U.S. Income Inequality Hits a New Threshold
bloomberg.com
bloomberg.com
I make a pretty high wage compared to a cashier at a store, but my interests align with them a lot more than a Walton. Yet my peers are convinced that because they have the trappings of the petite bourgeoisie and a well funded 401k that they have more in common with a Koch.
I'm not familiar with a society that experienced such high inequality and did not have very disruptive upheaval afterwards. One would think the wealthy would advocate for universal health care, education and safety nets as a small price to pay for their own self preservation. On the other hand, they haven't had much to fear from the lower classes for a long time now.
There are only three classes of people who oppose it: 1) people who oppose all redistributive programs, 2) people who favor the centrally planned farce of the existing welfare system because it allows them to covertly insert corrupt industry-specific subsidies into the system, and 3) people who don't actually understand how it works.
If the 1% favor it they must like income redistribution, dislike opportunities for political corruption, or not understand what they're asking for.
A basic income even eliminates the need to have a minimum wage, which allows people whose labor is not worth a living wage to nonetheless trade it for whatever they can get and still not starve.
A basic job is economically damaging because by definition the value derived from the work is less than the compensation (or it would just be a regular job). Which creates all kinds of terrible incentives where, basically, people choose the basic job over more actually productive work because it's government-subsidized and the real job isn't.
Working as a teacher and having a second job to subsidise the first is considered purposeful. Working as a teacher and receiving the rest of the income as UBI is suddenly no longer purposeful?
The pro UBI argument is:
UBI removes the incentive for people to work at jobs they hate. It gives them negotiation power. If people are looking for purpose in their work then arguably not being restricted by financial considerations is allowing them to find purpose and be more happy. People get to decide what purpose means to them. I believe this is what women are doing in exchange for lower pay.
The anti UBI argument is:
Someone must force their own definition of purpose on them and if they weren't forced to work bad jobs they wouldn't have any purpose at all. They need someone that "thinks" for them because they are unable to "think" for themselves.
I don't understand why people are pushing for redistribution of income rather than redistribution of goods like we pretty much did with utilities, public transport and, to a certain degree, internet.
The main price increase in the bay area has been housing -- rent is still housing -- and the reason for that isn't primarily incomes. It's artificial scarcity (from zoning) in the face of increasing population. In a normal market without the artificial restrictions, the fact that people are willing to pay a million dollars for housing would cause lots of new housing to be constructed which would bring the price down.
Incomes contribute, because if housing cost that much and people weren't making that much money then they would move out of the area (which would lower demand), but those prices would never be sustainable without the restrictions on new construction.
But more importantly, this is all about relativity. If Bob has twenty dollars, Alice has ten and Charlie has one, and you print three more dollars and give each person one, now there is going to be ~10% inflation because $31 used to exist and now $34 exists. But now Charlie has $2 which are worth as much as $1.82 used to be, which is less than $2, but he's still up $0.82.
And on top of that, a UBI doesn't actually create new money. Everyone gets a dollar, but it's because Alice paid $1 in taxes and then got it back and Bob paid $2 in taxes $1 of which went to Charlie. There is no new money to cause inflation, it's just redistribution.
In theory there could be relative demand shifts, if Charlie likes to buy different stuff than Bob would have, but unless that stuff is in limited supply, people will just make more of it. And if it is in limited supply, it still works as redistribution because it just means we're back to relativity -- even if things did cost more, it still increases the proportion of things that Charlie gets.
> I don't understand why people are pushing for redistribution of income rather than redistribution of goods like we pretty much did with utilities, public transport and, to a certain degree, internet.
I don't understand what "redistribution of goods" means. More free public infrastructure? There are good reasons to do that for natural monopolies like roads and utilities, but that's a completely different thing, and we can do both at the same time.
So picking 1% as the threshold was very ill-conceived because now it includes many expert professionals and small business owners. So it's very easy to relate to them if you are also an expert or small business owner.
Who is waging this campaign?
I don't think is a campaign to vilify the 1% as much as it's an increased awareness by the 99% that no one needs to be making $800,000 a year. As people see home ownership being increasingly implausible, healthcare difficult to afford, fulfilling work unable to be found and less than $1000 in savings, is it any wonder people are upset, bothered and judgemental of people who make an impossibly larger amount of money than 99% of people?
>that no one needs to be making $800,000 a year.
And that's where the mistake is. A significant number of people (including me) are fine with someone creating a company, selling it for a few million, or just having 10 good years of operation and retiring. The rewards for creating something new need to be worth the risk of complete failure and loss of income for those years.
