Incone inequality myth.The Rich Are Getting Richer Faster than the Poor

[KLATTU]

It's you promoting the false premise. If there's an unlimited supply of everything, how do commodities work? Are people choosing to starve?

Look, I've read books by fascists who try to teach wealth acquisition. The first thing they say is to tell yourself exactly what you're saying, that the universe is infinitely abundant. Well, the poor aren't imagining their children don't get the same nutrition and education, it's a fact. And, when you ask the rich to pay their taxes, they don't reply with "What's it matter? There's plenty to go around." do they? No, they greedy up and defend their immorality just as you have.

One thing for which America suffers is our lack of critical thinking. You demonstrate well the ability to recite propaganda but not the ability to dissect it in order to make moral decisions. The conservatives have created a religion out of money and the adherents thereof dutifully repeat the dogma.

The many poor conservatives who know, deep down, that I'm right will never admit it. They are like Jehovas Witnesses who continue to defend a faith that will, statistically, leave them without their reward.

This world IS a zero sum game . If it wasn't there would be no poverty, hunger or illness for conservatives to exploit.

Laff- you sound like one of those kooks in Central Park, standing on a milk crate preaching with a bullhorn.

Very entertaining but not very tethered to the real world where us normals exist.

Rage on komrade!!!

 

[Media_Truth]

where did I fold?

I'm sticking by it. His refutation had some merit but I think the main point still point still stands. when people talk about the rich getting richer, they mistakenly refer to income quintiles, without acknowledging that people move in and out of those income quintiles all the time.

Liberal like to create the notion that the system is rigged in favor of the rich guy and against the poor guy. And of course guess who can fix it? Yep, Democrats.

I don't care who fixes it, but it is broken... See the chart below. Your buddies in the Senate want to take Social Security from the folks on the left of that chart, after they've payed into it all their lives.

 

[ludin]

True, but why work for 75% (or less) of what the job actually pays? If the boss has 10 workers then he/she is making $25/worker per job (day?) meaning that the boss makes $250 for those jobs even if they do not work on those job sites while each worker makes $75 for actually doing the work.

When I work for myself I get (net) 100% of the labor costs which allows me to use that extra 25% (or more) to invest in tools/equipment as well as making as much (or more) than I could working for someone else. I make no less (per hour) when I must (occasionally) use a helper (who I pay the same as I am getting per hour) on the job but, since they are making decent money too, they tend to work harder and do a better job.

Not everyone is like you that goes out and buys their own tools and gets licenses and insurance.
I the business owner has to do that.

I have to pay for the tools they lose, break or steal.
I have to pay workmans comp and a whole host of other things.

I then have people that don't do work that i have to pay.
i have to pay someone to do payroll and take phone calls at the office etc ...

there are a whole lot of details that go into it.
people don't go into business to just hire people they go into business
to make money. the only way to do that is to pay out less than what i take in.

 

[ttwtt78640]

Not everyone is like you that goes out and buys their own tools and gets licenses and insurance.
I the business owner has to do that.

I have to pay for the tools they lose, break or steal.
I have to pay workmans comp and a whole host of other things.

I then have people that don't do work that i have to pay.
i have to pay someone to do payroll and take phone calls at the office etc ...

there are a whole lot of details that go into it.
people don't go into business to just hire people they go into business
to make money. the only way to do that is to pay out less than what i take in.

That (bolded above) is, obviously, true yet is also greatly dependent on the size of the staff and type of industry. My point was that, in the construction, mechanical or maintenance trades, being someone's employee generally assures them that they are making 60% (or less) of what the customer is paying (being billed?) for their skilled labor.

My girlfriend does the billing, most of the job schedualing and I use a helper only ocassionally. On those ocassions where I do use a helper I am billing their labor at the same hourly rate as for my own labor - I lose little (or nothing) by paying them exactly what the customer is paying me and it makes it very easy for me to get help (when required and on short notice).

 

[ludin]

That (bolded above) is, obviously, true yet is also greatly dependent on the size of the staff and type of industry. My point was that, in the construction, mechanical or maintenance trades, being someone's employee generally assures them that they are making 60% (or less) of what the customer is paying (being billed?) for their skilled labor.

