Income Inequality!

[Matt_W]

I wish those were percentages. As is, they’re kind of meaningless.

[Andy_Bates]

Yet another analysis that looks at income groups rather than income of actual individuals and families. People tend to move to higher income groups over time, and very, very few people in the bottom 50% in 1970 will still be in the bottom 50% almost 50 years later. So instead of the average income rising by $8000 over that time, it’s more likely to have risen by $66,000 (if they’re in the top 50% now) or $168,000 (if they’re in the top 10% now). But of course, those statistics don’t make for an attention-grabbing tweet.

And of course, I would be surprised if anyone in the top .01% in 1970 was still in the top .01% today.

[Matt_W]

For instance, here’s what it looks like if you use percentages of income:

Top 1%: average incomes rose by 350%
Top 0.1%: average incomes rose by 512%
Top 0.01%: average incomes rose by 655%
Bottom 50%? 141%

[Matt_W]

People tend to move to higher income groups over time, and very, very few people in the bottom 50% in 1970 will still be in the bottom 50% almost 50 years later.

We’ve had this discussion before, and you’re still wrong.

[scottagibson]

Bottom 50%? 141%

Bottom 50% is less than 50% increase, $8000 on a base of $19,000.

[Soapyfrog]

Yet another analysis that looks at income groups rather than income of actual individuals and families. People tend to move to higher income groups over time, and very, very few people in the bottom 50% in 1970 will still be in the bottom 50% almost 50 years later.

This is immaterial even if true to the central problem, and that is a rapid concentration of wealth into the hands of very few to the detriment of everyone else.

[Matt_W]

Bottom 50% is less than 50% increase, $8000 on a base of $19,000.

Right, I guess I quoted new income as a percentage of old income, not as an increase. Subtract 100% from all of those numbers.

[Andy_Bates]

We’ve had this discussion before, and you’re still wrong.

From the Paul Krugman article you quoted:

For example, Census data show that 81.6 percent of those families who were in the bottom quintile of the income distribution in 1985 were still in that bottom quintile the next year; for the top quintile the fraction was 76.3 percent. Over longer time periods, there is more mixing, but still not that much. Studies by the Urban Institute and the U.S. Treasury have both found that about half of the families who start in either the top or the bottom quintile of the income distribution are still there after a decade, and that only 3 to 6 percent rise from bottom to top or fall from top to bottom.

So Krugman mentions that the Census data shows that about 20% of people in the bottom quintile move up to a higher quintile within one year, and 50% of people in the bottom quintile move up over a decade. If half of people move up to a higher quintile within 10 years, then even more people will move up over a period of 50 years.

Yes, the article is talking about the bottom 50%, not the bottom 20%, but the point still applies (and is supported by the Krugman data you provided): People tend to move up in income groups over time. And the longer the time period, the more likely they are to move up.

[Stepsongrapes]

Yet another analysis that looks at income groups rather than income of actual individuals and families. People tend to move to higher income groups over time, and very, very few people in the bottom 50% in 1970 will still be in the bottom 50% almost 50 years later. So instead of the average income rising by $8000 over that time, it’s more likely to have risen by $66,000 (if they’re in the top 50% now) or $168,000 (if they’re in the top 10% now). But of course, those statistics don’t make for an attention-grabbing tweet.

Why is that relevant? We’ll always have (duh) a bottom 50% of income, whether it’s the same individuals, or not. Is the inequality somehow more okay if it is different individuals? By definition, the majority of the bottom 50% aren’t moving up to the top 1%.

[scottagibson]

News report: The wealthy are killing and eating babies.

Andy Bates: People tend to live longer, though.

[Nesrie]

Women are being ignored during the economic shifts… looks at current discussion, still yep.

[Sharpe]

In an earlier era, we would have referred to Mr. Bates as “Master Bates” and that would have been symbolically perfect.

[Andy_Bates]

Why is that relevant? We’ll always have (duh) a bottom 50% of income, whether it’s the same individuals, or not. Is the inequality somehow more okay if it is different individuals? By definition, the majority of the bottom 50% aren’t moving up to the top 1%.

Yes, inequality is less of a problem as income mobility increases. With no income mobility, it’s “the rich get richer and the poor get poorer”. If people have greater income mobility (like studies that show that 58% of people in the bottom quintile move up over 10 years), then it’s “the poor get richer, and by a greater percentage.”

[Andy_Bates]

News report: The wealthy are killing and eating babies.

News report: Scottagibson manufactures analogies that entirely miss the point of what’s being discussed.

In an earlier era, we would have referred to Mr. Bates as “Master Bates” and that would have been symbolically perfect.

Truly, your wit is as sharp as your name! This is far from a joke that your average gradeschooler could have come up with.

[Strollen]

Why is that relevant? We’ll always have (duh) a bottom 50% of income, whether it’s the same individuals, or not. Is the inequality somehow more okay if it is different individuals? By definition, the majority of the bottom 50% aren’t moving up to the top 1%.

Because people (generally) get richer as they get older, not 1% percent but often top 20%. The classic case is the child of an immigrant who because doctor or lawyer, the person is poor while they are in school, middle class the first few years once they complete medical or law school and they move into the top 10 or 20% as they advance in their career.

[scottagibson]

Put another way, the very large percentage of people who never escape the bottom 20% ought to fucking starve.

[Soapyfrog]

It is not helpful to the bottom 50% with stagnant wages that the top 20% is seeing massive gains even if there is a lot of mobility.

[scottagibson]

Saying that the boats that didn’t rise with the tide don’t necessarily have all the same (drowned) occupants is not really what I think people thought a rising tide lifts all boats was intended to convey.

[Stepsongrapes]

Because people (generally) get richer as they get older, not 1% percent but often top 20%. The classic case is the child of an immigrant who because doctor or lawyer, the person is poor while they are in school, middle class the first few years once they complete medical or law school and they move into the top 10 or 20% as they advance in their career.

But you still have 50% of our population, as a cohort, whether younger or what have you, having a much smaller percentage of our economy than the similar cohort, historically. Telling those folks to “suck it up, it’ll be better when you’re 50” is irrelevant.

If you’re arguing that we’ve now economically “evolved” so that economic adulthood is later in your economic life but that the results are roughly the same, now, I think we need to see some sort of lifetime earning information to know that. And, even if that was the case, I question how sustainable that situation is when so much wealth stays captured in the upper echelons.

[Andy_Bates]

Put another way, the very large percentage of people who never escape the bottom 20% ought to fucking starve.

How large is the percentage of people in the bottom 20%? Where’s your data? Because I’ve already shown that 18% move up within a year, and almost 60% move up over a decade. As the time increases, a larger and larger percentage move up. So where’s your data that a “very large percentage” of people “never escape the bottom 20%”?

And again, why do you think the bottom 20% will starve? Give everyone in the U.S. $1000 a month, and the same people will be in the bottom 20%…but they will have a lot more money. The existence of a “bottom 20%” doesn’t mean that they necessarily have to starve.

It is not helpful to the bottom 50% with stagnant wages that the top 20% is seeing massive gains even if there is a lot of mobility.

“Stagnant” implies no movement over time, and “mobility” means movement over time. So if there is a lot of income mobility, then by definition the people in the bottom 50% won’t have stagnant wages.