This is the problem with using 1%. The bottom of the 1% is filled with normal professionals that took huge risks (starting businesses) or spent a significant amount of time in training (brain surgeon).
>As people see home ownership being increasingly implausible
Not if you give up on living in the most expensive parts of the US. Even then, a housing shortage is hardly attributable to income inequality. Just look at the bay area where there are people making good money. The housing shortage has caused prices to sky rocket to absorb up all of that difference. If you have 1000 people fighting for 100 houses, 900 people are going to get screwed regardless of income inequality.
> healthcare difficult to afford,
A broken healthcare system can't be fixed by fewer rich people.
>fulfilling work unable to be found and less than $1000 in savings
Capping incomes of successful professions will not add more fulfilling professions nor will it increase their savings.
>Who is waging this campaign?
Well people like you who claim nobody needs to make a lot of money and then blame a bunch of unrelated issues on income inequality. I can't tell if it was just the mathematical ignorance of who started the movement or if it was partially orchestrated by the super-rich. But by making it include skilled professionals that had to put in huge risks to get where they are, they lost significant support of the population within 50% of that income.
>is it any wonder people are upset, bothered and judgemental of people who make an impossibly larger amount of money than 99% of people?
I don't know what "impossibly larger" is supposed to mean in this context. Someone who makes $250k will not see someone who makes $500k as making an "impossibly larger" amount of money than them.
If this whole movement had been more carefully crafted to exclude people that had to go to medical school and go $350k into debt, I don't think there would have been very much disagreement from a significant chunk of the US. As it stands, it just looks like an arbitrary cut-off screwing the people who managed to secure a good life rather than being focused on people with enough money to hire full-time Washington lobbyists.
The link references data from 2014.
> The rewards for creating something new need to be worth the risk of complete failure and loss of income for those years.
New things are not inherently valuable by virtue of being new. I don't feel that we ought to reward people who for merely creating things that are new. And why should anyone be rewarded beyond having a comfortable, easy life? $465,000 is an insane salary, magnitudes larger than is required for a comfortable life.
> Not if you give up on living in the most expensive parts of the US.
You're thinking in a narrow context. For someone like me who moved from the midwest to the west coast, yah, I could just go back "home". The larger issue however is that, to borrow a tired phrase, it takes a village to raise a child. The jobs that make a city work are largely not high-income earning jobs. That is: paramedics, firefighters, teachers, bus drivers, road repairmen, linemen, auto mechanics, delivery drivers, locksmiths, and on and on. Much fewer of these people are transplants than the high-earners and don't have support networks in those cheaper parts of the country. Creating cities where only the wealthy can afford to live necessarily, forcefully pushes other people out.
> Even then, a housing shortage is hardly attributable to income inequality.
While I agree that it's vital to build enough housing for the demand, there is one reason alone that a house can cost $600,000. That is because someone has ~$120,000 in liquid, spendable cash. If everyone had only $1000 of cash, how much could a house possibly cost.
> A broken healthcare system can't be fixed by fewer rich people.
I agree, the healthcare system is broken and the problem isn't for lack of money. But when you see politicians attempting to gut medicare for tax breaks for the rich it doesn't little to instill confidence that that money could be better spent.
> Capping incomes of successful professions will not add more fulfilling professions nor will it increase their savings.
I agree.
> But by making it include skilled professionals that had to put in huge risks to get where they are
"Huge Risks"? If you have stories about skilled professionals who risked their security and failed I'd love to hear them.
> I don't know what "impossibly larger" is supposed to mean in this context. Someone who makes $250k will not see someone who makes $500k as making an "impossibly larger" amount of money than them.
Sure, but someone who makes $45,000 is likely to see $100,000 as impossibly larger. Referencing the professions I listed above, can those skilled professional expect to make $250,000 a year in their profession?
> If this whole movement had been more carefully crafted to exclude people that had to go to medical school and go $350k into debt
While I only know a handful of people who have gone to medical school or law school, the path to repaying those loans seems to be pretty straightforward and perhaps a little nerve-racking at times, but I don't know anyone who's gone destitute as a result of those loans. Also, I'm critical of a system that puts the burden of risk on the individual for training individuals to do those important, necessary jobs.
Their risk-taking isn't what we ought to be rewarding, it's the value that those professions bring to the general population.