My girlfriend does the billing, most of the job schedualing and I use a helper only ocassionally. On those ocassions where I do use a helper I am billing their labor at the same hourly rate as for my own labor - I lose little (or nothing) by paying them exactly what the customer is paying me and it makes it very easy for me to get help (when required and on short notice).

what you pay them is up to you.
the fact is that you still pay them less than it costs to do the job.

you might pay them the same hourly rate but you have that money built into the cost of the job

 

[ttwtt78640]

what you pay them is up to you.
the fact is that you still pay them less than it costs to do the job.

you might pay them the same hourly rate but you have that money built into the cost of the job

I work (bill) only on a time (actual labor hours) plus materials (at cost - receipts supplied to the customer) basis. I only use help when it is to the customer's advantage - the total labor of a two man crew is less (total) labor hours than if I were to do the work alone. For example, when building a roof using a helper eliminates many trips up and down the ladder.

 

[ashurbanipal]

FALSE PREMISE. It's not a zero sum game.

Not false. In any given period, there's only so much stuff. That the amount of stuff can be increased in the next period doesn't make the premise false, nor does it mean there is an infinite amount of stuff. To put it another way, saying that the economy is not a zero sum game is not to deny that, at any given point or over any given period, the amount of resources in the economy is finite. There is, therefore, some multiple of individual need at which, if some individual has that much, another must perforce do without.

 

[ludin]

Not false. In any given period, there's only so much stuff. That the amount of stuff can be increased in the next period doesn't make the premise false, nor does it mean there is an infinite amount of stuff.

no it is a false premise. no stuff is always moving in an out at various points in time.

 

[ashurbanipal]

no it is a false premise. no stuff is always moving in an out at various points in time.

What you say is true, but that does not make it a false premise. That there are (for example) lots of people moving in and out of the building where I work all the time doesn't mean that, at any given time or over any given period, there aren't a finite number of people in the building. Similarly, that resources are being brought into the economy all the time doesn't mean that, at any given time, there's an infinite amount of resources.

 

[D_NATURED]

Laff- you sound like one of those kooks in Central Park, standing on a milk crate preaching with a bullhorn.

Very entertaining but not very tethered to the real world where us normals exist.

Rage on komrade!!!

Actually, my post was extremely cogent and you weren't smart enough to answer to any of my points. It's you and the "normal" idiots who have nothing but bull**** to offer and it's only forums like this that give your ilk ANY platform to be heard. If you are a "normal", that explains a lot about how ****ed up reality actually is. Clearly, you have NO answers, you're just a parrot with a Trump boner.

I also doubt you've even been to central park. New York is a very competitive environment and fools don't survive there.

 

[ashurbanipal]

Actually, my post was extremely cogent and you weren't smart enough to answer to any of my points. It's you and the "normal" idiots who have nothing but bull**** to offer and it's only forums like this that give your ilk ANY platform to be heard. If you are a "normal", that explains a lot about how ****ed up reality actually is. Clearly, you have NO answers, you're just a parrot with a Trump boner.

I also doubt you've even been to central park. New York is a very competitive environment and fools don't survive there.

Yeah, your post made complete sense to me. The wealthy and their cheerleaders do often like to say that there’s so much it may as well be the case that resources are infinite. But they act as if resources are quite scarce. And then play it off with ad hominem attacks when called on it.

 

[JasperL]

https://fee.org/articles/5-myths-about-income-inequality-debunked/

This isn't so much an outright fallacy as it has to do with incomplete knowledge and misunderstanding of statistics. The argument falls apart when you consider two things: income mobility and the fact that all households saw increases over time.

The data comes from the Panel Study of Income Dynamics at the University of Michigan. This longitudinal study started in 1968 and has been ongoing ever since.
The reason this data is important is that it follows people over time instead of statistical bins. This is maybe, at first, a subtle point, but it is crucial. Many arguments involving inequality follow statistical bins over time instead of people over time who move through the bins. I might not be as concerned about the bin of the bottom 20 percent between 1970 and 2018 if the people who made up the bottom quintile in 1970 have moved into other higher bins by 2018.

