Income inequality in the US

Not all see this as a bad thing, what is remarkable is how extreme the US is compared to other countries.

While many of the suspected drivers of rising income inequality—globalization, technological change and the rising value of education—affect other nations as well, few have seen as stark a rise in inequality as the United States. From 1968 to 2010, the share of national income earned by the top 20 percent rose from 42.6 to 50.2 percent, with gains concentrated at the very top. Meanwhile, the "middle class," the middle 60 percent, saw its share decline from 53.2 to 46.5 percent. This increasing income inequality is captured by the steady rise in the U.S. Gini coefficient, from 0.316 in the mid-1970s to 0.378 in the late 2000s.

Today, the U.S. income distribution is one of the most uneven among major developed nations (PDF).

https://www.cfr.org/backgrounder/income-inequality-debate

The article is four years old, its probably worse now.

 

Who cares what you make or what I make. Who cares if you amass a fortune and I don't. If you are envy of large incomes do what it takes to make yourself valuable enough to demand a sizable income. Simple investing at an early age can make a person financially comfortable when they retire. Those who bring up income inequality should state why they make the point, what they think about it, and what if anything they propose to do about it.

 

I care obviously or I would not have posted this. I think its morally wrong for some to enjoy huge incomes while others barely have enough to eat. Regardless of moral issues, income disparity has broad economic and political effects. The stability of the US is declining due in large part to the large growth in income stability. Class conflict and the break down of the political process is one part of this. And as income shifts from wages to capital the gap between the ability to buy goods and make them generates some of the most serious economic problems - structural deflation.

I respectfully disagree that small investments are going to make huge results. Most people have a difficult time keep a house and food to invest.

 

Is there a particular reason 1968 was chosen? Was it to skew the analysis to achieve the desired result?

Why not examine the period 1940-2010 or 1950-2010?

And 42 years is a bizarre period. Normally, 10 year periods are used, unless one intends to skew the data.

The GINI coefficient is a nonsensical measure of nothing.

So what if it is? "Income inequality" is irrelevant. The Left-wing harps on it, because a force called The Jealousy is strong with them.

 

What we have a problem with is inequality in work!!!!!!!!!!!!!!!!!!! Some perfectly healthy drones are lazy *astards that dont want to work at all.

 

Most economist would not agree that the Geni coefficient is nonsense. Regardless, disparity has gone up however its measured.

The specific years chosen don't change the basic results. I have seen this analyzed many different ways using very different starting points. The real increase in disparity actually began in 1980.

 

I suggest comparing income disparity between full time wage earners. Ignoring that much of the income from the top one percent was inherited.

 

You care? So do you propose a solution? Or do you feel a "moral high" for just bringing it up? Would you like to see the government set all wages? If you care you need to think through what you see as a problem.

Most people? Our government already helps people with a house. Most people I see are overweight -- eat less and use the spare money to invest in a mutual fund. Too many people think ahead only as far as the weekend and a BBQ with lots of beer. To invest you have to think 10, 20, 30 years into the future. Each individual is responsible for their own potential to earn a living. They must help themselves.

 

Income disparity in the United States has been growing for decades. During the 1950's, a top CEO's pay was perhaps 100X of the workers. Today, the differential runs into the thousands. The impact on a nation's economy with such a disparity is reflected in stagnant consumer spending and concentration of wealth. Taken to extremes, enormous country clubs dues and mega mansions comfortably coexist with a stagnant middle class, homelessness, and poverty. The social impact is one of a "them vs. us" division, something we increasingly see today in modern America.

HIstoricaly,America and other G-7 nations deal with this is though implementation of progressive taxation. Tax structure in the U.S. changed dramatically since 1960 when Kennedy made an historic tax cut favoring the wealthy. Tax cuts, coupled with self-serving "trickle down" beliefs have done little more than concentrate wealth further and drive up budget deficits. The most recent tax cut has done nothing but increase the problem.

The solution is to put the tax tables back on track to accept and reflect the fact that the level of increasing income disparity is dividing our country among rich and poor with a dwindling middle class, a sure recipe for trouble.

 

Your solution to tax achievers and reward under-achievers is ludicrous. The freedom of America gives each of us the opportunity to accumulate wealth or accept the humble circumstances of our lackadaisical ways.
(More than four in 10 American households (44.3%) — or upwards of 76 million — didn’t pay any income tax to the federal government last year, according to data for 2016 from the Tax Policy Center. This year that number is expected to be roughly the same, at 43.9%. Most of these people aren’t paying income taxes because they either don’t have any income that is taxable (many fall below the poverty line), or because they get enough tax breaks and don’t owe the government money. Common tax breaks include the child tax credit, the earned income tax credit (EITC), and the exclusion of some or all Social Security income, explains Roberton Williams of the Tax Policy Center.)

 

You make the mistake of many conservatives. The progressive tax and inheritance tax are not about money. Never have been. You're achievers vs. underachievers is pure talking points. They ignore the fact that much wealth in America is inherited and that many that pay no INCOME TAXES are middle and lower middle class Americans. That includes underachievers like police, fire, janitors, teachers, nurses, enlisted military, service providers, technicians, NASA support personnel, customer service, and do I really need to go on. The message here is to think outside your box.

The progressive and inheritance tax were established early in our history to prevent the establishment of a permanent aristocracy like Europe. That's it. Too bad we decided to move in that direction.

 

I can't think of a metric I care less about.

 

Such levels of income and wealth inequality have been shown by many studies to be very detrimental to freedom, democracy, fairness, safety, health of the nation, and national security. So assertions that "it's nobody's business what anyone earns" is BS at least; propaganda at worst, and a contribution to the demise of the USA.

 

I think that was the first year the FED started to measure it.
It's a little over 41 now.

