Are the poor better off now than they were 50 years ago?

[sbunny8]

@Shodan

So I am less likely to cooperate with someone if he has more money than I do?

No. Under the old system where wealth=favors, you gain wealth by cooperating. Under the new system where wealth=money, it’s possible to gain wealth by cooperating but it’s also possible to gain wealth without cooperating. Hence the incentive to cooperate is greatly reduced. There was a time when being a jerk who refused to cooperate basically meant you would starve to death. Now it’s possible to be an uncooperative jerk and end up on the cover of Forbes magazine.

@Shodan

Do you have data on how much more common cheating and sharp dealing are in societies that use money vs. societies that use barter?

That’s an interesting question about cheating. If I find any studies about honesty in tribes that use money vs. tribe that trade favors, I’ll get back to you.

But you’re missing the point that I’m not talking about barter; I’m talking about trading favors, which is entirely different.

@Shodan

I am able to trade you one sheep for three chickens, instead of someone else who will trade for five chickens. In what way is this prevented if we use chickens instead of money?

In that example, the chickens ARE money. What I said applies to almost any form of money, including coins, bank accounts, or chickens. The alternative is FAVORS. Money can be stolen. Money can be given away to a friend or relative. Money can be hoarded over time and its value doesn’t decrease. Favors can’t be stolen, can’t be given away, and they fade over time because they only exist in our memories. By those criteria, chickens are money. Favors aren’t.

@Shodan

I don’t see the connection between this and income disparity.

The connection is that there’s a practical limit on how many favors one person can accumulate but there’s no limit on how much money they can accumulate. You can easily imagine a CEO who makes $20 million per year while the janitor makes $20 thousand. Is that because the CEO works 1,000x harder?

Just imagine what the world would be like if people earned money by working and the amount of money you earned was proportional to how hard you worked. Wow, what a concept.

@Shodan

If you are claiming that income disparity is so destructive, why is the material position of the poor so much better than it was fifty years ago? According to your ideas they should be worse off - instead they are better by practically any measure you name.

I never said that a system which encourages selfishness would lead to people having fewer material possessions. What I said was that I hope it’s worth it. I hope that having more material possessions is worth the price of living in a world which (often) rewards selfish behavior.

But, since you brought it up, here are three measures I can name.

#1 How many hours per week does the average person have to work to get the basic necessities of life: food, clothing, shelter? It’s true that we have nicer food, nicer clothing, and nicer shelters, but we have to work longer hours to get it. Fifty years ago, a dad could work 40 hours per week and earn enough money so the mom could stay home with the 2.5 children. Now, the dad works 50 hours and the mom also works 50.

#2 What percentage of the population is homeless? It’s great that the average person sleeps in a 3-bedroom house but that’s not much comfort to the person who’s sleeping in a cardboard box.

#3 What percentage of the population has no access to health care? It’s great that we live in a country with fabulous hospitals with skilled doctors and effective medicines, but that doesn’t count for much to the people who can’t afford to see a doctor when they get sick.

I submit that, by all three of these measures, poor people in the US are worse off than they were 50 years ago. So, overall, it’s a mixed bag. We are better off in some ways, worse off in others. And the price we pay for this Faustian bargain is that people have less incentive to cooperate.

[XT]

[QUOTE=sbunny8]
The connection is that there’s a practical limit on how many favors one person can accumulate but there’s no limit on how much money they can accumulate. You can easily imagine a CEO who makes $20 million per year while the janitor makes $20 thousand. Is that because the CEO works 1,000x harder?
[/QUOTE]

No, it’s because the CEO is presumably worth 1000x more to companies willing to pay that price for his or her services. It has nothing to do with hard work and everything to do with value. A free market system places value on certain jobs over others. I probably work less hard than your janitor yet make more than s/he does because my job skills are more in demand.

Basically, your labor is worth exactly what someone is willing or able to pay you for it in conjunction with what you are willing to sell that labor for, and has nothing to do with how hard you work.

[Shodan]

@sbunny8

No. Under the old system where wealth=favors, you gain wealth by cooperating. Under the new system where wealth=money, it’s possible to gain wealth by cooperating but it’s also possible to gain wealth without cooperating. Hence the incentive to cooperate is greatly reduced. There was a time when being a jerk who refused to cooperate basically meant you would starve to death. Now it’s possible to be an uncooperative jerk and end up on the cover of Forbes magazine.

