/Distribution_of_wealth https://en.wikipedia.org/wiki/Distribution_of_wealth
- ggg9990 9y agoWhile observing this run-up in income inequality and the unwillingness of the rich to do anything about it, I’ve concluded that we haven’t really learned anything and are going to have a French Revolution or Russian Revolution style “shoot them in the streets” event.
- throwaway1748 9y agoIf anything, I think the rich in Silicon Valley are the most willing to do something about it. Basic Income is a very popular idea amongst left-leaning wealthy people these days
- ggg9990 9y agoBasic income is probably not going to do the trick.
- tjr225 9y agoInteresting, the graphs confirm the rapid increase in income inequality here in America. Amazing how history repeats itself.
- aramadia 9y agoThis seems to focus on pre and post tax inequality of outcomes at a specific moment in time. The more interesting data would measure how fluid are the populations of income deciles between generations or even within a single lifespan.
- frgtpsswrdlame 9y ago>The more interesting data would measure how fluid are the populations of income deciles between generations or even within a single lifespan. Even that wouldn't be too interesting to me. What if the society we live in just distributes a lot of income on the basis of luck? We would appear to be a highly fluid society but from the perspective of any individual there would still be little you could do to advance. Some really interesting data would be to take a child's income across life and regress it by some of the luckiest things you can have, parental income level / parent hours spent reading to child before 8 years old / attendance of pre-k / quality of child's high school. Then we could see not just fluidity but independent effortful movement in the economy.
- darpa_escapee 9y agoMaybe this graph[1] is what you're looking for? It's not income deciles, but quintiles. [1] https://itdoesnotaddup.files.wordpress.com/2015/06/capture5.png https://itdoesnotaddup.files.wordpress.com/2015/06/capture5....
- rosser 9y agoInteresting: nominally more of the bottom quintile both stay in that quintile, and make it to the top quintile, than stay in the top, and drop to the bottom. bottom -> bottom: 41% top -> top: 40% bottom -> top: 9% top -> bottom: 8% I guess that's kind of evidence for mobility? From the shapes of the other bands, coming from money still massively biases for ending up with it, and not coming from it against.
- alextheparrot 9y agoBrooks did an interesting study on this, check Page 5 [0]. The answer is that there is a lot of mobility, but your parent’s income status definitely seems to be correlated with their child’s income status. That isn’t to say it is causative, maybe people who grew up in high cost of living areas just stay in them, where incomes are higher to accommodate. [0] https://www.brookings.edu/wp-content/uploads/2016/07/02_economic_mobility_sawhill_ch8.pdf https://www.brookings.edu/wp-content/uploads/2016/07/02_econ...
- dulse 9y agoI see this as one of the most fundamental problems the next generation will need to face. How do we build better models to give access to wealth creation outside a small number of highly leveraged technology companies to a wider group of society? Recent trends in the gig economy, AI, and medicine make me worry more we are slipping toward a super asymmetrical world like Gattica or Altered Carbon -- which is not the world we should want to live in. We should want to preserve a strong path to the American middle class for everyone. Despite the hype, I'm bullish on cryptocurrency tokens on potentially being a model of a more equitable design for firm returns. If done correctly, the returns of firms could go to the early participants in the network, instead of the VCs and early accredited investors that have special access. The ICO world today isn't there yet (a lot of pre-sale discount tokens to those privileged VCs; lots of ICOs aimed at the larger public are scams, and it's hard to tell the difference between them) but I think we have the tools to create more equitable models, if we only have the will.
- nerfhammer 9y agoisn't that what the 1999 dot-com bubble was? firms could go public almost right out of the gate and then Joe Average investors could buy and sell equity of these immature firms?
- montrose 9y agoYes. And the wildly varying returns achieved by these retail investors surely increased rather than decreased economic inequality.
- bargl 9y agoIt would be nice if there was a VC that could operate like the stock market was supposed to. You invest in the VC and you get a share out. But that share can be really really small. 100$ or less. And you get an ROI. I've thought about that before but I have no clue how or what shape that would take with my limited knowledge of the legality behind VC funding.
- theseatoms 9y ago
- LarryDarrell 9y agoIncome inequality doesn't bother me as much as inherited wealth.
- snakeboy 9y agoCan you elaborate? Do you mean the advantages given to the benefactors of inherited wealth cause society to suffer?
- k__ 9y agoit leads to longer accumulation. Money that isn't available for the rest of society.
