Separate but unequal: Charts show growing rich-poor gap

[bpwallace49]

Trickle trickle

 

Good times

 

This link is even better . . with documneted footnotes even!

Edited February 24, 2011 by bpwallace49

[caddyman]

Trickle trickle

 

Good times

 

This link is even better . . with documneted footnotes even!

What exactly is your point? Do you have a suggestion on how to fix this problem? What are we supposed to do? Just take money from the evil rich and hand it to the poor? We have more freeloaders now than ever, I guess we should just make everyone even whether they deserve it or not.

[SEC=UGA]

[Savage Beatings]

Seems you do not like inequality.

 

So what does equality mean to you? Does it mean that everybody has the same amount of stuff? Or does it mean that we all have the same opportunities to do what we want with our lives? Do outcomes need to be the same no matter what effort we put into our lives?

[Savage Beatings]

Do you have a suggestion on how to fix this problem?

 

Your question pre-supposes that there is a problem to fix.

[SEC=UGA]

Seems you do not like inequality.

 

So what does equality mean to you? Does it mean that everybody has the same amount of stuff? Or does it mean that we all have the same opportunities to do what we want with our lives? Do outcomes need to be the same no matter what effort we put into our lives?

 

It means that smokers should be treated differently than people who don't smoke. Who, ironically enough, are largely a part of the demographic that he is so concerned about. Come to think of it, we should probably lower the tobacco tax so these people have it a bit easier.

[bpwallace49]

What exactly is your point? Do you have a suggestion on how to fix this problem? What are we supposed to do? Just take money from the evil rich and hand it to the poor? We have more freeloaders now than ever, I guess we should just make everyone even whether they deserve it or not.

 

Do you thnk, when presented with this data, that decisions that have been made about the economy over the time period in the charts has been positive or negative?

 

Do you think that moving to an increasingly polarized nation between the "haves" versus "have nots" is a positive or negative indicator for long term stability in the US?

 

Zeke I think we might be seeing that the concept of "trickle down economics" by reducing the taxes on upper brackets that might benefit a rarefied few at the expense of the najority is completely erroneous. In other words, it doesnt work. It doesnt raise all boats as was intended.

[tazinib1]

We have more freeloaders now than ever, I guess we should just make everyone even whether they deserve it or not.

 

The reason we have more free loaders is because the new welfare generation is coming of age. These low income families are not stupid. Lazy, but not stupid. I can't tell you how many times I see a mother of 4 go through the checkout line at the local grocery store and use a food stamp debit card, then push her groceries into a brand new Lincoln Navigator. Free housing, food stamps, medical and dental....SHAM WOW! man, if you can get a job that pays cash, you got it made sucking on the gooberments tit. The children learn how to abuse the system from birth. Hell, even the illegals are starting to reap more benefits than the average American. Sad, but true.

Edited February 24, 2011 by tazinib1

[caddyman]

Seems you do not like inequality.

 

So what does equality mean to you? Does it mean that everybody has the same amount of stuff? Or does it mean that we all have the same opportunities to do what we want with our lives? Do outcomes need to be the same no matter what effort we put into our lives?

Exactly, I don't know what the solution is other than communism. Why is this gap so large? Does it have anything to do with the cultural state of the country where kids grow up without an intact family and extremely poor values? Does it have anything to do with the growing list of entitled and the percent of those that are satisfied with being handled things? I have two recent situations that make me sick. One is my son's hockey coach that lost his job. He says he will take a year off and collect before he even looks for work. He makes plenty of money to do NOTHING and stay home and play with his kids. The other is I just tried to hire a consultant who was let go six months ago from a state job making 75k. I offered him 67.5k with an opportunity for about 30k in bonuses. He declined and will remain on welfare. the desire to succeed is not what it used to be.

[caddyman]

Do you thnk, when presented with this data, that decisions that have been made about the economy over the time period in the charts has been positive or negative?

