WHY IS INCOME INEQUALITY RISING?

[Lafayette]

GDP per capita tells you absolutely nothing about the standard of living for most people. How about instead we look at median wages with working force demographics controlled relative to the cost of living. What you get back is horrifying.

Blah, blah, blah ...

 

[Artymoon]

Lol yes. 40% of people not having a few hundred dollars just means lack of personal responsibility. Couldn't be a systemic problem!

That's exactly what it means. I'm sure they have fancy phones with all the bells and whistles. Probably have all the streaming services too. If you can't pay your bills each month then adjustments need to made. A lesson that should have been learned from parents. Now there's a systemic problem for you....

 

[phattonez]

That's exactly what it means. I'm sure they have fancy phones with all the bells and whistles. Probably have all the streaming services too. If you can't pay your bills each month then adjustments need to made. A lesson that should have been learned from parents. Now there's a systemic problem for you....

You mean they spend $10 per month on Netflix? Man if only they cut that out then their $2000 rent bill wouldn't be so bad!

 

[Artymoon]

You mean they spend $10 per month on Netflix? Man if only they cut that out then their $2000 rent bill wouldn't be so bad!

Yep, called living beyond their means. Not a new concept even though people like to pretend it doesn't exist. Again, lack of good examples growing up is a common theme.

 

[Lord of Planar]

Couldn't be the fact that rents have risen faster than wages...

That's a different variable.

 

[Lafayette]

From here: LEST WE FORGET THE HORRORS: A CATALOG OF TRUMP’S WORST CRUELTIES, COLLUSIONS, CORRUPTIONS, AND CRIMES

Excerpt:

BEFORE JANUARY 2017

1. 
   – February 10, 2011 – In 2011, Donald Trump stoked false claims that Barack Obama had lied about his education. During a speech to the Conservative Political Action Conference, Trump said, “Our current president came out of nowhere. Came out of nowhere. In fact, I’ll go a step further: The people that went to school with him, they never saw him, they don’t know who he is. It’s crazy.” This is false. Numerous accounts from Obama’s college classmates refute Trump’s claim, including Obama’s Columbia roommate, Phil Doerner.
   
   
2. 
   – March 30, 2011 – Donald Trump was a vocal proponent of the “birther” myth, claiming Barack Obama was not born in the United States. In 2011, Trump told Bill O’Reilly, “If you are going to be president of the United States you have to be born in this country. And there is a doubt as to whether or not he was… He doesn’t have a birth certificate. He may have one, but there’s something on that, maybe religion, maybe it says he is a Muslim. I don’t know. Maybe he doesn’t want that. Or he may not have one. But I will tell you this. If he wasn’t born in this country, it’s one of the great scams of all time.” In response to the “birther” conspiracy theory, the State of Hawaii released Barack Obama’s short- and long-form birth certificate.
   
   
3. 
   – August 6, 2012 – Over a year after the White House released Obama’s long-form birth certificate, Donald Trump again promoted the “birther” myth, tweeting, “An ‘extremely credible source’ has called my office and told me that @BarackObama’s birth certificate is a fraud.” President Trump has publicly attacked media outlets for citing anonymous sources, but has himself cited anonymous sources numerous times to support the claim that Barack Obama lied about his biography.
4. ...

It's long and boring. But there is enough content in the catalog for any one reading it to understand rapidly how inept he was as a PotUS.

The biggest avarice of Immense Wealth is that damn few people are willing to say how daft you really are. Said cupidity is also called "The BigMoney Effect" ....

 

[ttwtt78640]

That's a different variable.

Yep, but very important one.

 

[Ringo Stalin]

Capitalism is not based on capitalists, there are few of them. It is based on fools who dream of becoming capitalists. Here are a lot of them.

 

[Lafayette]

Capitalism is not based on capitalists, there are few of them. It is based on fools who dream of becoming capitalists. Here are a lot of them.

Definitions are highly variable. We all employ capital (money). Our savings are "capital". So, are we all "capitalists"? Well, yes we are according to that simple definition because we "hold capital assets". If you own one, your house is a capital-asset because of its inherent retail-value. Bingo! You're a "capitalist" according to its long-standing definition.

"Capitalist" - I suggest - is an antiquated word from the 19th century when certain families owned great estates as well as manufacturing-buildings. Which they bought/developed with "capital".

It's time we got rid of it. But, of course, that wont happen - the word is far too employed in our "normal parlance" ...

 

[Luther]

A frank lesson about American political-judgement was just shown in this last presidential election. Nearly half the voters voted for a Mentally Sick Billionaire who thinks the election was manipulated against him and that he need only wait four more years to get reelected.

The most dangerous problem in the US is -and has been for quite some time - its Acute Income Disparity. And we blithely elect millionaires to run the country:

Such is our endemic National Delusion:
*That the acquisition of millions if not billions of dollars by a very tiny percentage of the Total Population is both correct and natural.
*And that distribution of Income is of no real consequence to the well-being of the nation as a whole.

Both of the above are sophomoric attitudes. Both are momentous self-delusions of a country unwilling to consider the dangerous economic-path it has decided to follow ...