These problems are all intersectional. Is it the fault of rich people that there are poor people? Often not, in some cases yes. There have long been abuses of the lower economic classes by the higher economic classes. I think one the largest problems is how quickly wealthy people lose solidarity with lower earners and believe that it's their "hard work" that got them their wealth. People stuck in lower incomes know how ignorant that belief is. It's also exceedingly difficult for a person living paycheck to paycheck, raising a family or caring for dependent parent or whatever, to solidarity with someone who was in a position to go to med school or study law. Anger is often misplaced and I agree that the delineation between the %1 and the %99 percent is often fuzzed, but that doesn't make the anger an less real, any less meaningful.
I suppose you will be heading up the committee to decide the value of what people do for the community.?
If only there were some automatic way where the markets could decide what is valuable and what is not.
Then reference correct newer data.
>New things are not inherently valuable by virtue of being new.
If people don't think they are getting value out of a business's product, people will not pay for it and the owner won't be rewarded. Markets 101.
>And why should anyone be rewarded beyond having a comfortable, easy life?
Tall poppy syndrome. Why shouldn't we strive for people to have paths to easy lives? Attacking the 1% just strikes down people who have done well without improving everyone else.
>$465,000 is an insane salary, magnitudes larger than is required for a comfortable life.
You assume it's sustainable for life. These people are not clock punchers working for some government with no budget limits. If you run a business it could lose money for a year and your salary could easily be < $0 if you are keeping it alive. If you are a highly compensated professional and lose your job due to industry collapse or even just industry, you might not find a job for years. Have you ever even considered that or do you assume salaries just flow the same every year?
How about the fact that a medical student has to throw away ~12 years of earning potential and accrue debt with interest?
These are all massive risks that these professionals take and that's the reason they are compensated the way they are. If it was so easy there would be a big supply of them and they wouldn't be so well compensated by buyers. Markets 101.
>Creating cities where only the wealthy can afford to live necessarily, forcefully pushes other people out.
But you are part of the problem by choosing to live there and competing for the shortage of housing (either via rent or purchase). The Midwest isn't having those problems and it isn't due to a lack of rich people. There just isn't such a strong NIMBY culture there that prevents housing being built and there isn't a giant influx of millennials moving into them as if they are the last place on earth.
>While I agree that it's vital to build enough housing for the demand, there is one reason alone that a house can cost $600,000. That is because someone has ~$120,000 in liquid, spendable cash. If everyone had only $1000 of cash, how much could a house possibly cost.
This is absolutely false. People can get loans with much less than 20% down and they can go in with family members/friends on a mortgage. If everyone only had $1000 cash and there was a housing shortage, the house would go to whoever was the most desperate by taking out the largest loan (with a group if necessary). Housing costs would continue to squeeze the life out of the community because there just aren't enough houses and people are competing for them (see the pigeonhole principle).
>If you have stories about skilled professionals who risked their security and failed I'd love to hear them.
Have some imagination. Every single medical student for one. They can finish medical school/residency with life crushing student debt, screw up, and nearly immediately have their license revoked. Or they can just fail school right at the end. Not only did they throw away their 20s, they now have significant student loan debt that is extremely difficult to discharge in bankruptcy.
If you don't think small business owners put in any risk, I suggest you try to get a small business loan from a bank without putting a bunch of your own savings in as collateral. 99%+ of small businesses don't get showered with VC money, they have to go the loan route because they aren't "changing the world".
>Sure, but someone who makes $45,000 is likely to see $100,000 as impossibly larger.
Nope, this comes up in professions like truck driving, mechanics, etc all the time. The difference between those two is usually just deciding offer your services as a contractor with the risks involved rather than working for a big company directly. A plumber running his/her own business making $100k isn't news, neither is a plumber working for roto rooter making $45k.
>Referencing the professions I listed above, can those skilled professional expect to make $250,000 a year in their profession?
Yes, by starting their own businesses in their professions. Of course not all of them will be that successful and that's the risk I refer to. However, a small plumbing business (~10 full-time journeyman plumbers on staff) can easily bring in way more than that to leave enough for the owner to get $250k.
>Their risk-taking isn't what we ought to be rewarding, it's the value that those professions bring to the general population.
We aren't rewarding pure risk-taking. People that take risks without providing some kind of value won't have customers and won't be rewarded. People get rewarded for identifying something they can provide at a cost lower than the market will pay for it.
>People stuck in lower incomes know how ignorant that belief is.
That's also just propaganda. There is luck involved, sure; but there is a significant amount of aptitude and perseverance required to climb the income ladders and maintain a steady income. If you convince yourself early on that it's only luck, then you just destroyed your future.
> but that doesn't make the anger an less real, any less meaningful.