You seem to be talking about trading favors. I am talking about exchanging goods.

But, since you brought it up, here are three measures I can name.

#1 How many hours per week does the average person have to work to get the basic necessities of life: food, clothing, shelter?

Most countries in the developed world have seen average hours worked decrease significantly.[19][20] For example in the U.S in the late 19th century it was estimated that the average work week was over 60 hours per week.[21] Today the average hours worked in the U.S is around 33,[22] with the average man employed full-time for 8.4 hours per work day, and the average woman employed full-time for 7.7 hours per work day…

Cite.

#2 What percentage of the population is homeless? It’s great that the average person sleeps in a 3-bedroom house but that’s not much comfort to the person who’s sleeping in a cardboard box.

Actually on the street? About 0.0007%. Cite.

#3 What percentage of the population has no access to health care?

I don’t have anything like exact figures, but something like 83% of the US populace has some kind of health insurance, and some of the rest are covered by Medicaid or charity care. (Cite.)

I submit that, by all three of these measures, poor people in the US are worse off than they were 50 years ago.

Let’s see your figures, then. Specifically, what percentage of the US population was living on the street in 1964, how many hours it took to earn the basics of life in 1964, and what percentage of the populace had no access to health care in 1964, as compared to today.

Regards,
Shodan

[qazwart]

Here’s a story (starts at 38:10) that gets to the heart of the problem. Here are two stock holders who own a combined 13% of the company, and trying to get a CEO who’s paid way more than similar CEOs to take a pay cut. These are owners of the company, and yet after a decade, they cannot get a CEO who by all means is over paid (and whose take home pay over a decade is more than the profit the company had made in the same period of time).

To me, this is the heart of the problem. Back in the robber baron days, these people actually owned the companies. They built those companies. These companies actually produced goods and services many people used and depended upon. They sometimes did nasty stuff to get their company to grow and and used their influence to protect their companies, but they were the ones who built them.

Today, many of the people who have truly outrageous salaries aren’t the owners, but just the people who happen to run the company. The boards are under their control, and not the stock holders’. They pay themselves outrageous compensation, take unheard of risks, and somehow keep insisting they deserve what they get.

Jack Welch was the highest paid CEO in the country in his years at GE, yet for some reason, he had GE pay for his dry cleaning and for his mistress’ apartment. If you’re going to pay a guy $65,000,000 per year, he should pay his own damn dry cleaning bills. And, if you’re going to cheat on your wife, you should do it on your dime. This isn’t compensation, this is entitlement.

[sbunny8]

@Shodan

Quote: (Originally Posted by sbunny8)
#1 How many hours per week does the average person have to work to get the basic necessities of life: food, clothing, shelter?

You conveniently cut off the rest of what I said about working hours in the US, where I said Fifty years ago, a dad could work 40 hours per week and earn enough money so the mom could stay home with the 2.5 children. Now, the dad works 50 hours and the mom also works 50.

@Shodan

Quote:
Most countries in the developed world have seen average hours worked decrease significantly.[19][20] For example in the U.S in the late 19th century it was estimated that the average work week was over 60 hours per week.[21] Today the average hours worked in the U.S is around 33,[22] with the average man employed full-time for 8.4 hours per work day, and the average woman employed full-time for 7.7 hours per work day…
Cite.

Okay my numbers were off. I should have said the dad now works 42 hours per week and the the mom now works 38.5 hours per week, which adds up to a total of 80.5 hours. Compare that to 1964 when dad worked 40 hours and mom worked ZERO, which adds up to a total of 40.

In the very article you linked to, under “History”, it says that the workweek dropped to about 40 hours/week after World War II. Then, just a few paragraphs later, under “Gradual decrease in working hours”, it points out that the slight drop in number of hours worked per person is partly due to the fact that more women entered the work force. So, like I said In 1964 one person could work 40 to earn a living for a family, but now in 2014, it takes TWO people working a total of 80 hours to earn a living. That means we are working more hours to reach the same goal.

