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New Data Shows Income of Top 1% Has Grown 100x Faster Than Bottom 50% Since 1970

42 points by wajdiben 7y ago

averros 7y ago
This has nothing to do with US going off gold standard (due to collapse of Bretton Woods)in early 70s, nothing at all. Oh, and don't pay any attention to Cantillon effects of monetary expansion. Like, the very idea that it causes transfer of real wealth from people in lower social strata to the financial asset-owning elite is totally unspeakable.
carlhjerpe 7y ago
If we graph out how companies has scaled out (Measured in different ways) I don't think it'd be as suprising.
cmdshiftf4 7y ago
Not to sound defeatist, but we've now an endless amount of charts pointing to the significant changes that came as a result of political and economic decisions made in the 70s, including their effect on income and wealth inequality, and what has come from it? We've had revelation after revelation in not only this regard, but also the exposure of the gaming of tax/visa/migration/residency/etc. laws to shelter the gains from those changes in an untouchable manner, and what has come from those? What do we, as a society, want to do about this? What can we do about it? What are the side effects possible from any actions taken on it? Therefore, what will we do about it? The answer is likely not much. We might elect someone Sanders-esque, but the result will be the middle earner taking a further pummeling. Eat the rich? Revolt? They're untouchable. There's a reason many have been building or acquiring elaborate "fall out" shelters in remote areas of New Zealand and elsewhere. It'd also probably be met with economic and societal collapse, and all that hidden money would come back to scoop up the deals in the remains. I'm not saying something shouldn't be done, but good luck designing something that will continue our mutual relative safety, security and prosperity. Not to mention the high likelihood that if actions were taken and the shit did hit the fan, the likely candidates to have the finger pointed at them will be those of us in tech and those in finance, and when you can't access the CEO for a battering then the cronies who built their systems will probably do.
- spyckie2 7y ago
  Some of these problems feel larger than life because they are. I think our generation (I'm early 30s) is spoiled because we receive the benefits of great problem solving all the time in the form of continually progressive improvement in all aspects of society. We've come to expect that things should always improve, because so many things improve tremendously year over year. But what we don't see is how they improve. For instance, the amount and quality of work that goes into making our phone better and better amounts to thousands of years of research and expertise every year, and we (by and large) take it for granted. You can use the market to approximate the amount of investment. 2.2 billion iphones sold in it's history, at around 1000$ each = 2 trillion in revenue. Assume about 5-10% goes into research, and your iphone has about 10-20 billion dollars of investment into it. That's 7000 years of a 300k salary amount of effort. This is back of napkin and can be off by an order of magnitude, but I'm trying to put into perspective how much effort is needed to create really meaningful, great solutions / products. Not just lifetimes, generations of generations of lifetimes. > What do we, as a society, want to do about this? What can we do about it? What are the side effects possible from any actions taken on it? Therefore, what will we do about it? The honest truth is that if you don't have talent or money, you can't do anything but play your role. Welcome to the 21st century. You're not the R&D engineer in the iPhone ecosystem; you're the consumer. You're one of 2.2 billion. Now, consumers do have power in the market - they can refuse to buy goods and services. They can leave the ecosystem. They can complain. They can boycott. But in the consumer model, this only serves to provide awareness of the problems so that the real engineers can fix them. Similarly, the economic changes that the US is going through is not something that normal people can make positive change. We need talent and hard work applied to the problem to create, test, and deploy real solutions. If you think this is not true, imagine replacing the head of R&D at Apple for the next generation iPhone with an average American (or just yourself). A lot of people feel helpless because they see a problem but are unable to solve it. But actually, if you just play your role, things will likely be solved. The consumer market actually works pretty well - it just takes time and some systems are more competent than others. Just playing your role as a consumer that can complain, can speak out, and can demand solutions, is usually good enough. The other option is not something most Americans want to hear. Work on yourself to become a lot better than you are. Think a lot harder than you currently do. Become a better manager of resources, become a better strategic thinker, become addicted to solving harder and harder problems. Eventually (give or take 10-20 years), you'll become someone who is talented and capable enough to be given the harder problems of the world to solve.
awshepard 7y ago
Without meaning to quibble with the numbers in the article, they point out that the bottom 50% of income has gone up $8,000, while the top 1% has gone up $800,000, which is indeed a 100x difference in absolute numbers. But on a relative basis, the bottom 50% of earners' incomes have gone up 42%, and the top 1% have gone up ~250%. Still a large difference, but not nearly as extreme as 100x. Is there merit to analyzing these numbers on an absolute vs. relative scale, and/or is that beside the point? Does it miss the point if analysis like this doesn't also look at the cost/standard of living in those time periods too? E.g. if a particular standard of living that cost $19k in 1970 (manageable in the bottom 50%) now costs $21k, that's a great boon, but if it now costs $30k, that's probably a bad sign.

