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Strange how articles like this aren't taken as an argument against the utility of "inequality". Does anyone think that the poor of today would be better off in

Strange how articles like this aren't taken as an argument against the utility of "inequality". Does anyone think that the poor of today would be better off in Czarist Russia? [1] I also find it interesting that "inequality" is based solely on "share of national income", as if there is just this big pile of ex nihilo money being apportioned out unfairly. [1] http://annualletter.gatesfoundation.org/~/media/Annual%20Letter%202014/Myth%201/Myth1Info1_Curves_Final_EN_0122.jpg http://annualletter.gatesfoundation.org/~/media/Annual%20Let...

deleted 13y ago
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JonnieCache 13y ago
>as if there is just this big pile of ex nihilo money being apportioned out unfairly. I get the whole "wealth is not zero sum" thing, I can see how it applies at the level of a whole economy. However, at the level of an individual company, there is a finite amount of revenue, and it is divided up in a zero sum fashion. When workers see their own pay going down while the bosses pay leaps by hundreds of percent, all that stuff about fallacious piles of money doesnt really make sense.
rbehrends 13y ago
Just because the situation has improved with respect to absolute poverty doesn't mean that relative poverty isn't a problem, too. It's just a different kind of problem. First, rising income inequality/relative poverty is economically harmful. It's simply not sustainable forever, especially in the consumer economy that the US has. Capital gains in particular cannot continue to exceed general economic growth without something eventually giving. Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class (admittedly, exacerbated by the fact that the US has no VET system worth speaking of). Perversely, where the affluent European countries invest in the education of their citizens, some US states seem to try and position themselves as low-wage alternatives to Mexico and China. Especially considering the ever-increasing levels of automation, this is all kinds of crazy. Also, with respect to absolute poverty, while the American poor have it generally better than serfs in Czarist Russia or most of the people in your average third world country (not a very high bar, of course), there's still plenty of hunger and homelessness in the US.
- yummyfajitas 13y ago
  Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class... If I gave you data showing that college consumption is at an all time high and mobility remains unchanged, in spite of a large increase in inequality, would that convince you your beliefs are incorrect? If not, what data (if any) would cause you to change your beliefs? http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
  - rbehrends 13y ago
    Maybe you want to reconsider yours? I'm contrasting the US with comparatively affluent European countries; US social mobility has been comparatively low for quite some time, but inequality (as measured by the after-tax Gini) hasn't risen all that much over the past two decades, either; it's gotten slightly worse, but not massively. I'm talking about college tuition as a symptom here, not the primary cause (there are obviously many drivers of inequality and lack of social mobility). So it isn't surprising that social mobility is actually experiencing a slight downward trend [1]. But to elaborate: A college degree has become more crucial than ever for the chance at a middle class life in America, yet real wages have stagnated, despite higher college attendance, and a college degree isn't worth what it used to be, either [2], while student debt has exploded [3]. In fact, even life expectancy is correlated with education and has even fallen for the least educated [4]. As a result, colleges have a seller's market available to them (in part propped up by the student loan scheme, though it likely wouldn't be all that much different without). Conversely, people are willing to sacrifice current and future income to essentially tread water economically (=> stagnant real wages). [1] http://www.businessinsider.com/the-american-dream-is-now-a-myth-2012-6 http://www.businessinsider.com/the-american-dream-is-now-a-m... [2] http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is-now-a-ticket-to-a-job-in-a-coffee-shop.html http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is... [3] http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/ http://www.theatlantic.com/business/archive/2011/08/chart-of... [4] http://www.motherjones.com/kevin-drum/2013/01/not-everyone-living-longer http://www.motherjones.com/kevin-drum/2013/01/not-everyone-l...

deleted 13y ago

[deleted]

JonnieCache 13y ago

>as if there is just this big pile of ex nihilo money being apportioned out unfairly. I get the whole "wealth is not zero sum" thing, I can see how it applies at the level of a whole economy. However, at the level of an individual company, there is a finite amount of revenue, and it is divided up in a zero sum fashion. When workers see their own pay going down while the bosses pay leaps by hundreds of percent, all that stuff about fallacious piles of money doesnt really make sense.

rbehrends 13y ago

Just because the situation has improved with respect to absolute poverty doesn't mean that relative poverty isn't a problem, too. It's just a different kind of problem. First, rising income inequality/relative poverty is economically harmful. It's simply not sustainable forever, especially in the consumer economy that the US has. Capital gains in particular cannot continue to exceed general economic growth without something eventually giving. Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class (admittedly, exacerbated by the fact that the US has no VET system worth speaking of). Perversely, where the affluent European countries invest in the education of their citizens, some US states seem to try and position themselves as low-wage alternatives to Mexico and China. Especially considering the ever-increasing levels of automation, this is all kinds of crazy. Also, with respect to absolute poverty, while the American poor have it generally better than serfs in Czarist Russia or most of the people in your average third world country (not a very high bar, of course), there's still plenty of hunger and homelessness in the US.

yummyfajitas 13y ago
Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class... If I gave you data showing that college consumption is at an all time high and mobility remains unchanged, in spite of a large increase in inequality, would that convince you your beliefs are incorrect? If not, what data (if any) would cause you to change your beliefs? http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
- rbehrends 13y ago
  Maybe you want to reconsider yours? I'm contrasting the US with comparatively affluent European countries; US social mobility has been comparatively low for quite some time, but inequality (as measured by the after-tax Gini) hasn't risen all that much over the past two decades, either; it's gotten slightly worse, but not massively. I'm talking about college tuition as a symptom here, not the primary cause (there are obviously many drivers of inequality and lack of social mobility). So it isn't surprising that social mobility is actually experiencing a slight downward trend [1]. But to elaborate: A college degree has become more crucial than ever for the chance at a middle class life in America, yet real wages have stagnated, despite higher college attendance, and a college degree isn't worth what it used to be, either [2], while student debt has exploded [3]. In fact, even life expectancy is correlated with education and has even fallen for the least educated [4]. As a result, colleges have a seller's market available to them (in part propped up by the student loan scheme, though it likely wouldn't be all that much different without). Conversely, people are willing to sacrifice current and future income to essentially tread water economically (=> stagnant real wages). [1] http://www.businessinsider.com/the-american-dream-is-now-a-myth-2012-6 http://www.businessinsider.com/the-american-dream-is-now-a-m... [2] http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is-now-a-ticket-to-a-job-in-a-coffee-shop.html http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is... [3] http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/ http://www.theatlantic.com/business/archive/2011/08/chart-of... [4] http://www.motherjones.com/kevin-drum/2013/01/not-everyone-living-longer http://www.motherjones.com/kevin-drum/2013/01/not-everyone-l...