The answer to the question posed in the tittle is amply considered and answered in this OECD pdf-document here. It's a very long but interesting read.

PS: Let's not forget. It was Communism that taught us "equality of Income" was NOT the right solution. But we still need to learn that Excessive Accumulation of Wealth is NOT either the best outcome!

Why?

Because we're producing even more millionaires(wink)

 

[Lafayette]

Why?Because we're producing even more millionaires(wink)

The consequence of which is the fact that the US has the most poor of most developed countries.

See poverty-chart here: OECD Poverty Rate Chart

Uncle Sam is "Number 1" in terms of overall poverty. Congratulations!

(I'm sure that honor is something of which America must be Very Proud ... ! ;>)

 

[rickc]

Pretty obvious what the effect of the Reagan tax cuts were from the graphs below.

Before Reagan the wealthy business owners knew that any income over $215,000 ($680,000 adjusted for inflation 2020) would be taxed a a 70% rate. They could either pay it in taxes or invest it in their business or workers. Made it a lot easier to give raises. If you notice from the table below a rising tide raised all boats.

Now after Reagan's tax cuts those wealthy business owners realized they could keep it all and they did.

 

[ttwtt78640]

The consequence of which is the fact that the US has the most poor of most developed countries.

See poverty-chart here: OECD Poverty Rate Chart

Uncle Sam is "Number 1" in terms of overall poverty. Congratulations!

(I'm sure that honor is something of which America must be Very Proud ... ! ;>)

Hmm... using this:

The poverty rate is the ratio of the number of people (in a given age group) whose income falls below the poverty line; taken as half the median household income of the total population.

After all, median income by definition is half the group (in this case households) make below that income level. If the US median annual household income is $64K then any (individual or household?) making less than $32K/year is defined as being poor. That conflicts with the federal poverty level commonly used to define poverty in the US.

2021 Poverty Guidelines

U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs [Federal Register Notice, February 1, 2021 - Full text] [Computations for the 2021 Poverty Guidelines] There are two slightly different versions of the federal poverty measure:

aspe.hhs.gov

 

[rickc]

Hmm... using this:


After all, median income by definition is half the group (in this case households) make below that income level. If the US median annual household income is $64K then any (individual or household?) making less than $32K/year is defined as being poor. That conflicts with the federal poverty level commonly used to define poverty in the US.

2021 Poverty Guidelines

U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs [Federal Register Notice, February 1, 2021 - Full text] [Computations for the 2021 Poverty Guidelines] There are two slightly different versions of the federal poverty measure:

aspe.hhs.gov

Why do these discussions always revert to the poor. What we are really talking about is 90% of Americans haven't participated in the income growth since Reagan's tax cuts. Poor? That is America's entire middle/working class.

There will always be the poor and we will take care of them

But this income inequality is affecting the backbone of our economy. That American middle class. The largest consumer base in the world.

Want to see real GDP growth in America? Get the money in the hands of the middle class.

 

[cpwill]

A Bangladeshi boy in a workshop for the production of parts for the shipbuilding industry.
According to the UN, 152 million children worked in the world in 2020.
48% are between the ages of 5 and 11.
Capitalism is so effective that it continues to exploit child labor even in the 21st century.

yes. if there is one thing that doesn't exist in other economic models, it's minors performing labor.

 

[ttwtt78640]

Why do these discussions always revert to the poor. What we are really talking about is 90% of Americans haven't participated in the income growth since Reagan's tax cuts. Poor? That is America's entire middle/working class.

There will always be the poor and we will take care of them

But this income inequality is affecting the backbone of our economy. That American middle class. The largest consumer base in the world.

Want to see real GDP growth in America? Get the money in the hands of the middle class.

That (bolded above) makes sense, until one sees the proposed solutions to do so being to “tax the rich” or “make the rich pay their fair share”. All that would really do is take some more money away from investors and/or employers and place it into the hands of the federal government. How that money would then wind up “in the hands of the middle class” is never really explained. What I suspect would actually happen is that more “safety net” (aka mandatory) spending would result.

 

[rickc]

That (bolded above) makes sense, until one sees the proposed solutions to do so being to “tax the rich” or “make the rich pay their fair share”. All that would really do is take some more money away from investors and/or employers and place it into the hands of the federal government. How that money would then wind up “in the hands of the middle class” is never really explained. What I suspect would actually happen is that more “safety net” (aka mandatory) spending would result.

If you had the choice of either capitalizing your business or giving your employees raises, higher wages equal more qualified employees, or giving it to the government in the form of taxes which would you pick?

 

[iguanaman]

Newsflash: Rich people will always get richer, no matter the country.

I'm more interested in the U.S. standard of living. The "poor" people in our country are doing quite well compared to much of the word. With a higher than average salary within the largest economy in the world, access to goods and services has never been more attainable. The citizens of the U.S. have wants but very few needs.

No they do not. Look at this chart and see if you can find our very best economic times...

The postwar period from 1947 to 1980 was when we grew our middle class to be the envy of the world.