42 points by wajdiben 7y ago

This has nothing to do with US going off gold standard (due to collapse of Bretton Woods)in early 70s, nothing at all. Oh, and don't pay any attention to Cantillon effects of monetary expansion. Like, the very idea that it causes transfer of real wealth from people in lower social strata to the financial asset-owning elite is totally unspeakable.

carlhjerpe 7y ago

If we graph out how companies has scaled out (Measured in different ways) I don't think it'd be as suprising.

cmdshiftf4 7y ago

Not to sound defeatist, but we've now an endless amount of charts pointing to the significant changes that came as a result of political and economic decisions made in the 70s, including their effect on income and wealth inequality, and what has come from it? We've had revelation after revelation in not only this regard, but also the exposure of the gaming of tax/visa/migration/residency/etc. laws to shelter the gains from those changes in an untouchable manner, and what has come from those? What do we, as a society, want to do about this? What can we do about it? What are the side effects possible from any actions taken on it? Therefore, what will we do about it? The answer is likely not much. We might elect someone Sanders-esque, but the result will be the middle earner taking a further pummeling. Eat the rich? Revolt? They're untouchable. There's a reason many have been building or acquiring elaborate "fall out" shelters in remote areas of New Zealand and elsewhere. It'd also probably be met with economic and societal collapse, and all that hidden money would come back to scoop up the deals in the remains. I'm not saying something shouldn't be done, but good luck designing something that will continue our mutual relative safety, security and prosperity. Not to mention the high likelihood that if actions were taken and the shit did hit the fan, the likely candidates to have the finger pointed at them will be those of us in tech and those in finance, and when you can't access the CEO for a battering then the cronies who built their systems will probably do.

spyckie2 7y ago
Some of these problems feel larger than life because they are. I think our generation (I'm early 30s) is spoiled because we receive the benefits of great problem solving all the time in the form of continually progressive improvement in all aspects of society. We've come to expect that things should always improve, because so many things improve tremendously year over year. But what we don't see is how they improve. For instance, the amount and quality of work that goes into making our phone better and better amounts to thousands of years of research and expertise every year, and we (by and large) take it for granted. You can use the market to approximate the amount of investment. 2.2 billion iphones sold in it's history, at around 1000$ each = 2 trillion in revenue. Assume about 5-10% goes into research, and your iphone has about 10-20 billion dollars of investment into it. That's 7000 years of a 300k salary amount of effort. This is back of napkin and can be off by an order of magnitude, but I'm trying to put into perspective how much effort is needed to create really meaningful, great solutions / products. Not just lifetimes, generations of generations of lifetimes. > What do we, as a society, want to do about this? What can we do about it? What are the side effects possible from any actions taken on it? Therefore, what will we do about it? The honest truth is that if you don't have talent or money, you can't do anything but play your role. Welcome to the 21st century. You're not the R&D engineer in the iPhone ecosystem; you're the consumer. You're one of 2.2 billion. Now, consumers do have power in the market - they can refuse to buy goods and services. They can leave the ecosystem. They can complain. They can boycott. But in the consumer model, this only serves to provide awareness of the problems so that the real engineers can fix them. Similarly, the economic changes that the US is going through is not something that normal people can make positive change. We need talent and hard work applied to the problem to create, test, and deploy real solutions. If you think this is not true, imagine replacing the head of R&D at Apple for the next generation iPhone with an average American (or just yourself). A lot of people feel helpless because they see a problem but are unable to solve it. But actually, if you just play your role, things will likely be solved. The consumer market actually works pretty well - it just takes time and some systems are more competent than others. Just playing your role as a consumer that can complain, can speak out, and can demand solutions, is usually good enough. The other option is not something most Americans want to hear. Work on yourself to become a lot better than you are. Think a lot harder than you currently do. Become a better manager of resources, become a better strategic thinker, become addicted to solving harder and harder problems. Eventually (give or take 10-20 years), you'll become someone who is talented and capable enough to be given the harder problems of the world to solve.

awshepard 7y ago

Without meaning to quibble with the numbers in the article, they point out that the bottom 50% of income has gone up $8,000, while the top 1% has gone up $800,000, which is indeed a 100x difference in absolute numbers. But on a relative basis, the bottom 50% of earners' incomes have gone up 42%, and the top 1% have gone up ~250%. Still a large difference, but not nearly as extreme as 100x. Is there merit to analyzing these numbers on an absolute vs. relative scale, and/or is that beside the point? Does it miss the point if analysis like this doesn't also look at the cost/standard of living in those time periods too? E.g. if a particular standard of living that cost $19k in 1970 (manageable in the bottom 50%) now costs $21k, that's a great boon, but if it now costs $30k, that's probably a bad sign.