 

Do you think that moving to an increasingly polarized nation between the "haves" versus "have nots" is a positive or negative indicator for long term stability in the US?

 

Zeke I think we might be seeing that the concept of "trickle down economics" by reducing the taxes on upper brackets that might benefit a rarefied few at the expense of the najority is completely erroneous. In other words, it doesnt work. It doesnt raise all boats as was intended.

Do you constantly have to take a personal shot when you reply to someone? Talk about things that get old. I don't deny it is a negative thing that this is happening. However, why is it happening and what do YOU propose we do to fix it. The only thing I can surmise is that you want to tax the rich more. OK, Mr. President you have your wish. Tax the rich at 90%. Then what? Do you just hand the money to the poor saps that don't have the skills to earn it? Please tell me what you want to do after you have that tax money.

[Perchoutofwater]

Trickle trickle

 

Good times

 

This link is even better . . with documneted footnotes even!

 

I find it interesting that in all those graphs it doesn't show how much each quintile pays in taxes, and how much each quintile receives in government assistance. While your pretty graphs chart the effective tax rate of those making over $1 Million, they do not show the effective tax rate of anyone else? I guess that information wouldn't be helpful to the case that you are trying to make.

 

Honestly I've said for a long time tax everyone exactly the same, and get rid of all loopholes and deductions, with the exception of deductions to charitable organizations. Then let everyone make for themselves what they can. Why should we try to pit one group of people against another. If we were talking about treated people based on skin color, religion, sex, etc... the way some seem to want to treat those that make large incomes, we'd be called racist, sexist, etc....

[bpwallace49]

Exactly, I don't know what the solution is other than communism.

 

Was the country prior to Reagan communist? Cause that is what you are implying.

[SEC=UGA]

Do you thnk, when presented with this data, that decisions that have been made about the economy over the time period in the charts has been positive or negative?

 

Do you think that moving to an increasingly polarized nation between the "haves" versus "have nots" is a positive or negative indicator for long term stability in the US?

 

Zeke I think we might be seeing that the concept of "trickle down economics" by reducing the taxes on upper brackets that might benefit a rarefied few at the expense of the najority is completely erroneous. In other words, it doesnt work. It doesnt raise all boats as was intended.

 

 

I want everyone to realize that a majority of those rich people were middle class 20 to 30 years ago. Just because they came up with a way to do things better than the rest of us doesn't mean that they should be penalized for it. You act as if this money ha been consolidated into the hands of a few families and that there is no opportunities for others to advance, which is dead ass wrong.

 

Think of Bill Gates and all he does with his monies. Warren Buffet and his charitable causes (though he does spend millions a year on tax attornies to keep him from paying his fair share.) Madonna, Oprah, Tiger Woods, the Google peeps, Arthur Blank, Bernie Marcus, the NY Yankees, The Packers, the LA Lakers, etc... They are the rich people, filthy freaking rich, dirty, charitable people and you want to rag on them.

[caddyman]

Was the country prior to Reagan communist? Cause that is what you are implying.

Different times. Different times. You still won't answer my question. WHAT DO YOU PROPOSE?

[Perchoutofwater]

Do you thnk, when presented with this data, that decisions that have been made about the economy over the time period in the charts has been positive or negative?

 

Do you think that moving to an increasingly polarized nation between the "haves" versus "have nots" is a positive or negative indicator for long term stability in the US?

 

Zeke I think we might be seeing that the concept of "trickle down economics" by reducing the taxes on upper brackets that might benefit a rarefied few at the expense of the najority is completely erroneous. In other words, it doesnt work. It doesnt raise all boats as was intended.

 

With out determining what people are getting back from the government, which I do not think was included in your graphs, you really aren't looking at a complete picture. Additionally you say trickle down, but all your charts only show the effective tax rates on the top 1%. Why don't they show the effective tax rate of each quintile? In additions to taxes, what if any part has excess government spending played in this?