@Shodan

Quote: #2 What percentage of the population is homeless? It’s great that the average person sleeps in a 3-bedroom house but that’s not much comfort to the person who’s sleeping in a cardboard box.
Actually on the street? About 0.0007%. Cite.

Okay, first of all, it would be a lot more helpful if you would link to a specific source instead of just the entire wikipedia article for the general topic we’re discussing. Second, the population of the United States is about 320,000,000 and 0.0007% of that would be just 2,240 people. Are you seriously claiming that there are only 2,240 homeless people in the entire US? Because I can’t find anything remotely like that claim anywhere on the wikipedia article you linked.

The section under “Who are the homeless” suggests the number living on the street would be more like 214,000 (not counting the ones staying in temporary shelters) which is about 0.07%, or one person out of every 1,500.

@Shodan

I don’t have anything like exact figures, but something like 83% of the US populace has some kind of health insurance, and some of the rest are covered by Medicaid or charity care. (Cite.)
Let’s see your figures, then. Specifically, what percentage of the US population was living on the street in 1964, how many hours it took to earn the basics of life in 1964, and what percentage of the populace had no access to health care in 1964, as compared to today.

I’ll admit I may be wrong about the percentage of homeless people. All the numbers I’m looking at say it’s difficult to get exact numbers for 1964 but it looks like the percentages might be roughly the same as 2014. As for the second one, I already answered that. In 1964 it took 40 hours of work per family and in 2014 it takes 80 hours of work per family. As for the third, I honestly didn’t expect someone would challenge my assertion that health care is more expensive now than it was 50 years ago. I thought it was obvious. I guess that’s what I get for making assumptions. Yeah I know the majority of people have health insurance (like me) but still don’t go to the doctor when they should because they can’t afford the deductibles and copays (like me).

[elfkin477]

@sbunny8

As for the second one, I already answered that. In 1964 it took 40 hours of work per family and in 2014 it takes 80 hours of work per family.

In order for this to be a meaningful statistic, you need to show that the buying power of whatever your typical working 40-hours-a-week 1964 Dad is the same as a couple who work a combined total of 80 hours a week’s.

[Shodan]

@sbunny8

The section under “Who are the homeless” suggests the number living on the street would be more like 214,000 (not counting the ones staying in temporary shelters) which is about 0.07%, or one person out of every 1,500.

You are correct, and I messed up the percentage calc. About 0.07% is correct.

I’ll admit I may be wrong about the percentage of homeless people. All the numbers I’m looking at say it’s difficult to get exact numbers for 1964 but it looks like the percentages might be roughly the same as 2014.

On what are you basing the assertion that the percentage of homeless is the same as in 1964?

Regards,
Shodan

[Shodan]

[QUOTE=sbunny8]
#1 How many hours per week does the average person have to work to get the basic necessities of life: food, clothing, shelter?
[/QUOTE]
In 1950 or thereabouts the average family spent about 40% of its income on food and clothing. Currently it is less than 20% (cite). Housing has gone up from 28% to 33%. (Cite.) Health care is about unchanged. The changes are that we spend a lot more on entertainment, and especially cars and transportation.

Regards,
Shodan

[Deeg]

@qazwart

Here’s a story (starts at 38:10) that gets to the heart of the problem. Here are two stock holders who own a combined 13% of the company, and trying to get a CEO who’s paid way more than similar CEOs to take a pay cut. These are owners of the company, and yet after a decade, they cannot get a CEO who by all means is over paid (and whose take home pay over a decade is more than the profit the company had made in the same period of time).

I didn’t watch the video so my apologies if this is covered but I’m not seeing the problem. 13% is a very small portion of the company. If the other 87% of stock-holders like the job the CEO is doing (at his salary) why should the 13% have the final say?

[sbunny8]

@Shodan

You are correct, and I messed up the percentage calc. About 0.07% is correct. On what are you basing the assertion that the percentage of homeless is the same as in 1964?

First, let’s take the 2009 numbers and scale them back to allow for the population growth of the US. In 1964 the population was 192 million, vs. 307 million in 2009. So when the wikipedia article says 643,000 homeless in 2009, of which 2/3 were in temporary shelters, leaving about 0.07% sleeping on the street, that’s equivalent to 402,000 total homeless in 1964, with an unknown fraction sleeping on the street. So if the actual number in 1964 was less than 402,000 then we’d have a higher percentage now than we did then.