When you ask protesters if they are upset with college professors (a married couple of Stanford professors will clear $600k), brain surgeons, the dude that owns 3 local in-n-outs, etc. they will almost always say no. But they are clearly right in the 1%. That's why myself and others can't get behind outrage towards the 1%. It's misguided and destructive class warfare against the wrong class. Focusing on the other issues causing outrage is a much better use of time.
I'm upset when natural disasters occur, but I don't blame anyone for them. I'm upset when it's too cold outside, but I don't blame anyone for that.
The problem is that, when it comes to the economy, people for some reason think that it's nothing like a force of nature - they (sometimes subconsciously) assume that if one person is rich, that means another person is poor. Or even, that if someone is rich, than that has something to do with whether she "deserves" it. That's close[1] to being as nonsensical as asking if someone "deserved" to die in a hurricane.
[1] I write "close", because this only applies in a good capitalist economy. There are of course ways to cheat, whether by directly stealing money from other people (in which case you'd go to jail in a well functioning society), or by changing the laws to benefit yourself (which is a subversion of the capitalist system, but it can happen. It's not what people are usually complaining about though).
https://ballotpedia.org/School_board_elections,_2016 https://ballotpedia.org/Money_in_local_elections_(2016)
It's not a zero sum game. Just because the 1% benefit from a particular policy, it doesn't mean other non-1% people supporting it don't benefit as well.
What was labelled the "death tax", which somehow became a grassroots issue, was taxes on inheritance over roughly 5 million. It's now doubled to 11 million with the new tax bill. This is not in the interest of well over 99% of people.
If I benefit from something, it doesn't bother me at all that someone benefits even more. Should I forfeit my benefits out of spite?
> What was labelled the "death tax", which somehow became a grassroots issue, was taxes on inheritance over roughly 5 million. It's now doubled to 11 million with the new tax bill. This is not in the interest of well over 99% of people.
Maybe people feel it's fair to get to pass your wealth onto your children and that if they were rich they would support this idea. There's something to be said about sticking to your moral values and not being a hypocrite especially when what is being debated is having the state take a private citizen's money away from them.
1: http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hop...
At any given time a person is more likely to be a student, in an entry level position, or retired, than be at the height of their career.
39% in the top 1% is still an overestimate, but it's probably not far wrong to say that 39% of people will at some point in their lives be in the top 5%.
The problem is with using "1%" as the threshold, because that just means you and your spouse are successful professionals at the height of your careers, when the real problem is the top <0.001% and, even more than that, the accumulating wealth of large corporations relative to individuals.
1: https://www.investopedia.com/news/how-much-income-puts-you-t...
2: http://equitablegrowth.org/research-analysis/u-s-top-one-per...
Senior Associate Attorney: $239,270
https://www.glassdoor.com/Salaries/senior-associate-attorney...
Senior Physician: $225,076
https://www.glassdoor.com/Salaries/senior-physician-salary-S...
This is also not at all out of line with what trade professionals like electricians are making when they start out on their own but by the time they retire have half a dozen people working for them.
Those "one time" activities will all temporarily boost your AGI, meaning people come into and out of the "top 5%" brackets pretty regularly. It won't get you into the top 0.001%, but could easily boost what you think of as a "normal" two-income couple into the top 5% or 1% at some point in their life.
What’s most amusing to me are the 19% who think they are currently among the top 1%. That’s just math fail.
You may disagree, but many people do have priciples that include private property rights, limited government, and flatter tax schemes.
Btw, I don't see being "selfish" as a bad thing or value judgement. It's kind of what we do as humans.
http://www.epi.org/publication/the-state-of-american-wages-2...
The Bloomberg article didn't even mention whether the changes were adjusted for inflation (they are).
http://www.smashcompany.com/philosophy/do-men-become-warlike...
Also, consider that, when it comes to death-by-childbirth, the USA is among the very worst developed countries:
https://maternityneighborhood.com/the-case-for-care-model-in...
https://www.minneapolisfed.org/publications/the-region/where...
And an increasing share of wages going to the top income brackets isn't in itself cause for concern, only if the members of the top income brackets are largely static does it matter (since it means income is going to a small group of individuals, rather than a broader group of individuals who are swapped in and out of the top income groups).
So these statistics are hardly "disturbing", though they do merit further research to see how much of a problem these things actually are.