 

[ttwtt78640]

If you had the choice of either capitalizing your business or giving your employees raises, higher wages equal more qualified employees, or giving it to the government in the form of taxes which would you pick?

We will likely soon see, but (as you noted) tax avoidance will become a higher priority.

 

[Lafayette]

METHINKS

After all, median income by definition is half the group (in this case households) make below that income level. If the US median annual household income is $64K then any (individual or household?) making less than $32K/year is defined as being poor. That conflicts with the federal poverty level commonly used to define poverty in the US.

And so? What do we do about the "problem". (If indeed there is one and where?)

The MW is not at the rate the last-law fixed it (around 6$ an hour) in most states. So what IS the going- rate?

Here is the list of MW's by state: List of Minimum Wage Rates by State 2021

Of course, it would be important to understand who is getting what minimum hourly-wage actually state by state, and then take action to implement a new, higher Minimum wage state-by-state that is "livable".

Methinks. And you ... ?

 

[Lafayette]

BIDEN THIS AND BIDEN THAT

So what is Biden trying to accomplish with the Minimum Wage?

This may help to understand what his goals are (because the road there aint easy): Biden takes a step toward $15 federal minimum wage

Excerpt:

Biden is starting with contractors, but he campaigned on raising the federal minimum wage for everyone. It’s in his $1.9 trillion COVID-19 relief proposal.

“If it doesn’t go through COVID, I certainly think we will see legislation within the first 100 days to raise the minimum wage,” said Michael Lotito, who co-chairs the Littler law firm’s Workplace Policy Institute.

This is a fraught time to tackle minimum wage increases. On the one hand, it would take on long-standing inequities deepened by the pandemic, said Yana Rodgers, director of the Center for Women and Work at Rutgers School of Management.


“This is a better time than any of all to increase wages for low-wage workers because they’ve been hit particularly hard by the pandemic,” Rodgers said. And it would narrow gender and racial pay gaps, she added.

On the other hand, many small businesses are operating on a knife’s edge during this downturn, Challenger said, and “pressure on wages is going to be a very difficult pill for many businesses to swallow at the moment.”

Key-point in red above ...

 

[Lafayette]

THE "KEY-POINT" - BE PREPARED

BIDEN THIS AND BIDEN THAT

For as long as Americans are getting a "shot in the arm" of Covid-antivirus then they will think they are "impregnable". Which means they will get back to shopping - their favorite pastime.

Which means further that the economy that is not all that bad as regards "Demand" - but was in a deep-deep hole as regards "Supply" - will find its way back quickly to a semblance of normality.

Full-normality however will take another 2/3 (and maybe even 4) months to arrive at a great-majority of Yanks (more than 90%) who have been treated with the Covid antidote ....

PS: And then we can all start worrying about CovidThree! Yes the third version of Covid that could well be on its way in a years time. And whadda-we-gonna-do about that one?
PPS: And the best way to defend yourself today and now from here: World Health Organization Coronavirus

The best way to prevent and slow down transmission is to be well informed about the COVID-19 virus, the disease it causes and how it spreads. Protect yourself and others from infection by washing your hands or using an alcohol based rub frequently and not touching your face.

 

[ttwtt78640]

METHINKS



And so? What do we do about the "problem". (If indeed there is one and where?)

The MW is not at the rate the last-law fixed it (around 6$ an hour) in most states. So what IS the going- rate?

Here is the list of MW's by state: List of Minimum Wage Rates by State 2021

Of course, it would be important to understand who is getting what minimum hourly-wage actually state by state, and then take action to implement a new, higher Minimum wage state-by-state that is "livable".

Methinks. And you ... ?

I think that you are constantly moving the goal posts.

 

[bongsaway]

Newsflash: Rich people will always get richer, no matter the country.

I'm more interested in the U.S. standard of living. The "poor" people in our country are doing quite well compared to much of the word. With a higher than average salary within the largest economy in the world, access to goods and services has never been more attainable. The citizens of the U.S. have wants but very few needs.

Who cares compared to the rest of the world, we are not the rest of the world. I just saw a story where a woman clears a thousand a month and she works forty hour weeks. Her child care alone is five hundred a month. That leaves rent, food and utility bills to pay with the other five hundred. Over half of america makes less than thirty five thousand a year. Maybe your secure in life but many, many others are not. You dismiss the poor so easily just like so many others.

Income disparity is created by those with not by those without.

 

[Artymoon]

Who cares compared to the rest of the world, we are not the rest of the world. I just saw a story where a woman clears a thousand a month and she works forty hour weeks. Her child care alone is five hundred a month. That leaves rent, food and utility bills to pay with the other five hundred. Over half of america makes less than thirty five thousand a year. Maybe your secure in life but many, many others are not. You dismiss the poor so easily just like so many others.

Income disparity is created by those with not by those without.

Because the OP was comparing U.S. to Europe.

I'm sure we could trade anecdotes all day. Is there more to her story in your example? How much is she making per hour? is upward mobility impossible? how much debt does she have? how many kids? where's the Dad? what city/area has she chosen to reside? I'm sure there are a host of factors related to her situation, some of her own doing and some out of her control.