# Income Inequality: Startlingly Bad! **URL:** \ **Category:** Great Debates\ **Created:** [March 26, 2013, 6:41pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029 "2013-03-26T18:41:31Z")\ **Posts on this page:** 10\ **Page:** 6
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [April 23, 2013, 11:48am UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/101 "2013-04-23T11:48:10Z")
On the topic of income or wealth inequality in U.S., [a Washington Post story](http://www.washingtonpost.com/business/economy/wall-street-betting-billions-on-single-family-homes-in-distressed-markets/2013/04/21/ac4bdefc-a2e1-11e2-9c03-6952ff305f35_story.html) may be interesting. Middle-class Americans suffered as housing prices fell. It might be good if they could benefit from the present low prices. However … > [@](#): > > Drawn by the prospect of double-figure profit margins on rents and the resale of homes whose prices plummeted in the crash, hedge funds, Wall Street investors and other institutions are crowding out individual home buyers. > … > “There is the possibility that Wall Street and the banks and the affluent 1 percent stand to gain the most from this,” said Jack McCabe, a real estate consultant based in Deerfield Beach, Fla. “Meanwhile, lower-income Americans will lose their opportunity for the American Dream of building wealth through owning a home.” > Real estate executives say institutional investors — who in some cases are bidding on hundreds of homes a day — account for as much as 70 percent of sales in some Florida markets. > … > “The investors are making it hard for a regular homeowner to buy a property,” said Robert Russotto, a broker with Better Homes and Gardens Real Estate in Fort Lauderdale. “They are getting outbid by people with cash.” Russotto noted that out of the 20 home sale contracts he is the process of completing, 17 of the buyers are major investors. I’m not suggesting we need laws preventing the rich from getting richer. Nevertheless we need to acknowledge aspects of our present system do promote inequality. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [April 23, 2013, 1:25pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/102 "2013-04-23T13:25:23Z")
> [@Chief\_Pedant](#): > > A couple of points: > > 1. Confusing wealth with income makes for bad policy. One of our fundamental difficulties is that it is easy to be wealthy and have an artificially low income. It is equally easy to have a high income and pay an extraordinary percentage of that income in various taxes. One of the most fundamental issues we have is wealth disparity, and this is much more complex than income disparity because it’s almost impossible to tax wealth. > 2. The US is relatively unique for being as heterogeneous as it is, as welcoming to legal and illegal immigrants as it is, and being as wealthy in toto as it is. > > What drives low wages is a surplus of workers for any given job all along the spectrum of available positions. If you just want to make a start raising income levels at the low end, get rid of the ten million plus illegal immigrants competing for those jobs (a number roughly equal to the number of unemployed). The guys who mow my lawn, clean my hotel room and wash my restaurant dishes are not typically documented, but they are willing to work their ass off for almost any wage. This is admirable, but from an economic standpoint, creates a surplus of cheap labor that makes it far more difficult for ordinary economics to drive better wages. If the rich have two people competing with one another for the same job to take out the trash, it’s much easier to pay a low wage. A plethora of low wage workers at the lowest end drives down wages all the way up the wage spectrum, each category pulling in increasingly overqualified workers competing for lower-yield jobs; competition for jobs lowers wages when there is a surplus of qualified workers competing for that job. > > We have long since passed the tipping point where such an action (deporting illegal immigrants) is possible, and as a generous and wealthy nation few of us want to refuse admission to our club when we ourselves have benefited so tremendously as historic immigrants, bullying our way in before legal immigration was invented. Economic reality nevertheless always wins, and the plain facts are that we have a surplus of labor for diminishing opportunities in the sorts of jobs that have historically been available to the majority of the population. That we have even been able to retain the income levels we have for the vast majority in such a heterogeneous group is a surprise for me. Your argument does not explain why middle class wages are stagnant, just why lower class wages are stagnant. Unless you are arguing that illegal immigrants are competing to run our IT departments and staff our corporate administrations. THAT’S for LEGAL immigrants! Also, this notion that there is this thing called “economic reality” which is inevitably defined so as to favor laissez faire capitalism … bullshit! ---
**Author:** ![anukulardecider](https://avatars.discourse-cdn.com/v4/letter/a/94ad74/32.png) [@anukulardecider](https://boards.straightdope.com/u/anukulardecider)\ **Post date:** [April 23, 2013, 10:19pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/103 "2013-04-23T22:19:21Z")
> [@Ravenman](#): > > I was thinking about this the other day: if growth in income were more evenly spread among the whole population, how much would the average person really benefit? For example, let’s say over a given period that the income of the top 1% doubled, but for the bottom 80%, income grew by 10% (or whatever). If the gummit took the extraordinary step of seizing all the “excessive” growth in the incomes of the ultra-rich, and limited their income growth to the same rate as the average family, then redistributed all the seized money to everyone else, how much of a difference would that make? Would I get an extra $50 a year, or $15,000 a year? > > I truly have no idea, but I’m curious how the math would work out. The more money the Middle Class and lower income folks have to spend on consumption, more jobs are created by demand. That would be good for us and good for the economy. All one has to do is look at Greece. at the austerity measures, and see what a disaster that has been for the economy. Another thing to think about, do you remember the 50’s and the 60’s? That’s when America was the most prosperous. That was back when the wealthy really did pay a lot in taxes, there was much less income inequality, and a man could work in a factory and support his family. The wealthy paid their share without being big crybabies, and we all had money. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [April 24, 2013, 1:55am UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/104 "2013-04-24T01:55:35Z")