[caddyman]

Was the country prior to Reagan communist? Cause that is what you are implying.

the more I think about this..trickle down does work. The issue now is that the amount of people on the low end has grown so much that the pot is not enough to cover all of them. We had 225 miilion people in 1980, now we have over 300 million not counting the illegals.

[caddyman]

Was the country prior to Reagan communist? Cause that is what you are implying.

Back to my original question...What is your point with this thread?

[Azazello1313]

The gap between rich and poor today is also a gap in cultural norms and mores to a degree unparalleled in our modern experience. The overall divorce rate, for example, exploded in the 1970s, but has since returned to just about its 1960 level for those with a college education. For the less ­educated, however, the rate has continued to climb — and women without high-school diplomas are now about three times as likely to divorce within ten years of their first marriage as their college-educated counterparts.

 

Child-rearing has seen a similar split. In 1965, almost no mothers with any level of education reported that they had never been married. Today, this still holds true for mothers who have finished college: Only 3% have never been married. But that figure stands in stark contrast with the nearly 25% of mothers without high-school diplomas who say that they have never been married. In fact, last year, about 40% of all American births occurred out of wedlock. And about 70% of African-American children — as well as most Hispanic children — are born to unmarried ­mothers. But this situation obtains for low-wage, non-­college-­educated whites as well: It is estimated that about 70% of children born to non-Hispanic white women with no more than a high-school education and income below $20,000 per year were born out of wedlock.

 

The level of family disruption in America is enormous compared to almost every other country in the developed world. Of course, out-of-wedlock births are as common in many European countries as they are in the United States. But the estimated percentage of 15-year-olds living with both of their biological parents is far lower in the United States than in Western Europe, because unmarried European parents are much more likely to raise children together. It is hard to exaggerate the chaotic conditions under which something like a third of American children are being raised — or to overstate the negative impact this disorder has on their academic achievement, social skills, and character formation. There are certainly heroic exceptions, but the sad fact is that most of these children could not possibly compete with their foreign counterparts.

 

As the lower classes in America experience these alarming regressions, wealthier and better-educated Americans have managed to re-create a great deal of the lifestyle of the old WASP ascendancy — if with different justifications for it. Political correctness serves the same basic function for this cohort that "good manners" did for an earlier elite; environmentalism increasingly stands in for the ethic of controlling impulses so as to live within limits; and an expensive, competitive school culture — from pre-K play groups up through graduate school — socializes the new elite for constructive competition among peers. These Americans have even re-created the old WASP aesthetic preference for the antique, authentic, and pseudo-utilitarian at the expense of vulgar displays of wealth. In many cases, they live in literally the same homes as the previous upper class.

 

Such behavior enables multi-generational success in a capitalist ­economy, and will serve the new elite well. But what remains to be seen is whether this new upper class will have the nerve, wit, and sense of purpose that led the old WASP elite to develop a social matrix that offered broadly shared prosperity to generations of Americans.

 

Their task will be made very difficult by the growing bifurcation of social norms in America. A welfare state can best perform its basic ­function — buffering the human consequences of the market, without unduly hampering its effectiveness — where enough widely shared social capital exists to guide the behavior of most people in a bourgeois direction. But as it performs that function, the welfare state creates incentives that push people toward short-term indolence, free riding, and self-absorption — thus undermining the very norms, and consuming the kind of social capital, it needs to operate. (The market often does the same thing: relying on rules and behaviors made possible by traditional morality even as it undercuts it.)

 

Post-war America had much more widely shared bourgeois norms, and so was better able to contend with the negative side effects of the welfare state. Today's American underclass, however, is increasingly developing in the absence of such norms — to a large degree as the result of the welfare state itself. Meanwhile, the need for innovation and the pressures of a global economy only continue to reinforce the causes of our social bifurcation.

