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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

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...
  - yummyfajitas 13y ago
    inequality (as measured by the after-tax Gini) hasn't risen all that much over the past two decades Over the relevant time period of comparison (70's to today), GINI has increased from about 40% to 47%. http://upload.wikimedia.org/wikipedia/commons/e/e3/The_US_Gini_Coefficient_for_Household_Income_(1967_-_2007_).png http://upload.wikimedia.org/wikipedia/commons/e/e3/The_US_Gi... Mobility has remained flat over this time period. Over the same time period, college enrollment has gone from about 45% to 70%. http://www.bls.gov/opub/ted/2010/ted_20100428.htm http://www.bls.gov/opub/ted/2010/ted_20100428.htm Based on the historical data, it looks as if inequality increases college enrollment and does not alter mobility. (Assuming of course, as most inequality mongers tend to do, that correlation == causality. Which is silly but whateve.r) Your two predictions have not passed the real world test. Again: what data would convince you that your theory is wrong? To convince me I'm incorrect, it's very simple. I'd want to see an exogenous change in inequality result in some measurable effect. For example, suppose for some reason a hord of rich people to move into some locale - I'd want to see something bad happen to the non-rich people who remain there above and beyond regional trends.
    - rbehrends 13y ago
      Over the relevant time period of comparison (70's to today), GINI has increased from about 40% to 47%. You're confusing the Gini before taxes and transfers with the Gini after taxes and transfers (which is the one relevant for inequality). Also, the past two decades started in the 90s, not the 70s. Based on the historical data, it looks as if inequality increases college enrollment and does not alter mobility. There's been a lot else going on since the 1970s (end of the Cold War, the internet, increasing acceptance of women going to college, just to name a few factors). I really don't know how you get the idea that there's just one single factor affecting college enrollment (see also the Flynn effect, which is likely a pretty huge factor). If you want to claim that increasing inequality increases college enrollment, you'll have to provide better support for such a claim. More importantly, while college enrollment rates have increased, college graduation rates (relative to enrollment) have decreased [1], and overall college degree attainment has shown relatively little change [2]. This is consistent with the general experience that, while tuition does not necessarily form an obstacle to initial enrollment, the additional financial pressure often makes it hard to actually maintain a course of study (especially if that requires you to work more while studying full time). For all practical purposes, higher tuition fees do create a barrier to enrollment. That there have historically been countervailing factors does not mean that more expensive college tuition does not functionally retard enrollment relative to what it would be otherwise. Also, what increase there is in college enrollment comes at the cost of an explosion in student loan debt, where families saddle themselves with long term financial liabilities, more and more often without a degree to show for it. [1] http://en.wikipedia.org/wiki/Decreasing_graduation_completion_rates_in_the_United_States http://en.wikipedia.org/wiki/Decreasing_graduation_completio... [2] https://www.census.gov/hhes/socdemo/education/data/cps/historical/fig4.jpg https://www.census.gov/hhes/socdemo/education/data/cps/histo...

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...
- yummyfajitas 13y ago
  inequality (as measured by the after-tax Gini) hasn't risen all that much over the past two decades Over the relevant time period of comparison (70's to today), GINI has increased from about 40% to 47%. http://upload.wikimedia.org/wikipedia/commons/e/e3/The_US_Gini_Coefficient_for_Household_Income_(1967_-_2007_).png http://upload.wikimedia.org/wikipedia/commons/e/e3/The_US_Gi... Mobility has remained flat over this time period. Over the same time period, college enrollment has gone from about 45% to 70%. http://www.bls.gov/opub/ted/2010/ted_20100428.htm http://www.bls.gov/opub/ted/2010/ted_20100428.htm Based on the historical data, it looks as if inequality increases college enrollment and does not alter mobility. (Assuming of course, as most inequality mongers tend to do, that correlation == causality. Which is silly but whateve.r) Your two predictions have not passed the real world test. Again: what data would convince you that your theory is wrong? To convince me I'm incorrect, it's very simple. I'd want to see an exogenous change in inequality result in some measurable effect. For example, suppose for some reason a hord of rich people to move into some locale - I'd want to see something bad happen to the non-rich people who remain there above and beyond regional trends.
  - rbehrends 13y ago
    Over the relevant time period of comparison (70's to today), GINI has increased from about 40% to 47%. You're confusing the Gini before taxes and transfers with the Gini after taxes and transfers (which is the one relevant for inequality). Also, the past two decades started in the 90s, not the 70s. Based on the historical data, it looks as if inequality increases college enrollment and does not alter mobility. There's been a lot else going on since the 1970s (end of the Cold War, the internet, increasing acceptance of women going to college, just to name a few factors). I really don't know how you get the idea that there's just one single factor affecting college enrollment (see also the Flynn effect, which is likely a pretty huge factor). If you want to claim that increasing inequality increases college enrollment, you'll have to provide better support for such a claim. More importantly, while college enrollment rates have increased, college graduation rates (relative to enrollment) have decreased [1], and overall college degree attainment has shown relatively little change [2]. This is consistent with the general experience that, while tuition does not necessarily form an obstacle to initial enrollment, the additional financial pressure often makes it hard to actually maintain a course of study (especially if that requires you to work more while studying full time). For all practical purposes, higher tuition fees do create a barrier to enrollment. That there have historically been countervailing factors does not mean that more expensive college tuition does not functionally retard enrollment relative to what it would be otherwise. Also, what increase there is in college enrollment comes at the cost of an explosion in student loan debt, where families saddle themselves with long term financial liabilities, more and more often without a degree to show for it. [1] http://en.wikipedia.org/wiki/Decreasing_graduation_completion_rates_in_the_United_States http://en.wikipedia.org/wiki/Decreasing_graduation_completio... [2] https://www.census.gov/hhes/socdemo/education/data/cps/historical/fig4.jpg https://www.census.gov/hhes/socdemo/education/data/cps/histo...