> [@Human\_Action](#): > > That can easily be taken as you validating his assumption. Thanks. Yes, that is exactly what I meant. ---
**Author:** ![Learjeff](https://avatars.discourse-cdn.com/v4/letter/l/94ad74/32.png) [@Learjeff](https://boards.straightdope.com/u/Learjeff)\ **Post date:** [April 24, 2013, 8:21pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/105 "2013-04-24T20:21:30Z")
> [@anukulardecider](#): > > The wealthy paid their share without being big crybabies, I bet you didn’t know many wealthy people at the time. I’m glad you didn’t say “fair share” in any case. In any case, a comparison between 1960 and today isn’t valid, because there was no overseas competition. Furthermore, we can’t prove by this example that high taxes were the source of the general prosperity. It is a data point in favor of that argument, but hardly proof. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [May 14, 2013, 8:59am UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/106 "2013-05-14T08:59:24Z")
The _New York Times_ is [running a series on income inequality (especially in, but not limited to) America](http://opinionator.blogs.nytimes.com/2013/05/12/student-debt-and-the-crushing-of-the-american-dream/). The linked-to article about student debt is by series moderator and Nobel Prize laureate Joseph Stiglitz(\*). Click on “Great Divide” to see the earlier articles in the series. (\* - Watch some right-wing bloviator appear – as he did once when Krugman was mentioned – whose only contribution will be to condemn as irrelevant and prejudicial any mention of Nobel Prizes won by liberals. :smack: ) ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [May 15, 2013, 3:55pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/107 "2013-05-15T15:55:08Z")
From the [RationalWiki page on Occupy Wall Street](http://rationalwiki.org/wiki/Occupy_Wall_Street#Incipient_anti-American_Reign_of_Terror.21): > [@](#): > > **Incipient anti-American Reign of Terror!** > > Then there are those who view Occupy Wall Street’s message as anti-American and generally evil.[14] Rush Limbaugh called them “stupid idiots and tools,”[15] while Glenn Beck said “They will come for you and drag you into the streets and kill you…they’re Marxist radicals…these guys are worse than Robespierre from the French Revolution…they’ll kill everybody.”[16] > > Prepare your irony meters. The U.S.'s income distribution, as measured by the Gini coefficient, is nearing the level seen in _ancien regime_ France around that time,[17] and _even worse_ than those seen in the Roman Empire.[18] ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 3, 2013, 2:38pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/108 "2013-06-03T14:38:12Z")
While browsing miscellania I stumbled upon [a list of the 30 wealthiest Americans ever](http://www.nytimes.com/ref/business/20070715_GILDED_GRAPHIC.html). (Wealth figures have been normalized by making them a percentage of GDP.) The List was created in 2007; checking Forbes’ latest list of top billionaires it seems that Larry Ellison and two Koch brothers would now join the list, so I’ve added them to make it a list of the 33 richest. I prepared a text version of the 30 richest Americans ever (it’s shown less conveniently on that page) but won’t post it lest that violate copyright. _ **But what struck me were the dates** _. Here are the 33 birth years, in order, of the 33 richest Americans ever: 1750 1763 1764 1794 1802 1803 1806 1813 1816 1821 1826 1831 1831 1834 1834 1834 1835 1836 1837 1839 1839 1840 1848 1849 1855 1858 1863 1918 1930 1935 1940 1944 1955 Notice the huge 55-year gap between Henry Ford (born 1863) and Sam Walton (born 1918) with no richest man born in between. When I was a kid, J.P. Getty was spoken of as the richest American but he doesn’t even appear on the list – the decades from the 1930’s through the 1970’s were a time devoid of the super-super-rich. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 3, 2013, 2:48pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/109 "2013-06-03T14:48:23Z")
> [@septimus](#): > > Notice the huge 55-year gap between Henry Ford (born 1863) and Sam Walton (born 1918) with no richest man born in between. When I was a kid, J.P. Getty was spoken of as the richest American but he doesn’t even appear on the list – the decades from the 1930’s through the 1970’s were a time devoid of the super-super-rich. I’m not getting how you came up with 1930 - 1970. Also, is this just an artifact of using “the top 30”? What happens if you use the “top 100”? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 3, 2013, 3:58pm UTC](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029/110 "2013-06-03T15:58:33Z")
> [@John\_Mace](#): > > I’m not getting how you came up with 1930 - 1970. Also, is this just an artifact of using “the top 30”? What happens if you use the “top 100”? The 1920’s were near the height of Henry Ford’s wealth-building; the 1980’s the height of Sam Walton’s wealth-building. (Ford was the last-born of the super-rich of the 19th century; Walton the first of those of the 20th century.) The list I saw at NY Times – extracted by them from a different source, and frequently cited in Wikipedia – had exactly thirty names. If you can find a 100-name list with the same criterion I might repeat the exercise (although looking up birth-years might get tedious). BTW, one “feature” of the list I noticed is that, while it contains a brother pair (in addition to the Koch brothers I added); it contains no father-son pairs; i.e. only one generation is shown per rich family. I think the list-maker thought it would be redundant to list John Jacob Astor’s son for example, despite that he would qualify, mainly via inheritance, for the list. [Previous page](https://boards.straightdope.com/t/income-inequality-startlingly-bad/654029.md?page=5)