Goodness, the article lost me with "Myth 1." The author posts a graph of MEDIAN income, and says, correctly enough, that it's a graph of household income, and if family size has changed, say we've gone from 1.6 earners per household to 1.3 or whatever, that the graph will be misleading. That's a good point and one I have to work around all the time, with limited success.

So he compares MEDIAN income, equal n's, observations, amount above and below, to PER CAPITA income, which is a straight average. As we know, if Warren Buffett walks into any ordinary bar, the PER CAPITA wealth of bar patrons will increase by 1,000 fold or something. Median wealth of bar patrons won't likely move much if at all.

So that's a really deceptive attempt to bust a "myth."

Point 2 about family mobility was pretty decent - the links were interesting.

Point 3 about wages not tracking productivity was another exercise in BS. He points to a graph that includes "Wages and benefits" for non-supervisory workers (i.e. hourly workers) then claims that the measure excludes....benefits.

Then he compares that graph, which is a "myth" to another graph that also adds in benefits, like the "Myth" that he's busting, and again uses AVERAGE pay, which would include of course all compensation, from hourly workers to the CEO. So it's misleading.

At that point I quit because it's lousy analysis - dishonest IMO.

 

[KLATTU]

Even over the shorter term, the composition of the top 1 percent often changes dramatically. If history is any guide, roughly 56 percent of those in the top income quintile can expect to drop out of it within 20 years.53 Of course, they may retain accumulated wealth, but even by this measure shifts can occur rapidly. Indeed, just as rises in capital markets can make some people rich, declines can wipe out their wealth quickly. It is notable that of those on the first edition of the Forbes 400 in 1982, only 34 remain on the 2014 list, and only 24 have appeared on every list.54 Some dropped about because they died, of course, but most simply did not see their wealth grow sufficiently to maintain their place. And, this would not have required major gains. For instance, Lawrence Summers estimates that even a 4 percent real rate of return on their wealth would have kept them on the list.55 That they were unable to meet even this modest goal suggests that the rich are not continuing to increase their wealth at rates well above the rate of economic growth as claimed by Piketty.

The heirs of great fortunes have done especially poorly. For example, we might think of the du Ponts or Rockefellers as personifying multigenerational wealth. Thirty-eight people from those two families appeared on the 1982 list but none of the 16 du Pont heirs are currently on the Forbes 400 list and there is just one Rockefeller, 100-year-old David Sr. Nor are there any heirs to the Hearst fortune. The Mellons are out too, as are the Dursts and the Searles.56 Inheritance does not play an outsized or increasing role in the composition of the list: since 2005, those that inherited their money comprised just 10 percent of newcomers and 15 percent of newcomer’s wealth. The descendants of families on the inaugural list account for only 39 percent of the total wealth on the 2014 list.
https://www.cato.org/publications/policy-analysis/five-myths-about-economic-inequality-america

Wave bye-bye to a another lw talking point.
#FACTS:2wave:

 

[ludin]

What you say is true, but that does not make it a false premise. That there are (for example) lots of people moving in and out of the building where I work all the time doesn't mean that, at any given time or over any given period, there aren't a finite number of people in the building. Similarly, that resources are being brought into the economy all the time doesn't mean that, at any given time, there's an infinite amount of resources.

When you control your own money supply and can add to the pot when it is required then income inequality doesn't matter.
income inequality only matters in a system where you cannot add anymore money to the pool.

in that case you do need massive amounts of redistribution.

 

[American]

The thing is, poverty is a component of capitalism as we do it. Our system requires poverty to exist. The money we spend on the poor is just the basics. It does little to lift them out of their socioeconomic place. We have to have poor people so that fabulous wealth can even exist.

So there is zero poverty on socialist countries?

 

[ashurbanipal]

When you control your own money supply and can add to the pot when it is required then income inequality doesn't matter.
income inequality only matters in a system where you cannot add anymore money to the pool.

in that case you do need massive amounts of redistribution.

But supply and demand work the same for dollars as they do for anything else. If there is a greater supply of dollars, each dollar becomes worth less. So printing more money doesn't help. There is, at any one time, a finite supply of the things people need--only so much food, only so many dwellings, only so much medicine, etc. There is, therefore, some multiple of what a person needs at which, if an individual has over that multiple, someone else has to do without something they need. Sure, we can build more houses and grow more food--but we never produce a literally infinite number of houses or an infinite amount of wheat. And we cannot just produce however many/much of those and other necessities we want.