“We have reached a tipping point. Inequality can no longer be treated as an afterthought. We need to focus the debate on how the benefits of growth are distributed. Our report ‘In it Together’ and our work on inclusive growth have clearly shown that there doesn’t have to be a trade-off between growth and equality. On the contrary, the opening up of opportunity can spur stronger economic performance and improve living standards across the board!” OECD Secretary-General
http://www.oecd.org/social/inequality.htm
Hmm, I wonder ;-)
edit: We know that the USA ranks lower than almost every other OECD country in terms of social mobility, see pages 4 and 5 of this slide deck: https://www.oecd.org/eco/growth/NERO-22-June-2015-income-ine...
Also, measuring mobility by income quintiles is challenging as quintiles aren't the same across countries. You could move from 1st to 4th income quintile in one country and have a higher wage than some moving from 1st to 5th in another country.
Actually I have to disagree, a bifurcation in income is reason to worry in itself. In a society where everything is commodified this wealth gap allows the rich to opt out of normal civil society. A society where a small few can buy their way out of a crap education system, out of a crap healthcare system, etc. isn't just no matter how well we swap people in and out of that group.
But that's not the world we live in. Most people don't get windfalls and have little savings.
We could end education and healthcare inequality today by shutting down all the good universities and banning all good health insurance. But that’s backwards.
Yes but that's good.
>Engineering greater total suffering so that you don’t have to be indignant at others suffering less, is not exactly noble.
I actually think it would reduce total suffering, just that it's a short-term vs long-term thing.
>We could end education and healthcare inequality today by shutting down all the good universities and banning all good health insurance. But that’s backwards.
You're sort of close to what I want but not quite. We'd shut down all education systems which allow you to buy good results, same for healthcare, it's not about absolute quality it's about the relative quality in exchange for dollars.
My point is that when you drag everyone into the same crap system, the most powerful in society who currently get to opt-out are stuck as well. They're forced to advocate for systems which are universally better rather than advocating for systems which are selectively better. By changing the incentives this way we stick everyone on the same side, inside of one side against another, it's better for everyone.
So a society in which there's competition to be among a handful of feudal lords, but where everyone else suffers tenuous and desperation is unconcerning? How so?
We've been through this in American history. It was called the Gilded Age and it was a nightmare for all but a handful of robber barons, resulted in widespread social and political instability, and violence.
From the linked wikipedia article:
"It broadly rejects egalitarianism and the view that history shows inevitable progression towards greater liberty and enlightenment (thus, it is in part a reaction against "Whig historiography").[1][2] The movement favors a return to older societal constructs and forms of government, including support for monarchism or other forms of strong, centralised leadership such as a "neocameralist CEO"[3] of a joint-stock republic,[4] coupled with a right-libertarian, conservative or other approach to economics."
How much of this "neo-feudalism" shares with actual feudalism is not clear to me.
See
https://www.thedailybeast.com/californias-new-feudalism-bene...
https://www.nationalreview.com/2014/07/new-feudalism-fred-ba...
https://www.huffingtonpost.com/john-w-whitehead/the-age-of-n...
Nevertheless, feudal Lords did competed among each other and parent talked about competition not about wage.
There may be lack of mobility along with income inequality, but the article doesn't demonstrate it.
I'm not sure how you can't be arguing the same thing I am. The income inequality is what creates the immobility. This is demonstrated by other developed countries where there is less income inequality and greater social mobility, as others have pointed out. Can you elaborate?
Uh... The industrial revolution.
You seem to be confusing wealth inequality with income inequality which might be muddying your arguments.
PS: Don't forget the median US home is only worth $188,900, which means 1/2 of them are worth less than that.
The article doesn't demonstrate it because that is not the goal of the article. But it is happening nonetheless:
https://phys.org/news/2017-04-upward-mobility-fallen-sharply...
http://www.businessinsider.com/social-mobility-is-on-the-dec...
Second, I think it's still a problem if the income of 90-98% of the country stagnates for decades, while the top earners get higher and higher income. Of course that affects inequality.
I'm also not sure it matters that much if the players at the top switch around if they have increasingly larger leverage on society.
For instance, we're seeing CEOs get rewarded larger and larger amounts of money every year, even if the companies lose money, like in this absurd case:
https://techcrunch.com/2018/02/22/snap-ceo-evan-spiegel-got-...
Where's that money coming from? The employees' potential salary increases? The retail investors' money? It seems to me that the rich keep siphoning off money from everyone else, and that's not sustainable.
They also get larger and larger amounts of money even when they get kicked out of the company for failing. This doesn't make sense to me at all. And I think the excuse that they need such amounts of money or otherwise they wouldn't take the job or something is utter BS. I'd more likely believe the board is giving them the money so the CEO doesn't sue the company, or better yet because the CEO was the one writing their checks before that, or something along those lines.