- aantix 9y ago70% of Rich Families Lose Their Wealth by the Second Generation http://time.com/money/3925308/rich-families-lose-wealth/ http://time.com/money/3925308/rich-families-lose-wealth/
- frgtpsswrdlame 9y agoI really looked for some sort of background on that number and wasn't able to find it. I'm a bit suspicious since it's being put out by an estate planning and investment company. What even constitutes 'losing the wealth'? Family Wealth Lasts For Ten To Fifteen Generations https://newrepublic.com/article/116462/family-wealth-lasts-ten-fifteen-generations https://newrepublic.com/article/116462/family-wealth-lasts-t...
- ryandrake 9y agoProbably highly dependent on the definition of Rich Families. I would guess that that number is far lower the more money we are talking about. No way that an inherited fortune of $10B is squandered at the same frequency as an inherited fortune of $10M.
- 9y ago
- nabla9 9y agoThe Economist has good overview of how inequality affects growth: https://www.economist.com/blogs/economist-explains/2015/06/economist-explains-11 https://www.economist.com/blogs/economist-explains/2015/06/e... Particularly interesting is the "savings glut" argument. Rich are spending smaller part of their income. As a result, income equality leads to situation where income flows into investments or property values and demand starts to decrease after a while, leading to smaller return for the investments.
- strong_silent_t 9y agoIn particular I think China will have a problem with this: https://data.worldbank.org/indicator/NE.CON.PETC.ZS?end=2016&locations=US-CN-DE-JP-BR-NO&start=1984&view=chart&year_high_desc=false https://data.worldbank.org/indicator/NE.CON.PETC.ZS?end=2016... (included some other countries to compare, Saudi Arabia is also an interesting one but it messes up the graph.)
- jopsen 9y agoThere is correlation, but this entry says: > Indeed, the empirical literature on the causal effect of inequality on economic growth is largely inconclusive. It's tempting to think that income inequality drives demand down and causes less economic growth. I would actually agree, yet the scientific evidence might be missing. IMO, we should put limits in inequality, not because of what we think it might do to the economy, but because it's the decent thing to do! Because we're nice human beings :)
- maxxxxx 9y ago"IMO, we should put limits in inequality, not because of what we think it might do to the economy, but because it's the decent thing to do! " Agreed! In the end it's a question of values.
- jopsen 9y agoWriting another comment I realized I used the term "decent", because these values sits very deep in me that it was just feeling. Reflecting on that I suspect the thing I really want is to: maximize happiness in the universe. (no more, no less)
- martin1975 9y agoDisclosing the CEO-to-median-pay-ratio ought to help with investment decisions into companies. It is in effect as of this year. https://www.sec.gov/news/pressrelease/2015-160.html https://www.sec.gov/news/pressrelease/2015-160.html
- ousta 9y agoout of curiosity what is the dataviz lib they using?
- strong_silent_t 9y agoThis may be what you're looking for: https://github.com/owid/owid-grapher https://github.com/owid/owid-grapher
- gHosts 9y agoWas my searching no good... or have they completely failed to read or address the panama papers and any of the subsequent leaks?
- aje403 9y agoWhy are they placing the US next to Mexico on a chart of "children living in poverty" and using the world "relative" to disguise that
- maxerickson 9y agoThey aren't disguising anything, the measure they are showing is plainly described. If the article were about poverty it might be problematic to show relative poverty, but it's about comparing income inequality across nations.
- aje403 9y agoOh now I get it, what an excellent metric devoid of bias, not meant to deceptively grab attention, can we put Kenya on the graph too to show how much less income inequality and poverty their children are subjected to relative to the US?
- maxerickson 9y agoIt's below the fold on a page devoted to a wonkish discussion of an issue. It isn't grabbing any attention. Maybe you think they should have just left the US out of the article or something? To me you are asking for a bizarre form of spoon feeding, where an in depth article has to carefully guard against misinterpretation by a disinterested audience.
- aje403 9y agoI don't think the US belongs next to Mexico on a chart titled Child Poverty. Considering the 3rd highest upvoted comment on this thread is describing how cryptocurrency is going to save the American middle class, I don't have much faith in audiences and I believe the onus is on the author to present the material properly.
- moduspol 9y agoI know it's tougher to measure, but I'd rather see some in-depth measurement on how much better of a lifestyle the same wealth provides over time. And with that, how much that lifestyle is improving at different income levels. The promise of a capitalist society isn't that it will bring income equality--it's better products and services at better prices. Someone having more zeroes in their bank account than me is irrelevant if my lifestyle is improving faster than theirs. Again, though, I know it's tougher to measure.
