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Considering that the top 1% earners captured 121% of all income gains during 2009-2011 (yes, 121%, that means the other 99% of people's income went down)[1] it'

by kyllo 13y ago

Considering that the top 1% earners captured 121% of all income gains during 2009-2011 (yes, 121%, that means the other 99% of people's income went down)[1] it's also possible that many of these people used to be able to save money every month and not live hand-to-mouth before the recession and the sorry-excuse-for-a-recovery, but that their declining real incomes have squeezed their savings margins down to nothing. [1] http://www.huffingtonpost.com/2013/02/12/top-one-percent-income-gains_n_2670455.html http://www.huffingtonpost.com/2013/02/12/top-one-percent-inc...

deleted 13y ago
[deleted]
fennecfoxen 13y ago
Your statistic is shockingly meaningless. 2009 was the bottom of a recession and a stock market crash. By 2011 it recovered. If you look at an equivalent measure from 2007-2009, you'd see a negative number. The top 1% of earners make most of their money due to the stock market and related activity by design, because if you're a shareholder in Coca-Cola, you want a CEO who actually cares about making Coca-Cola profitable over the long term, rather than someone who would collect a pretty salary for a few years and then retire to a life of leisure. You do that with equity compensation, stock options that vest over time - and, since satisfaction with money is logarithmic, you're going to need a lot of them. Now, the overall level of justice achieved by this current system (or lack thereof) is in fact a valid topic of discussion, though largely outside the scope of the post I make here. By contrast, this cherry-picked number you present INTELLECTUALLY DISHONEST. I call on you to be ashamed of yourself. Unprincipled yellow journalism of this nature is bad enough in the wild, but HERE of all places we ought to value REAL information and understanding, not rhetoric and obfuscation. (Alternatively, please abandon Engineering and seek employment in the scummiest Marketing department you can find.)
- kyllo 13y ago
  Oh, quit your hyperventilating. If you have a problem with this statistic, direct your concerns to Dr. Emmanuel Saez, Professor of Economics at UC Berkeley. A PDF of the cited study is linked in the Huffington Post article I linked to, and his CV and contact info are on his faculty page at http://elsa.berkeley.edu/~saez/ http://elsa.berkeley.edu/~saez/
- dragonwriter 13y ago
  > Your statistic is shockingly meaningless. 2009 was the bottom of a recession and a stock market crash. The same basic trend (a small fraction at the top go up, the rest goes down) was basically true during the "expansion" from the end of the 2001 recession to the beginning of the 2009 recession (in that period, IIRC, by quintiles the bottom four all so declines in real income, and the top quintile was flat; the top 5% had a modest increase, and the top 1% had a significant increase.) This is why the 2001-2009 period between recessions seemed, in many ways, like a continuation of a long recession. Because for most people, it essentially was.
- agent00f 13y ago
  It's unclear the reasoning behind this assertion that a CEO needs stock compensation to do good work. Frankly if someone isn't professional enough to do their job without some cartoon carrot hanging in their face, I'm not sure how they would be suitable for a top position in the first place over those who apparently are. -- It's also worth mentioning that there's little contention over the fact that salaries and wealth at the top of the pyramid are rising faster than the norm. The majority of GDP growth for quite a while has been going to the upper crust. I suggest reading the following if this isn't yet evident: http://www2.ucsc.edu/whorulesamerica/power/wealth.html http://www2.ucsc.edu/whorulesamerica/power/wealth.html