And this is just the corporate world. The US Congress seems to get crazier every year and listening more and more to corporations and their interests, and less and less to the people and solving real problems in the country (healthcare, infrastructure, etc).
It's like the whole American society is on the brink of collapse, and everyone just doesn't know it yet. Eventually, people will "suddenly" start to violently riot because of all this stuff added together, and it won't be pretty.
Let's say we've got a feudal society with dumb nobility that rules over a smart peasantry by force. If that society becomes free, we'll expect smart peasants to move up and dumb noblemen to move down across the first few generations... but once they've moved, they've moved. Ergo, declining social mobility.
There's an extreme amount of assumption baked into that.
1. Genetics is the only factor that determines merit for wealth?
2. Genetics merits extreme differences in income/wealth?
2. We're talking about social mobility, not the level of inequality.
1) One does not have to be intelligent to be wealthy.
2) Those born wealthy do not have to be intelligent to remain wealthy - they just need not be a consumeristic imbecile.
3) Genetics has such a small impact, if any, on social mobility - quite the opposite. If I am born a Kennedy I am more likely to never fall below my birthright social class because of my family lineage.
4) You contradict yourself. You say the nobility rules by force, then immediately follow that with "If that society becomes free" - how exactly would that society magically free?
2. 70% of rich families lose their wealth by the second generation, 90% by the third. [A]
3. IQ is a greater predictor of income than parental SES. Someone in the 95th percentile for IQ has a higher EV for earnings than someone born into the 95th percentile for wealth.
4. A number of revolutions have happened. If you don't believe that modern France or Japan are freer than their feudal predecessors then I agree that we are probably not on the same page.
I've seen the statistic quoted in so many places, yet have never found a link to the actually study. No info on sample size; we don't even have a definition of 'wealth' used in the study.
[1] https://www.wsj.com/articles/SB10001424127887324662404578334...
The big economic question of the day should be asking how we've managed to keep wages at only the "stagnation" level rather than precipitously falling in the face of so much downward pressure.
If you were happy with the income equality from a century ago, I'm willing to adopt the welfare and tax systems of that time so all the incentives are the same.
1. Demand is not perfectly elastic
2. Demand is perfectly elastic, but supply was increased more on the lower end of the income range which reshapes the income distribution.
3. Trade policy reduced demand in the middle of the income range.
1) What is mobility? The ability to move out of the lowest income group? How easily does that happen? If it's quick and easy, why doesn't everyone do it? And what about the reverse? How easy it for a person to move from a median income back into the lowest income. I think the idea of mobility is used as a reinforcement for the protestant work ethic / American dream sort of delusion that says "poor people can just work harder and save more and they won't be poor any more". But we have an enormous amount of evidence that points to that not being the case.
2) Also, you haven't provided an argument for why income inequality isn't a problem. If the lowest earners have extremely limited access to housing, healthcare or education, such as is the case in the U.S. I think that's a problem.
Many people do when they retire. Or when they take time off between jobs (intentionally or not).
As an American, I've always based a lot of national pride on our history as a (relative, for some groups) meritocracy with a lot of mobility. It's really sad to see rapid erosion of this over the last 20y.
https://www.theatlantic.com/entertainment/archive/2017/06/th...
It was also associated with the immigration of tens of millions of impoverished people, which is part of the reason for the massive inequality numbers - the population doubled during this period.
Humanity can accomplish great things without dehumanizing or hurting most of the population, and being critical of the morality of these systems is a big part of that.
I don't agree with that at all, and I'm not sure I would if I had to pay that cost myself, either.
Also, it's not that odd. It's a direct response to the criticism you levy - that these things are not worth it. How are you to judge if you only take the immoral acts in a vacuum? You brought up slavery again; their conditions were not slave-like, simply impoverished.
I agree that it's a good idea to question whether periods of chaos, destruction or immorality are actually necessary for progress. It's been pretty much taken as a given since Hegel, but it's a good thing to verify and even within those boundaries there may be some behaviors we can effectively limit while leaving the good bits.
As to your final argument, I don't actually know if that's true, but it's immaterial because that's not how people have done it.
I sincerely doubt the people making all the money were not doing it because the poor people they were exploiting (or killing) might eventually get iPhones or penicillin
I also don't know why I can't criticize the conditions resulting from policies in the gilded age because there's a chance that the policies were maybe not "soley intended to have malicious consequences". Again, things aren't black and white. "Modern tech is nice" and "poverty is bad" are not diametrically opposing ideas.