 

INEQUALITY AS SYMPTOM

 

Perhaps the best illustration of these pressures — to innovate and deregulate without coming apart at the seams — is found in widening economic inequalities. It has often been noted that American society has become increasingly unequal in economic terms over the past 30 years. As Federal Reserve chairman Ben Bernanke noted in a 2007 speech, "the share of income received by households in the top fifth of the income distribution, after taxes have been paid and government transfers have been received, rose from 42% in 1979 to 50% in 2004, while the share of income received by those in the bottom fifth of the distribution declined from 7% to 5%. The share of after-tax income garnered by the households in the top 1% of the income distribution increased from 8% in 1979 to 14% in 2004." A typical senior partner in a high-end ­investment-banking, corporate-law, or ­management-consulting firm can now expect to make upwards of $1 million per year. In the stratosphere of the economy, the increases in wealth have been mind-­boggling: Even after the recent market meltdowns, there are about 30 times as many American billionaires today as there were in 1982.

 

The growth in inequality that began in the 1970s was driven by the social and economic forces outlined earlier. In 1970, "non-­distributive ­services" (finance, professional services, health care, and so on) became for the first time a larger part of the private economy than goods-­producing industries. This shift to services tended to enhance the prospects of the cognitive elite at the expense of traditional industrial workers. At the same time, as we have seen, the combination of changes in cultural mores and the growth of social programs began to disassemble the traditional family — ultimately leading to a class-based divide in family structure, which privileges the better-educated Americans already reaping the benefits of the shifting economy. The social capital transmitted by intact families has therefore become a more and more relevant source of competitive advantage.

 

Two exogenous shocks were also important. First, American domestic production of oil peaked in 1971; oil imports doubled between 1970 and 1975; and OPEC was able to drive large price increases. This oil shock was directly regressive, but it also tended to disproportionately harm those industries that were the source of high-wage union jobs. Second, the percentage of the U.S. population born abroad — which had reached its historical minimum in 1970 — began to rise rapidly as mass immigration resumed after a multi-decade hiatus. This development increased inequality further by introducing a large low-income group to the population, and by intensifying wage competition among lower-skill workers.

 

The Reagan economic revolution exacerbated the problem. Its success resulted, in part, from forcing extremely painful restructuring on ­industry after industry. One critical consequence of this restructuring was a new compensation paradigm — one that relies on markets rather than on corporate diktats, regulation, or historical norms to set pay. This new regime also accepts a much higher degree of income disparity based on market-denominated performance, and it expects that most people will exploit the resulting demand for talent by moving from company to company many times during a career. Growing inequality was a price we paid for the economic growth needed to recover from the '70s slump and to retain our global position.

 

Rising inequality would have been easier to swallow had it been merely a statistical artifact of rapid growth in prosperity that substantially benefited the middle class and maintained social mobility. But this was not the case. Over the same period in which inequality has grown, wages have been stagnating for large swaths of the middle class, and income mobility has been declining.

 

Evaluating the real change in economic circumstances of a typical American family over the past 30 years is extremely complicated. To begin with, the typical family is smaller than it was three decades ago. Further, how we adjust for inflation has an enormous impact on any comparative calculations. Finally, family budgets must increasingly account for previously unpaid work — like child care, or attending to sick relatives.

 

Despite these complicating factors, a few trends still emerge rather clearly. First, average living standards have continued to rise since 1980. Second, the real hourly wages for a typical non-supervisory job have not increased very much over this period. Third, this wage stagnation is at least partly explained by the rising costs of health care — which, because of the American system of employer-based health insurance, are usually deducted implicitly from what workers see as wages. Fourth, personal indebtedness has risen dramatically over the same period and accelerated rapidly during the past decade — so that at least some of the increased consumption was simply borrowed. And last, income ­mobility — the likelihood of an individual's moving up the relative income distribution — appears to have declined slightly over the past three decades, according to multiple studies by the Federal Reserve Banks of Boston and Chicago.

 

Furthermore, the divisive effects of this cluster of trends — ­rising income inequality and reduced income mobility, some degree of ­middle-class wage stagnation, increased personal debt, and increased class stratification of stable social behavior — are only intensified by climbing rates of assortative mating and residential segregation, as well as an increasingly crude and corrosive popular culture combined with the technology-driven fragmentation of mass media.