  - nthj 13y ago
    > Frankly if someone isn't professional enough to do their job without some cartoon carrot hanging in their face As the Joker said in the Dark Knight, when you're good at something, never do it for free.
glenra 13y ago
> yes, 121%, that means the other 99% of people's income went down Your phrasing implies the SAME PEOPLE are in the top 1% each year, which is not the case. And implies that what happens to a cohort also happens to everyone WITHIN that cohort, which is also not the case. Lastly, we don't have income numbers for "people", we have it for "households". (The "top 1%" contains significantly more than 1% of the people.)
- ahlatimer 13y ago
  The "top 1%" contains significantly more than 1% of the people. Or it contains less than 1% of people if the average household size for the top 1% is smaller than the average household size for the lower 99% (which it most likely is; wealthier people have fewer children on average).
  - glenra 13y ago
    > wealthier people have fewer children on average I don't believe that's the case. At least not if we're using income as a proxy for wealth. Arranged by income, wealthier households in general tend to be larger households. It's well established that the "top 20%" by income contains more than 20% of the earners - lots of dual-income couples - and also contains more than 20% of the people; the "bottom 20%" contains less than 20% of the earners and people. Seems to be true for 1% as well. If you want to check, there's a nice table of household size by income here: http://en.wikipedia.org/wiki/Household_income_in_the_United_States http://en.wikipedia.org/wiki/Household_income_in_the_United_...
    - ahlatimer 13y ago
      I stand corrected. My cursory google search didn't turn up anything concrete, so I fell back on some things I've heard but can't quite place the origin. My understanding was that wealthier families had, on average, ~2 children, but lower income families tended to have more than that. That, of course, does not necessarily mean that the average household size will be larger (there may be more or less unwed or divorced households at lower income levels). Of course, my point still stands: just because it's 1% of households does not necessarily mean that it's >1% of people (it may very well be, though).
lostlogin 13y ago
If most people lost wages, saying they captured 121% of gains doesn't work - you can take someone else's gain if they didn't have one. I get the point, but the phrasing is messy.
- kyllo 13y ago
  It does work. The amount of GDP that the US economy gained from 2009-2011 is some positive value. If you look at the share of GDP gains that was captured by the top 1% earning households over that same time period, it's 121% of that value. I can see why you say the semantics are messy, but it is a sound analysis.
ArkyBeagle 13y ago
The other 99% has been stagnant, not ( as an aggregate measure ) going down. This is critical to understanding this issue. I will say that we don't have a clear understanding of this. There is a general extreme preference for the present equilibrium out there. This is exhibited by employees and by employers. In the '80s, '90s, you were expected to job hop a bit to keep your skills up and to lighten the load when projects ended. That is no longer the case and I think productivity suffers for it.