I'm confused by what you're arguing here. People want to reduce inequality, and you're argument seems to boil down to "nothing really matters anyway" or "maybe them being poor is for the best" (which you insist is something we can never actually find out..?) If you're saying that human nature is inherently corrupt and humanity can't unite to make progress for broadly selfish reasons, I might actually agree. But talking about how this is shitty and / or how to fix it doesn't seem pointless, either.
You started out saying a moral person would say that the positive consequences of the gilded age were not worth its negative experiences. I disagree.
You then say: "Ignoring that it's very odd to retroactively justify immoral behavior because of unintended, positive side effects: I'm saying that being critical, like asking if the slave-like conditions of most of the population were actually necessary, is a pretty reasonable thing to do."
By saying this you are effectively saying that I am defending immoral behavior with the misconception that such behavior directly led unintentionally to positive consequences. I don't think that, and I'm not doing that. I'm specifically saying that removing 'robber barons' from the equation entirely removes both the positive effects and actions and the negative. The positive and negative are done by the same person, but the actions causing them were entirely different. This isn't simple, as you continue to point out (while, it seems, attempting to simplify it entirely)
People want to reduce inequality - ok, how? I think that's important to figure out. What kind of inequality? Wealth or income or some other kind? What is the consequence of inequality?
To find out, we need to view history as a complex thing and understand both the pleasant and unpleasant, as well as their consequences. Conflict has been a powerful tool, historically. The excesses of one group have often given rise to conflict with another group, which then created a system of greater equality. Could that have happened without the conflict? I'm not sure, I don't have many examples where that happened and a ton of examples where it didn't.
There are a lot of times where people did awful things and they either didn't result in positive consequences or what was positive was not worth the loss. The Gilded Age? Probably not one of those times.
Put another way, it's very easy to prove that without robber barons we wouldn't have had many of the terrible abuses during the Gilded Age, and also very easy to prove we would have had worldwide improvements in the human condition even without the robber barons.
No robber barons mean no railway expansion and no massive expansion of jobs west, so no immigration boom. Robber barons are also responsible for financial regulation, futures markets which allowed for much greater predictability and sustained farming output, increased ties to Europe and specifically the UK over Germany, the massive increases in production brought by low oil prices and standardization of performance, arguably unions and labor reforms and a standard wage.
Capitalism in the US has created more wealth and lifted more people out of poverty than any other nation in the history of mankind. Your statement applies to third world countries... not the United States. Oh, we're also the most free and most prosperous nation ever. That helps.
citation needed
>Oh, we're also the most free
https://en.wikipedia.org/wiki/List_of_freedom_indices#List_b...
>and most prosperous nation ever
https://www.cnbc.com/2015/11/02/the-worlds-most-prosperous-n...
Side note: "most free nation ever" is a total fiction as part of American exceptionalism. For just one example out of many, there are still religious blue laws on the books in towns across the country, and many are still enforced.
*Peaceful here means there ability to do something that doesn't harm others. We can start deep diving on the value of having a quiet day, but the idea that you can't buy a bottle of Gin on Sunday is a choice some people might not find is worth the quiet
You mean, like, people who did productive business? How dare they!
To be fair, he did say it's concerning if the top income brackets are static, so as long as we shuffle out our feudal lords from time to time, we should be okay.
For example:
http://money.cnn.com/2016/01/07/news/economy/top-1/index.htm...
Also, the 1% in this article is not even defined. After some digging it looks like it is Gross Adjusted Income. There are CEOs who wouldn't be considered in the 1% because they take salaries of $1 while making millions in stock options - it is such a ridiculous metric.
Inequality is about wealth as much as, if not more than, wage.
It was a time of massive improvement in the standard of living across the board. You can see this objectively in annual statistics on infant mortality, longevity, and average height.
The industrialization of America was not producing luxury yachts for the overlords. It was producing consumer goods for everyone.
Is it helpful in a discussion like this to use exaggerated rhetoric? Wealthy people aren't in any meaningful way feudal lords.
"everyone else suffers tenuous and desperation"
But that doesn't describe Americans either, where absolute poverty levels are below 3%.
https://www.forbes.com/sites/timworstall/2015/09/17/americas...
I didn’t say anything about forcing anyone to work or subsidizing habits. I think these charts are trying to claim that discrimination is happening and if how much someone is working isn’t taken into account, they don’t support that claim very well.
To be clear I’m not stating that discrimination is or isn’t happening. I’d just like better data.