I’m having trouble finding reliable statistics going back to 1964 but here’s a source from April 1985 which talks about a report from October 1984. This is from the GAO.

No one knows how many homeless people live in the United States because of the many difficulties inherent in counting them. As a result, there is much disagreement over how big the problem is. Estimates range from a low of 250,000 to 350,000 nationwide by the Department of Housing and Urban Development (HUD) to a high of 2 to 3 million by the Community for Creative Non-Violence, a Washington, D.C.-based advocacy group and shelter provider. Although widely reported, the reliability of both of these estimates is questionable. Despite the disagreement over the size, there is agreement that homelessness is increasing although there is no reliable data to identify how much it is increasing.

Later, that same report goes on to say that a “major factor” for the increase is “Increased unemployment in the late 1970’s and early 1980’s.”

If we just stick with the HUD numbers quoted in that report, we have 300,000 homeless in 1984, an increase from previous years at a rate of “10 percent per year between 1980 and 1983”. This would put the 1980 numbers at about 200,000. Unfortunately, this is where the trail goes cold. I can’t find hard numbers earlier than 1980. So maybe it was 100,000 in 1964 or maybe it was 400,000.

Like I said, that’s a pretty wide range of possible values and at this time I still think it’s likely that the 1964 numbers were lower than the 2014 numbers but I admit the possibility that the reverse is true or that the numbers are the same size.

[Shodan]

Estimates range from a low of 250,000 to 350,000 nationwide by the Department of Housing and Urban Development (HUD) to a high of 2 to 3 million by the Community for Creative Non-Violence, a Washington, D.C.-based advocacy group and shelter provider.

If I am not mistaken, the Community for Creative Non-Violence is the organization founded by the late Mitch Snyder (late because he committed suicide some years ago.) If so, I am not inclined to accept the two million homeless estimate, which Snyder made in his book in 1982 but later admitted he had simply made the figure up.

In 1964 it took 40 hours of work per family and in 2014 it takes 80 hours of work per family.

Not if they are spending a smaller percentage of their income on food and clothing.

Regards,
Shodan

[sbunny8]

@Shodan

I am not inclined to accept the two million homeless estimate

I agree, those numbers seem unreliable. That’s why I did my calculations with the numbers from HUD and ignored the 2-3 million estimate.

But, it is worth noting that it’s possible for both 300,000 and 3 million to both be true if they are measuring different things. It’s possible that 300,000 was the average number of homeless people on any given night but 3 million was the total number of people who were homeless for at least one night some time during the year. Similarly, asking “Are you out of work right now?” and “Have you been out of work some time in the last year?” can give vastly different answers.

[qazwart]

@Shodan

Not if they are spending a smaller percentage of their income on food and clothing.

Over the past 50 or so years, the cost of a lot of things have gone down in comparison to the rate of inflation. The cost of electronic goods is certainly a lot cheaper. The cost of communication is much, much cheaper too.

However, medical care and housing has skyrocketed. In the 1960s, my father bought his house (a fairly large and expensive place) for $39,500. That year, the average American family salary was $17,000. That is, the cost of the house was 2.3 times the average family annual salary.

The same house is now worth over $525,000. The average family annual salary is around $55,000. That house is now worth 9.5 times the average family salary.

Over the last 30 years, salaries have stagnated for the middle tier. They have fallen for the bottom tier. They have greatly increased for the very top tier. In the 1980s, the top 0.1% owned about 7% of total U.S. wealth while the bottom 90% controlled about 35%. Now, the top 0.1% controls about 23% of the wealth while the bottom 90% controls the same percentage.

It is interesting to do a bit of algebra and look at the top 10% without that top 0.1%: Their share of total wealth had not changed. These are families earning between $115,000 to about $300,000 per year. They still are able to afford homes, and found many of their expenses have gone down. They can buy fancier electronic gadgets, eat out more, take more vacation (since many of these things have fallen compared to the rate of inflation). They can afford things their parents never had. Yet, at the same time, even though they should be considered upper income, their lifestyle is very similar to the typical American Middleclass Lifestyle that we’ve imagined since the 1950s.