by kyllo 13y ago

deleted 13y ago

[deleted]

fennecfoxen 13y ago

Your statistic is shockingly meaningless. 2009 was the bottom of a recession and a stock market crash. By 2011 it recovered. If you look at an equivalent measure from 2007-2009, you'd see a negative number. The top 1% of earners make most of their money due to the stock market and related activity by design, because if you're a shareholder in Coca-Cola, you want a CEO who actually cares about making Coca-Cola profitable over the long term, rather than someone who would collect a pretty salary for a few years and then retire to a life of leisure. You do that with equity compensation, stock options that vest over time - and, since satisfaction with money is logarithmic, you're going to need a lot of them. Now, the overall level of justice achieved by this current system (or lack thereof) is in fact a valid topic of discussion, though largely outside the scope of the post I make here. By contrast, this cherry-picked number you present INTELLECTUALLY DISHONEST. I call on you to be ashamed of yourself. Unprincipled yellow journalism of this nature is bad enough in the wild, but HERE of all places we ought to value REAL information and understanding, not rhetoric and obfuscation. (Alternatively, please abandon Engineering and seek employment in the scummiest Marketing department you can find.)

kyllo 13y ago
Oh, quit your hyperventilating. If you have a problem with this statistic, direct your concerns to Dr. Emmanuel Saez, Professor of Economics at UC Berkeley. A PDF of the cited study is linked in the Huffington Post article I linked to, and his CV and contact info are on his faculty page at http://elsa.berkeley.edu/~saez/ http://elsa.berkeley.edu/~saez/
dragonwriter 13y ago
> Your statistic is shockingly meaningless. 2009 was the bottom of a recession and a stock market crash. The same basic trend (a small fraction at the top go up, the rest goes down) was basically true during the "expansion" from the end of the 2001 recession to the beginning of the 2009 recession (in that period, IIRC, by quintiles the bottom four all so declines in real income, and the top quintile was flat; the top 5% had a modest increase, and the top 1% had a significant increase.) This is why the 2001-2009 period between recessions seemed, in many ways, like a continuation of a long recession. Because for most people, it essentially was.
agent00f 13y ago
It's unclear the reasoning behind this assertion that a CEO needs stock compensation to do good work. Frankly if someone isn't professional enough to do their job without some cartoon carrot hanging in their face, I'm not sure how they would be suitable for a top position in the first place over those who apparently are. -- It's also worth mentioning that there's little contention over the fact that salaries and wealth at the top of the pyramid are rising faster than the norm. The majority of GDP growth for quite a while has been going to the upper crust. I suggest reading the following if this isn't yet evident: http://www2.ucsc.edu/whorulesamerica/power/wealth.html http://www2.ucsc.edu/whorulesamerica/power/wealth.html
- nthj 13y ago
  > Frankly if someone isn't professional enough to do their job without some cartoon carrot hanging in their face As the Joker said in the Dark Knight, when you're good at something, never do it for free.

glenra 13y ago

> yes, 121%, that means the other 99% of people's income went down Your phrasing implies the SAME PEOPLE are in the top 1% each year, which is not the case. And implies that what happens to a cohort also happens to everyone WITHIN that cohort, which is also not the case. Lastly, we don't have income numbers for "people", we have it for "households". (The "top 1%" contains significantly more than 1% of the people.)

ahlatimer 13y ago
The "top 1%" contains significantly more than 1% of the people. Or it contains less than 1% of people if the average household size for the top 1% is smaller than the average household size for the lower 99% (which it most likely is; wealthier people have fewer children on average).
- glenra 13y ago
  > wealthier people have fewer children on average I don't believe that's the case. At least not if we're using income as a proxy for wealth. Arranged by income, wealthier households in general tend to be larger households. It's well established that the "top 20%" by income contains more than 20% of the earners - lots of dual-income couples - and also contains more than 20% of the people; the "bottom 20%" contains less than 20% of the earners and people. Seems to be true for 1% as well. If you want to check, there's a nice table of household size by income here: http://en.wikipedia.org/wiki/Household_income_in_the_United_States http://en.wikipedia.org/wiki/Household_income_in_the_United_...
  - ahlatimer 13y ago
    I stand corrected. My cursory google search didn't turn up anything concrete, so I fell back on some things I've heard but can't quite place the origin. My understanding was that wealthier families had, on average, ~2 children, but lower income families tended to have more than that. That, of course, does not necessarily mean that the average household size will be larger (there may be more or less unwed or divorced households at lower income levels). Of course, my point still stands: just because it's 1% of households does not necessarily mean that it's >1% of people (it may very well be, though).

lostlogin 13y ago

If most people lost wages, saying they captured 121% of gains doesn't work - you can take someone else's gain if they didn't have one. I get the point, but the phrasing is messy.

kyllo 13y ago
It does work. The amount of GDP that the US economy gained from 2009-2011 is some positive value. If you look at the share of GDP gains that was captured by the top 1% earning households over that same time period, it's 121% of that value. I can see why you say the semantics are messy, but it is a sound analysis.

ArkyBeagle 13y ago

The other 99% has been stagnant, not ( as an aggregate measure ) going down. This is critical to understanding this issue. I will say that we don't have a clear understanding of this. There is a general extreme preference for the present equilibrium out there. This is exhibited by employees and by employers. In the '80s, '90s, you were expected to job hop a bit to keep your skills up and to lighten the load when projects ended. That is no longer the case and I think productivity suffers for it.