I mean these comments talk about it as if kids and work around them had zero to do with men and we're some kind of female hobby. Among some men it is so as they don't care, but many men do actually care and do spend time with them.
If that has a impact on the economical state of everyone involved is up to debate, but there is a distinctive difference.
Also, male incarceration is much higher then female one, that is another difference that should push income the other way round. And some babies without fathers are due to incarceration and people in prison are not earning all that much.
I mean, I get argument that women are more likely to do kids work and more likely to say no in work because something kid related, but it kinda rubs me wrong when people talk about kids and female only thing. I see too many good caring fathers around me and also fathers who did made choice to spend more time with kids in expense of career. They deserve a bit of recognition too.
I generally agree with this line of thought, but you're also missing the higher level question: why, in our society, do we have to control for women who have children, but we don't have to control for men who have children?
Edit: Basically you have to control for what's causing women to work less when the have children. And the obvious answer is because if you're a woman it's hard to work when you have a child at home. If you're a man that's not really true since typically your wife/girlfriend takes care of the child. You can argue that maybe men should take more responsibility for raising their kids, but that's more of a social/political issue than an economic one.
Just as if I chose to go live in the wilderness, it would only make sense that my income would drop. No one would be at fault and I wouldn't expect the government to make up the difference for my "lost" income.
Your first paragraph applies equally to men - but men are statistically less willing to sacrifice extra income to focus more on familly. Maybe men should not have children (?!).
Nevertheless, ignoring judgemental moral in previous paragraph, it does not make theoretical "men with children earn less" something that needs to be discussed as not economics.
Cant they control democracy via increase access to speech though wealth.
Yes it is, history teaches us that it leads to dissastisfaction and in some cases violent revolution.
The real problem is that we don't have equal opportunities. That gives the rich people a huge advantage when it comes to earning more money. We don't need to tax the rich more, that doesn't really help you when you're poor. We need to wisely use the money that we already have to create more opportunities for everyone.
The point I'm driving at here is that income equality, by itself, isn't automatically desirable if the cost is a worse standard of living for the poor.
It makes perfect sense that income inequality would increase due to globalization. The economic ramifications of "correct" business decisions are amplified by orders of magnitude when compared to mercantilist economies a few hundred years ago.
And income inequality actually is a problem even in and of itself, even without reference to absolute living standards. There's an increasing body of research that higher inequality in a society lowers happiness and increases resentment, ultimately undermining social cohesion and trust in government.
Today's 25th percentile person is likely to have air conditioning, refrigeration, internet, a cell phone, a microwave oven, an HDTV, and a reliable car that needs very little routine maintenance and has air bags and antilock brakes.
Today's 50th percentile is beating 1950s 75th percentile adding easy, affordable, safe, and reliable air transportation and living in a far larger house than their 1950s half-again higher counterpart.
Today's 75th percentile is beating the 95th percentile in 1950.
All of them have better health care options, and a longer life expectancy.
Real wage growth may not have arrived for those who trade their hours for wages, but the standard of living available from those wages has risen dramatically.
I think their societal structures are much better suited for the technologically advanced world we live in today.
Also, those are all very homogenous cultures. I don't think you can map what works there onto a very large, very diverse place like the US.
Yes, those of us in software can just be smart and work hard and be successful, but millions of others will not be, and it will be harder for them to get to where we've gotten to. Telling them to suck it up and "work harder" is exactly how you get wealth distribution, in fact. On terms you really won't like, just ask the Romanovs.
Millenials are the first generation in a long time to be worse off than their parents, and no, it's not because of avocado toast or iphones alone.
The "temporarily embarrassed millionaire" rhetoric is indeed meant to frighten, but your "anyone can make it if they work hard" is so mid-to-late-20th century Reagan-era rose-colored-glasses adorable, it's positively quaint. Let's just ignore automation and globalization and supply outstripping demand and tell those lazy kids to just get a job, eh?
Everytime I see this proposal it's of the "burning bridges" type. To ensure that everyone starts at the same crappy starting position. There are never any considerations what to actually use the tax revenue on. It's only intended purpose is to take away money from the "evil" rich parents. The justification is that the income is unearned but the flaw with this type of justification is that the parents clearly earned the money and paid taxes on it.
So far I haven't seen any proposals to redistribute the money to actually decrease inequality other than by making everyone equally poor. How about distributing that money back either in form of a UBI or some kind of trust fund that children can withdraw from at the age of 18. I haven't seen anything like that and therefore I'm against a 100% inheritance tax.