The "non-zero-sum" comment is meant, I take it, to point out that the total pot in the game is, or can be, increased over time--and so therefore, as you say, income inequality shouldn't matter. While I think there must be some limit to how much can be produced over some interval, I'd agree we haven't hit that point of maximum production yet, so I agree the economy is not a zero-sum game. However, that fact doesn't imply that income inequality doesn't matter, since (to repeat) there is still, at any one time or over any given interval, a finite amount of resources available. And the same wealthy individuals who like making the "non-zero-sum" comment certainly turn around and act as if resources are finite. That is, they act as though they're aware the move from "non-zero-sum" to "income inequality doesn't matter" is a bad one.

 

[ludin]

But supply and demand work the same for dollars as they do for anything else. If there is a greater supply of dollars, each dollar becomes worth less. So printing more money doesn't help. There is, at any one time, a finite supply of the things people need--only so much food, only so many dwellings, only so much medicine, etc. There is, therefore, some multiple of what a person needs at which, if an individual has over that multiple, someone else has to do without something they need. Sure, we can build more houses and grow more food--but we never produce a literally infinite number of houses or an infinite amount of wheat. And we cannot just produce however many/much of those and other necessities we want.

When money is printed to meet the demand of the economy then no each dollar doesn't become worth less.
it is only worth less when you have an excessive amount of dollars that are not needed floating around.

that is the job off the federal reserve to ensure that there are enough dollars plus little extra.
that is why you still get your pay check at the end of the week when someone else earned 1m dollars the day before.

our economy does not run like the game of monopoly where are are only so many dollars in the bank and if the bank
runs out that is it.

 

[D_NATURED]

Yeah, your post made complete sense to me. The wealthy and their cheerleaders do often like to say that there’s so much it may as well be the case that resources are infinite. But they act as if resources are quite scarce. And then play it off with ad hominem attacks when called on it.

They contradict themselves at every turn and then use magical thinking to make the pieces fit. Actually, as with most religions, it's only the lambs (lion wannabees) that have to believe the dogma. Those at the top can decree any ridiculous thing in the confidence that the rubes will find convoluted but convenient answers to soothe their doubts and enable the rich. The truth isn't the truth, up is down, down is up, the poor are robbing the rich, blah blah blah, whatever it takes. It's absurd what they can so easily believe and how much harm they can ignore for money.

If we can't afford to have an ethical economy, we cannot claim to have a society that values justice. What better place to start in establishing justice than with money, the ROOT of all evil, after all? The left seems to acknowledge that there is injustice but can't find just the right recipe to compromise with evil. The right just make evil "normal". We lose either way.

 

[ashurbanipal]

When money is printed to meet the demand of the economy then no each dollar doesn't become worth less.

No, that is not true, as can easily be shown. Look: suppose there were, in the economy, no more than 300 million dollars, and there was a hard limit placed on the number of dollars at that mark. We would each have one dollar--or at least, there would be one dollar for each citizen of the U.S. In that case, with dollars being the only medium of trade, we would first recognize that there aren't nearly enough dollars to facillitate trade, and second, of course dollars would be exquisitely valuable. As more dollars were printed (we assume the people in this hypothetical scenario wise up and realized they need more dollars), each dollar would lose value. If, say, we doubled the number of dollars in circulation, each dollar would be worth approximately half what they had been worth. Doubling the dollars in circulation again wouldn't quite halve their value, and so on. The same principle holds in the actual world, in any situation. It doesn't really matter how many dollars are needed to facilitate trade. The laws of supply and demand are pretty firm here--the more dollars there are, the less they are worth.

that is why you still get your pay check at the end of the week when someone else earned 1m dollars the day before.

I get a paycheck in dollars in spite of the fact that someone else got paid in dollars the day before I got paid? I'm afraid that comment doesn't make much sense.

our economy does not run like the game of monopoly where are are only so many dollars in the bank and if the bank runs out that is it.