- jpao79 9y agoAlong those lines, while I don't necessarily agree with everything he says, John Haidt has some interesting thoughts on how to improve capitalism to better benefit society. Jonathan Haidt, NYU Stern School of Business: Three Stories About Capitalism. At the 2014 WORLD.MINDS Annual Symposium https://www.youtube.com/watch?v=iOu_8yoqZoQ https://www.youtube.com/watch?v=iOu_8yoqZoQ If you want to skip some of the intro: https://www.youtube.com/watch?v=iOu_8yoqZoQ?t=735 https://www.youtube.com/watch?v=iOu_8yoqZoQ?t=735 TLDR: Capitalism has been on the whole good at getting people out of poverty, but keep Capitalism honest via self-regulation as much as possible (such as via Environment, Social and Governance metrics) because it can be exploitive.
- alehul 9y agoAgree entirely with this! Capitalism's benefit in my opinion is far from equality. People view 'inequality' as a problem, but I'd say to be more accurate, poverty is the problem while equality seems like an easy solution.
- jopsen 9y agoTHe best part of that entry was: > This means that inequality is most likely not inevitable. Gives me hope for the future. Inequality can indeed be reigned in with policy.
- thebigspacefuck 9y agoWhat's intrinsically wrong with inequality?
- andrepd 9y agoPlenty. Inequality of power, inequality of influence, inequality of opportunities, inequality of access to education, housing, healthcare. All of that is wrong, and can be corrected.
- nybble41 9y agoThe topic was inequality of wealth and/or income. What is intrinsically wrong with that? People make different choices and end up with different outcomes. This is perfectly natural; making choices and dealing with their consequences is a fundamental part of being human. The only way you'd be able to guarantee either equal income or equal wealth would be to take away people's ability to make meaningful choices with regard to their own lives.
- andrepd 9y agoThe playing field is not equal, therefore you cannot speak of outcomes as being a function of choices. If people start a foot race, some 10m from the finish, some on the other end of the stadium, first you have to make everyone start with the same opportunities, then you can talk about merit.
- nybble41 9y agoThe playing field is not equal, therefore you cannot speak of outcomes as being a function of choices. When did I ever say that outcomes were a function only of one's own choices? Outcomes are determined by both choices and other factors. Some of those other factors are pure chance; most (including inheritance) are the result of other people's choices. Forcing equality of opportunity has all the same problems as forcing equality of wealth or income—you can't do it without eliminating choice. Since you brought it up, merit is a function of what you do with the opportunities at your disposal. One who achieves a little with limited opportunities shows just as much merit as one who achieves much with more significant opportunities. Instead of an individual foot race, perhaps it would be more instructive to look at life as a relay. Each participant does what they can before passing the baton to the next member of their team (the next generation). In the beginning every team started from the same position (bare subsistence). It would be wrong to judge the fairness of the race based on individual starting positions; you have to consider the cumulative efforts of the entire team. (Always keeping in mind, of course, that life is not a sport, so the value of such analogies is necessarily limited.)
- arpgy 9y agoAnyone know why they are using a logarithmic axis in the chart in section I.5? At first blush seems disingenuous.
- evanlivingston 9y agoOff-topic, but it seems like posts about income inequality have been pushed down lately, farther than a natural HN rank should account for. https://www.atlasobscura.com/articles/rice-disease-mystery-edo-tokyo-navy-beriberi https://www.atlasobscura.com/articles/rice-disease-mystery-e..., ranked 30th, has 100 points, 10 hours old and 12 comments. http://www.ronpatrickstuff.com/ http://www.ronpatrickstuff.com/, ranked 8, 5 hours old, 25 comments this post, ranked 41st, 2 hours old, 133 comments.
- jeffreyrogers 9y agoThere's a methodological problem with some of this data: the top 10% of income earners is a statistical category. The share of income going to the top 10% doesn't tell you much about actual inequality as experienced by real people unless you know how static the individuals making up the top 10% are. Imagine that everyone gets a year in the top 10%, but that the top 10% has 90% of the wealth. That's not that problematic because the benefits of being in the top 10% are evenly distributed throughout society, despite this being a highly unequal society if you use share of income going to the top 10% as your inequality metric. Basically, looking at the top 10% isn't helpful for understanding income inequality because the top 10% is an unchanging statistical category. You need to look at the people who are in the top 10% (at any point in time) and look at how their wealth changes over time. Edit: Last time I mentioned this people thought I was arguing that inequality isn't a problem. I'm not saying that. I am saying that you need to look at how individuals wealth changes over time to see how much of a problem inequality is.