 

So economic inequality is likely to cause problems with social ­cohesion — but far more important, it is a symptom of our deeper ­problem. As the unsustainable high tide of post-war American dominance has slowly ebbed, many — perhaps most — of our country's workers appear unable to compete internationally at the level required to maintain anything like their current standard of living. And a shrinking elite portion of the American population, itself a shrinking fraction of the world ­population, cannot indefinitely maintain our global position.

 

We are between a rock and a hard place. If we reverse the market-based reforms that have allowed us to prosper, we will cede global economic share; but if we let inequality and its underlying causes grow unchecked, we will hollow out the middle class — threatening social cohesion, and eventually surrendering our international position ­anyway. This, and not some world-is-flat happy talk, is what the ­challenge of globalization means for America. But unfortunately, by a combination of carelessness and design, we appear now to be embracing a counterproductive response to this daunting dilemma.

[bushwacked]

I'm not pretending to be an expert or have all the answers, but it seems like BP is getting ridiculed a bit for nothing more recognizing this as a potential concern. Historians have often attributed the inequity gap as the primary or one of the primary components of societal collapse. I don't know if we get to that point here in the USA, but maybe it's kind of short-sighted to consider someone a commie simply because they have an opinion that the growing inequity gap isn't necessarily a good thing.

[caddyman]

I'm not pretending to be an expert or have all the answers, but it seems like BP is getting ridiculed a bit for nothing more recognizing this as a potential concern. Historians have often attributed the inequity gap as the primary or one of the primary components of societal collapse. I don't know if we get to that point here in the USA, but maybe it's kind of short-sighted to consider someone a commie simply because they have an opinion that the growing inequity gap isn't necessarily a good thing.

I did not say he was a commie. Frankly, he has earned this thrashing due to his continued biased posts. He did not post this for the reason you implied. I have given him three opportunities to explain why he posted this and also what he thinks might solve the problem. But of course he does not answer because he cant. He is only trying to drive the wedge deeper here on this board.

[gbpfan1231]

Here are real life examples. I have a good friend who never went to college and currently works at a palce as a factory worker. Let's say he started 15 years ago making $15.00 per hour (31,200 per year). He gets a 2% raise each year so after 15 years he is now making 41,168 per year. Increase of 32% from the start.

 

I have another friend who did go to college and tried to do a start up website and lost a ton of money and has been paying that off for 15 years. He moved to California for a job and has worked at 5 different employers over the past 15 years. he an opportunity to move his family from California to Chicago to work for a start up company. he now is Midwest Director of sales making probably 200k per year inclucing commission and bonus. he will very soon cash out his options and be a millionaire.

 

Take another friend for example who went to college and got a degree and has worked for 3 different companies in 8 different job titles. This person also has moved to Europe for a different job and then moved to Connecticut and then to Wisconsins and also worked in California for a 3-4 month period. This person started at 40,000 per year and let's just say got the same 2% raise but because of willing to move and work different jobs also got increases of pay of 5,000 every 5 years. After 15 years that person would be a bit over 64,000 (this is very conservative). That is an increase of 61%.

 

Look at the gap widening. Did any of three do anything wrong? No - is it bad that the gap is widening? No.

 

Is the gap widening because people who willingly try to move up do so at a greater rate and there are more people who are content enough to stay where they are at (maybe for family reason or whatever).

[gbpfan1231]

Here are real life examples. I have a good friend who never went to college and currently works at a palce as a factory worker. Let's say he started 15 years ago making $15.00 per hour (31,200 per year). He gets a 2% raise each year so after 15 years he is now making 41,168 per year. Increase of 32% from the start.

 

I have another friend who did go to college and tried to do a start up website and lost a ton of money and has been paying that off for 15 years. He moved to California for a job and has worked at 5 different employers over the past 15 years. he an opportunity to move his family from California to Chicago to work for a start up company. he now is Midwest Director of sales making probably 200k per year inclucing commission and bonus. he will very soon cash out his options and be a millionaire.

