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comment by bioemerl
bioemerl  ·  2529 days ago  ·  link  ·    ·  parent  ·  post: The fading American dream: Trends in absolute income mobility since 1940

    However, distributing current GDP growth more equally across income groups as in the 1940 birth cohort would reverse more than 70% of the decline in mobility. These results imply that reviving the “American dream” of high rates of absolute mobility would require economic growth that is shared more broadly across the income distribution.

This is an argument against that. The US is growing, we just aren't getting a chunk of it because it's all collected at the top.





user-inactivated  ·  2529 days ago  ·  link  ·  

Who's we? Americans? More people are making money all over the world today and Americans already have it much better than most in almost every way. I don't want to go back. American median income is 51k. That puts us in the global 1%. Why would I argue against that just because some people have a lot more?

kleinbl00  ·  2529 days ago  ·  link  ·  

Poke around.

Your figure, which I don't dispute, is $980 a week, or $24.51 an hour. zoom around and find the places where the living wage is appreciably below that. Here's the calcs, by the way.

What it tells you is that pretty much nation-wide, median income is within a couple bucks an hour of living wage for a single earner. Not a lot of savings possible, not a lot of opportunity to get ahead, buy a house, save for retirement. Median living wage for the United States is $15.84 an hour so, the difference between median wage and living wage is around $19k a year. We can dicker at the margins but that's about 20 grand, give or take, between subsistence and success. How fast do you think a family can burn through $20k if they want to have a little fun or go on vacation or get sick?

Then there's this:

Really, we're all busting our asses to get back to the Clinton era. It's the sort of reality that makes the proletariat resentful.

b_b  ·  2529 days ago  ·  link  ·  

That's an interesting graph in that it seems to indicate that real median household income can predict a recession. Do they have data going back further than mid 80s? N of 3 isn't super convincing, but sure is intriguing.

bioemerl  ·  2526 days ago  ·  link  ·  

Another interesting point is that that graph of the "gap' is worse in cities than in the country, and people have been moving into cities.

kleinbl00  ·  2528 days ago  ·  link  ·  

FRED goes to '84. A quick perusal found Census Bureau going back to '67.

https://upload.wikimedia.org/wikipedia/commons/5/5d/US_real_median_household_income_1967_-_2014.PNG

Source is here, pp 5.

EDIT: it's an interesting report. Their data claims that real wages for men have been declining since 1974.

user-inactivated  ·  2529 days ago  ·  link  ·  

I guess my question there is, what if there is a logarithmic curve to real median income growth for a given mix of workers? What if, instead of continuing to rise without limit, the curves tapers as a market is willing to sustain only that level of pay for work, regardless of efficiency gains and productivity. Maybe we hit that limit in 1998 and now we're going to be stuck there until a major change.

In that case, it would make sense that real income growth stalls and swings around that set limit until something else changes. We would see a huge gain in highest-level earners as they pocket the difference in profits, but also in an effort to compete we would see workers expand into other countries which have not reached that limit.

I don't argue that there are more billionaires, or that income growth for a ton of people has stopped within a set of countries, I'm just curious to see if that's a natural phenomenon now that the 'easy' income growth of getting into a new level of professional economy has already happened. Maybe the next change is automization which throws everything for a way bigger loop. Or maybe it's just that China becomes an economy on par with the West and makes a huge difference in consumption and supply of money in a wider middle class.

kleinbl00  ·  2529 days ago  ·  link  ·  

    I guess my question there is, what if there is a logarithmic curve to real median income growth for a given mix of workers?

My counter-question would be, "what is the significance of the median?" Certainly, if you were going to pick one statistic it's a good one to pick but if you're trying to analyze the whole system and its desirability to all participants, you might want to look at income deciles, for example:

Median income has stagnated for the median since 2000. It's stagnated for the 60th and 70th deciles, too. 80th and 90th? Things are bright. 20th, 30th, 40th? things are in the shit. But take a close look at 10th percentile - straight poverty level - Bush and Clinton were awesome for the poor and it's been pretty much shit ever since.

    Maybe we hit that limit in 1998 and now we're going to be stuck there until a major change.

Put another way, "maybe tax and social policy hamstrung the lower and middle class in 1998 at the expense of the upper class."

This is not a natural system - it is the output of a synthetic system whose inputs are tax and employment policy. It's not a problem Sweden has:

It's a problem Greece has in spades:

So in a sense yes, the numbers reflect the inputs. But in a sense no, those numbers are not "natural."

user-inactivated  ·  2529 days ago  ·  link  ·  

Fair. I'll never find a true free market economy to figure it out. It's just a question.

bioemerl  ·  2529 days ago  ·  link  ·  

    Who's we? Americans?

Yes, and the west in general at the moment.

    More people are making money all over the world today and Americans already have it much better than most in almost every way. I don't want to go back.

That's a massive excuse. People in the US should be better off today than they were yesterday, even if they were better off than everyone else. Our wealth in the US is growing just as it always has, but it is being siphoned off of us by those who are gaming our systems for their benefit.

Our gain of wealth from those who are at the top is not stealing from the Chinese. The wealth is here in the US already, it's not being taken from China. I'm not saying we move jobs here, I'm saying we change taxes and other systems that allow wealth to accumulate as it has.

We can all benefit from global trade. We should all benefit from global trade. Even if it is the wealthy and the Chinese profiting off the American people at our expense because "well, we have it good already", than we can, we should, and we will, shut it down.

Populism is on the rise for good reason.