Sure. But it does run that way with respect to the materials people need to survive. If you print more dollars, it will take more of them to purchase food, houses, etc. Concomitantly, if demand for those things comes close to matching supply, the price will be bid upward, and people with few dollars will be priced out. That dollars are not finite is therefore a red herring--what matters is that the things we need to survive are finite, at any one time or over any given interval.

 

[uptower]

FALSE PREMISE. It's not a zero sum game.

It is to a point a 'zero sum game' but rather than 'all or nothing' people in society get 'more or less'. The world only has finite resources, these have never been evenly distrubuted and never will, and when some people have a bigger slice of the pie, others by default get a smaller one.

As for social mobility, study after study has shown stagnant wage growth and a widening gap between rich and poor - to the point where the average CEO earns hundreds of times more than the average worker (as opposed to only dozens of times more some decades ago). Moreover with inflation it is harder and harder to make ends meet on a basic wage anymore because that money doesn't go as far.

Income for the super wealthy has outstripped inflation, inflation has outstripped income for the working poor, hence the widening gap.

 

[markjs]

I'm sorry but that doesn't even begin to make sense to me.

Not surprising considering 90-95% of everything you have ever posted was complete horsesh***, and the 5-10% that wasn';t was sheerly accidental!:lamo

 

[markjs]

Translation: when the claims in your OP are rationally challenged, you fold like a cheap card table.

Ouch:lamo

 

[RetiredUSN]

https://fee.org/articles/5-myths-about-income-inequality-debunked/

This isn't so much an outright fallacy as it has to do with incomplete knowledge and misunderstanding of statistics. The argument falls apart when you consider two things: income mobility and the fact that all households saw increases over time.

The data comes from the Panel Study of Income Dynamics at the University of Michigan. This longitudinal study started in 1968 and has been ongoing ever since.
The reason this data is important is that it follows people over time instead of statistical bins. This is maybe, at first, a subtle point, but it is crucial. Many arguments involving inequality follow statistical bins over time instead of people over time who move through the bins. I might not be as concerned about the bin of the bottom 20 percent between 1970 and 2018 if the people who made up the bottom quintile in 1970 have moved into other higher bins by 2018.

The rich lost a lot of money over the past 2 weeks also.

 

[markjs]

The rich lost a lot of money over the past 2 weeks also.

:boohoo::violin

 

[Myview]

https://fee.org/articles/5-myths-about-income-inequality-debunked/

This isn't so much an outright fallacy as it has to do with incomplete knowledge and misunderstanding of statistics. The argument falls apart when you consider two things: income mobility and the fact that all households saw increases over time.

The data comes from the Panel Study of Income Dynamics at the University of Michigan. This longitudinal study started in 1968 and has been ongoing ever since.
The reason this data is important is that it follows people over time instead of statistical bins. This is maybe, at first, a subtle point, but it is crucial. Many arguments involving inequality follow statistical bins over time instead of people over time who move through the bins. I might not be as concerned about the bin of the bottom 20 percent between 1970 and 2018 if the people who made up the bottom quintile in 1970 have moved into other higher bins by 2018.

It is a common narrative of the right that income inequality shouldn't be taken seriously. After all it is the rights aim to perpetuate income inequality by taxing the rich less both individually and corporately. To reduce
or do away with Medicare, Medicaid, Social Security, Pell grants, or any thing else that makes education and health care more attainable for the masses. The Michigan State PSID studies include many laudable studies on the impact of just about every social phenomenon and effectiveness of government aid programs on children and families. I don't think that following 5000 families and that 5000 families off spring is indicative that income inequality doesn't exist. The aim of the studies is not to prove some political point but to show how things like disability, lack of access to health care, and alternate lifestyles affect life for generations. Income inequality isn't some imaginary filament drifting through the air to be futilely grasped at. Income inequality has always existed since kings and feudal barons had most of the existing wealth. Fast forward to 2018 and you should be able to see that we still have kings and feudal barons who enjoy most of the wealth that Americans produce. Is income inequality a threat to democracy? I think it is. We are probably already seeing some of the effects of extreme income inequality. There is gradual incremental increases in wages but that only allows the masses to walk as if on a treadmill. Not really getting any where. If the right is allowed all of its policy initiatives the income gap will grow even larger.