 

Take another friend for example who went to college and got a degree and has worked for 3 different companies in 8 different job titles. This person also has moved to Europe for a different job and then moved to Connecticut and then to Wisconsins and also worked in California for a 3-4 month period. This person started at 40,000 per year and let's just say got the same 2% raise but because of willing to move and work different jobs also got increases of pay of 5,000 every 5 years. After 15 years that person would be a bit over 64,000 (this is very conservative). That is an increase of 61%.

 

Look at the gap widening. Did any of three do anything wrong? No - is it bad that the gap is widening? No.

 

Is the gap widening because people who willingly try to move up do so at a greater rate and there are more people who are content enough to stay where they are at (maybe for family reason or whatever).

Another thing - why would you tax the latter two more than the first person? Why should they take what they have earned and throw it back to person number one??

[SEC=UGA]

I'm not pretending to be an expert or have all the answers, but it seems like BP is getting ridiculed a bit for nothing more recognizing this as a potential concern. Historians have often attributed the inequity gap as the primary or one of the primary components of societal collapse. I don't know if we get to that point here in the USA, but maybe it's kind of short-sighted to consider someone a commie simply because they have an opinion that the growing inequity gap isn't necessarily a good thing.

 

While, yes, moentary inequity has led to the collapse of societies in none of them had the working class had such a high standard of living. If people were in the streets without food and shelter, maybe there is a problem, if the wealth is consolidated into the hands of a few long tenured, wealthy families, maybe their is a problem, if society does not allow for the common man to achieve succes, if the upper class throws obstacles in their path, yes then their may be a problem. But, so long as you have a society where an individual from a modest back ground can achieve success, then their is not a problem.

 

If you need proof of a complete and utter nobody, a simpleton, being able to amass wealth and fame in this country, you have to look no further than here... Everyone should realize that the opportunities in this country are unlimitied.

[tazinib1]

Here is something for you to chew on

[detlef]

the more I think about this..trickle down does work. The issue now is that the amount of people on the low end has grown so much that the pot is not enough to cover all of them. We had 225 miilion people in 1980, now we have over 300 million not counting the illegals.

Based on what? That we have more people in the country now? Really, what's the reason, because there's a ton of reasons why it makes no sense at all. And I've gone through them here plenty of times. Enough times for even the likes of perch and others who are against increasing taxes on the wealthy to admit as much. Leaving their argument to simply be that, just because you can tax the rich, doesn't mean you should.

 

But the simple reason why trickle down doesn't work is as follows:

 

Those in charge of making jobs, make them to keep up with demand. Yes, they have to have capital to do so, which is a fine reason not to tax the hell out of them. But that's not what gets sold to us in the name of "trickle down". What gets sold to us in the name of "trickle down" is tax breaks for the wealthy and the notion that these guys will go out and make jobs with all that extra money. But that is such a bogus notion it's insulting. Because they're not going to go out just hire people because they have nothing better to do with their money. If nobody has any money to buy what they're selling, they're just going to keep production and staffing at their current levels and hold onto the money. Do think otherwise is to assume that the wealthy are idiots. And I don't think that's a sound basis for policy.

 

From a stimulative standpoint (at least short term), is to give a bunch of money to the people with so little that they're bound to spend it. They spend it, and it flows up hill, passing through a bunch of hands along the way. There may be bad consequences of this like the entitlement issues and torpedoing motivation but at least it makes more sense than handing money to people who have plenty and hoping they go out and make jobs to fill a demand that doesn't exist.

 

That is the undeniable flow of money without intervention. It flows uphill. Every time. That's why the rich get richer. Because the money, ultimately, ends up there. This is not evil, or even wrong, but it's completely inevitable. Which is why the notion that money will ever "trickle down" is about as asinine as saying water will trickle up. It just doesn't happen that way, and it never will.