These are the people who set policy. These are the people who make their opinions known. These are also the same people who pay the most in income taxes too. The very top .1% shift most of their earnings into capital gains which is taxed at a much lower rage.

This is why America seems so blind about the great increase in income inequality. The top 10% (minus that very top 0.1%) haven’t seen their lifestyle deteriorate over the last 20 years like many people in the bottom 90% have. They can still afford to send their kids to college, and believe their children will do okay too. As long as this top 10% don’t feel threaten by the great concentration of wealth, I doubt you’ll see too much done on it.

I’m definitely in that top 10%. I have a nice house, sent my kids to college, and can pay my bills on a regular basis. For me, life is fairly comfortable, and my lifestyle isn’t any different from my parents. To me nothing has changed in the last 50 years. If I was in that bottom 90% earning a mere $90,000 per year, I would have seen the deterioration of my lifestyle and the slipping away of that middle class dream. My kids might have still gone to college, but leave in great debt. I would know their lives would be even worse off than mine financially.

As I’ve told my friends, I as radical and left wing as you can get with a well stocked 401K plan. Revolution? Line up the capitalist bourgeois against the wall? Gee, I don’t know. How will it affect my 401K?

[XT]

[QUOTE=qazwart]
However, medical care and housing has skyrocketed. In the 1960s, my father bought his house (a fairly large and expensive place) for $39,500. That year, the average American family salary was $17,000. That is, the cost of the house was 2.3 times the average family annual salary.

The same house is now worth over $525,000. The average family annual salary is around $55,000. That house is now worth 9.5 times the average family salary.
[/QUOTE]

You are comparing apples to orangutans. The average cost of a house in the US is something like $180k with is only slightly worse than the 2.3 times annual salary, and even with the heavier restrictions due to the 2008 crash it’s much easier to get a house today than it was in 1960. Unsurprisingly, the percentage of Americans who own a house has crashed since 2008 (from a high around 70%), but it’s still higher than in 1960 (from memory it was around 62% then and it’s stabilized around 65% today and shows some sign that it might be bouncing back from the crash).

[Steve_MB]

@Shodan

You are correct, and I messed up the percentage calc. About 0.07% is correct.

It’s a bit difficult to take you seriously when you obliviously such post obvious errors.

I am reminded of one of Hal Clement’s anecdotes about one of his students who multiplied instead of dividing by Avogadro’s Number, and as a result got an answer for an ordinary-human-scale chemistry problem that equalled the mass of ten Milky Ways (“and I don’t mean the candy bar”). That was marked down more severely than the usual run of arithmetic errors, losing extra points for profound cluelessness.

[drewder]

You know what I have never seen? A skinny homeless person in the united states. I work in D.C. so I see plenty of homeless people yet somehow they’re all fat. This isn’t a quality that is universal the world round.

[wonky]

@drewder

You know what I have never seen? A skinny homeless person in the united states.

Well, gosh, if you’ve never seen it, it just must never happen.

[Shodan]

@Steve_MB

It’s a bit difficult to take you seriously when you obliviously such post obvious errors.

I think you meant “obliviously post such obvious errors”.

Regards,
Shodan

[drewder]

@jsgoddess

Well, gosh, if you’ve never seen it, it just must never happen.

According to the Hunger-Obesity Paradox from the journal of Urban Health only 1.6% of homeless people are underweight and around 1/3 are obese. These numbers match the general population which is 27% obese and 2% underweight according to 2007 to 2010 data collected by the National Center for Health Statistics. If anything homeless people are fatter than the rest of us because cheap and easy food in America tends not to be the best nutrition-wise.

By the way your argument is the equivalent of saying just because you’ve never seen the loch ness monster doesn’t mean it doesn’t exist.

[drewder]

One of the problems with this debate about income inequality is that it’s being made about statistical categories rather than about people. Although it is true that the top 20%'s income has increased more than the bottom 20% it isn’t true that the poor got poorer and the rich richer if you follow individuals. If you follow the people who were in in the bottom 20% in 1996 by 2005 those same people’s average per person income rose 91%. In that same time period those who were in the top 20% of 1996’s income only saw a 10% increase in their income by 2005, and those in the top 5% and 1% actually fell.

“Movin’ on Up,” WSJ Nov 13, 2007 p A24