 

Don't you care that some people are incredibly lazy?

 

No, good for them.

 

Since you're not an American, who cares?

Worry about your own damn country and stay out of OUR business.

 

I do what I want. If you can't handle that you shouldn't be on the internet.

 

Well it's about money, and power. I don't use talking points, I use myself and many friends as examples. I for instance came from humble beginnings, was hungry as a young child, became a printer by trade, saved and invested, sometimes working two jobs, and retired at age 55 being financially secure. Many of my friends I grew up with are also financially secure. We worked hard, progressed in our occupations, and planned for our futures. And as a printer I paid income taxes every year.

Money inherited comes from the earner and who they give it to is none of the government's business. But I guess you think all money belongs to the government. When politicians see money they think of a new tax.

 

There are many things that affect this, not the least of which is a widening gap in motivation and productivity. We have and always have had some people who are driven to be productive and successful, to be Olympic-class winners. However for several reasons the motivation of the average person is declining- the have more interest in just getting by. The are victims of their own lack of motivation and of excessive procrastination. At the same time, automation both in industrial and IT areas has lowered the needs for skill, and the less motivated generally stick with the easiest path. Today we have a lot less craftsmen, and a lot more machine "operators" who basically aren't doing the real work. In many jobs, companies are using computers to replace what used to be personal skills. You can experience this when you call support lines or services in most companies- in place of the skilled person you used to talk to, you are handed to a much lower skilled person who has a computer program in front of them telling them what questions to ask and what answers to give. Even these are being replaced as quickly as possible with entirely computerized "technicians", using voice recognition and generated speech so good that many people never realize they are talking to a machine. Ask yourself how many times you have had to wade through multiple menus to get help, and then wind up talking to someone who knows less than you do.

There are two reasons for this. Perhaps the larger on is the people problem itself. It's hard to find people who have high skill levels and good work ethics. Education skills are falling- many people are relatively poor at basic math and spelling, for example. While higher skills can be trained, it is expensive to do so, and there is no guarantee the person will stick with the company that trains them. In addition, training people to develop skills is a bit like farming- if you don't have fertile soil to plant the seeds in, you won't get much of a crop. Attitudes are poor compared to those of 40-50 years ago, and without a good attitude, the employers options are very limited. Replacing a skilled person is difficult and expensive. Replacing a drone is easy and cheap. We have a larger number of people willing to be drones today, and the nature of business has found ways to use them with reasonable efficiency compared to the difficulties of hiring talent.

This makes talent valuable; it is harder to find, and more in need than ever. Thus, the gap in earnings widens, because the gap in productivity and value between people has widened.

Earning are a measure of your value in the marketplace. That is always in the hands of the individual, but many are looking at employers as social service agencies that are supposed to provide for them. It's a growing trend that is fiscally disastrous- there is simply no light at the end of that tunnel. It's a people problem, and it is individual- and so is the answer to it.

 

Trickle down.

 

This again? Income/Wealth inequality propaganda from the gov-edu-union-contractor-grantee-trial lawyer-MSM Complex as a justification for more and more taxation and growth of government is like car insurance companies lobbying for mandatory car insurance in this or that state... not... reliable. They are fraudulent advertising to a degree that private sector companies would be shut down instantly if they engaged in such.

Those proposing some wealth/income inequality crisis in the U.S. have a higher burden than linking charts and data from sources THAT RELY ON TAXATION FOR THEIR PAY, GRANTS, GOVERNMENT CONTRACTS, PENSIONS, PROMOTIONS, PERQS, ETC. Every single such "study" I've ever seen has massive holes in how "wealth" and "income" are calculated, and this is by design.

The fact is that the standard of living for average people in the U.S. has never been higher, and is far far higher than it was when I was a kid in the 1960s. We have shopping malls... that didn't exist then, specialty retail... that didn't exist then, casual dining where average people pay $15 or more for ONE MEAL... that didn't exist then. Our CHILDREN have more purchasing power than most of the world's countries have GDP, and not just "the rich" children based on how many average kids I see with cellphones today. Our celebrity class is rich to a level other countries couldn't dream of, and this is all fueled by MIDDLE CLASS PURCHASING POWER and LEISURE INCOME.

In the most pronounced, compressed technological boom in human history, AVERAGE Americans have cheap proliferated technological marvels that kings 200 years ago nor my grandparents could possibly ever dream of. Lifespans of those who manage not to abuse substances or live a sedentary life of diabetic leisure have never been higher.

Yes, the marvelous tech boom that has proliferated miracles to average people has made the innovators filthy, stinking rich due to VOLUNTARY transactions and commerce. GOOD! That's very healthy "wealth/income inequality." But surely, the answer to all this fabulous new technological wealth and other standard of living increases we all enjoy is more and more INVOLUNTARY taxation and government. Surely that will avert the "crisis."

How GULLIBLE are people who believe these hacks?

 

Why do you look at govt (or some other faceless and remote entity), and not the people?

China will overtake America, at some point. Given that, please take 5 minutes to compare the average Chinese citizen from the middle or lower classes to the average American citizen from the middle or lower classes. Notice anything different?

 

Here is an interesting set of graphs showing how income inequality damages a society.
As the rich get richer, (the top 4 Americans hold as much wealth as the bottom 150 million Americans) the middle class is constricting and the lowest class is increasing. Money is finite, there is not a replenishing cycle so that everyone if they work hard enough can be rich.

My biggest concern is we have arrived at a ‘too big to fall’ issue with the super wealthy - their incomes have become as large as some countries - while they are paying the vast amount of income taxes in the US, what happens when they say cut our taxes or we leave?

Anyone that thinks concentrated money isn’t an issue wasn’t paying attention during the bank bailouts.

 

I don't understand. Care to elaborate/clarify?