Was recently sent an article:
…based on a Census table:
http://www.census.gov/compendia/statab/2012/tables/12s0696.pdf
…that seems to indicate refute the oft repeated statement ‘the poor are getting poorer’.
What say you minions? Are the poor getting richer in the good old U.S.A.?
The question isn’t, did they get poorer, but did they get a respectable share of the wealth increase.
Two points from the Census website
1970 to 2010, population increased 50%, 200M to 300M
1970 to 2010 GDP (in chained 2005 dollars) Tripled $4.3T to $13.2T
Per Person GDP went from $21K to $44K, constant dollars.
Over that same time period, median household income went from $45K to $51K a 13% increase, over 40 fucking years, when personal GDP more than doubled.
Now you’re going to tell us all that we should be happy because, after doubling our fucking productivity, the ruling classes haven’t rewarded us by reducing our incomes in constant dollars? Thank you, sir, for allowing the masses to partake of a tiny slice of our economy’s wealth explosion, while you keep the remainder for yourself. We don’t really like nice things anyway.
Well, you can be happy or not at your own choosing, but “we” did not double our productivity. Some of us probably did, but “we” did not collectively do so.
Are the clerks at McDonald’s more productive because they invested in their skills or because McDonald’s invested in tools that increased the productivity of the same worker?
Is the bank clerk more productive because he invested in skills upgrades or because the bank installed 4 ATMs outside and set up on-line banking so the bank can do the same or more amount of business with fewer employees?
I can’t really argue against your logic. If someone invests in productivity technology, it’s logical to expect them to reap all the benefits of that technology.
When it comes to public policy, however, this logic is ignored. The narrative does not acknowledge that the wealthy stakeholder intends to reap all the benefits of wealth creation. We are given arguments that include the following buzzwords/concepts:
A rising tide floats all boats
Trickle down
Supply Side
Job Creators
Conceptually, we have been told that changing public policy to allow the wealthy to keep more of their money would provide benefits to the non-wealthy over time. You have shown why that is a heaping load of BS. The wealthy create something, they expect to reap all the benefits of it. That’s not even a criticism, it’s totally understandable.
Why would people expect the wealthy to share productivity improvements with the workforce? Because Reagan and Bush told us that’s how it would work.
I’m not advocating anything, standing for any ideology, or pitching any specific idea. I’m just asking if the Poor are getting Poorer. I also was given this:
Which seems to also indicate that they aren’t. I’m looking for a counter argument, or to see if the data is skewed to support an argument.
Just to be clear, I didn’t say that they should reap all the benefits. I wouldn’t claim to know how this extra wealth should be distributed, but my initial response would be that the market should decide that. If we, as a people, decide the market isn’t doing what we want, then we can decide to tax some of that wealth and redistribute it.
Eh. When you see me or someone else in this thread making that argument, you can bring that up as a counter-argument.
In absolute terms? No, as your chart shows.
What the chart also shows is that they poor have a smaller share of the total income pool.
It’s a ridiculous question to ask. Nobody has argued that the poor are absolutely poorer than in the past. They’re not. The US is much wealthier than it used to be, and some of that wealth has gone to pretty much everybody.
What has actually been claimed is that the poor are relatively poorer compared to the average than in the past. And your own chart shows this quite clearly. And, unless one has a very literal and utterly impractical frame of mind, that’s what we take to mean “the rich get richer”. Not that they are making more money than before (everybody has been doing that) but that they are also taking a greater share of the wealth than before.
Whether or not this is a good thing is of course a matter for some debate.
You conflate household incomes with GDP per person. The average household size has gone from 3.1 to 2.6. If you adjust household income per person. The median income per person in a household has gone from 14,510 to 19,610 an increase of 35%.
Also remember that the number of immigrants in the US has tripled from 9.6 million in 1970 to 26. Given that immigrants make less than half the average native’s income that is a downward pressure on the median income.
I don’t think the chart shows that the poor are getting richer. The chart does not track actual people but rather numbers of people in certain income brackets. There is no way of knowing from the chart whether the people who started out poor moved to a different bracket or stayed poor.
What it does show is that what used to be called the middle class is shrinking, what used to be called the poor is staying the same size and what used to be called the upper class is growing. That is different from the left wing talking point that the middle class is becoming poor and soon the only types of people will be the oligarchs and the people who are able to scrape out a living carrying their litters and peeling their grapes.
Bolding mine.
The “market” is manipulable. There are so many provably false assumptions in market theory that its little more than a useful thought exercise.
Historically, wages and productivity have increased at comparable rates. Then sometime in the 1980’s there was divergence and the owners of capital got a much larger share of the product than the owners of labor.
I would say that the minimum wage should track inflation and that the general wage rate should track productivity. The minimum wage is easy to legislate. Getting general wage levels to track productivity would require more effort but would (I think) ultimately be more beneficial to our economy than a minimum wage.
Huh? What? Dude, you start off so well, and somebody brings up a weak-ass argument like that and you fold like a cheap tent?
“The bank” didn’t invent computers or install ATMs or write the code for the software. People did. Specifically, people whose jobs involve installing things, writing code, and inventing stuff.
Why should the bank - meaning the bank’s shareholders - reap all the rewards, while the inventors and coders and installers get none?
No, no, no. Why should the workforce get a share of increased productivity? Because it’s the workforce that increased productivity in the first place.
Did they not get paid for their work? Why should they get anything more than the wage they contracted for? If you’re a coder and you want to work for profits instead of a salary, go for it. Negotiate your contract that way, or open your own business. Then you’ll be putting your own assets on the line and sharing the risk.
But if you’re going to insist that everyone ‘reap the benefits’, then I assume you’d be okay with those workers having their pay docked if the company starts losing money?
One of the features of wage labor is that it insulates the employee from risk. You get paid whether or not the new thing you helped build actually works or succeeds in the marketplace. Since you’re not putting up any of the capital, and you’re not putting your own assets at risk, you get paid a wage and not a percentage of profits. That’s the way the system works and it’s a good thing for workers.
Really? Always? If a smart manager rearranges the machine layout in a fast-food place and therefore increases productivity 10%, just how did the workers contribute to that? If I go into a factory and do an analysis that allows them to modify their processes to reduce their rejection rate by 10%, which workers helped improve productivity besides me? If a factory owner coughs up $1 million of his own money to upgrade his machinery and gets a 20% productivity increase from the new machinery, which workers should get the benefits? The guys operating the machine? The people who installed it? What about the people who worked on building the machine in the first place?
Assuming that’s true (I haven’t seen the numbers) it seems entirely plausible that before the computer revolution productivity gains were much more closely tied to labor performance, and you would expect wages to track productivity more closely. That period was also marked by a rapid increase in the education of the work force and the rise of high-paying technical jobs. But a lot of productivity gains since then have been through process improvement and automation, which doesn’t have anything to do with how effective a specific worker is.
Ridiculous. Wages should have nothing to do with general productivity, but simply on the value an employee adds with his/her labor. If you want to make more money, find a way to make your labor worth more to employers. You should not get to free ride on the productivity improvements of others.
Absolutely this. If an employer provides his 5 employees with better tools that make them twice as productive, the employer (who invested capital in better tools) is the one that deserves the extra revenue.
Now, I would wholly identify with the argument that, if 1 of those five employees is producing twice as much as any of the others, that one employee deserves to be paid twice as much. This is a problem I find with some union agreements - everyone that does the same job gets paid the same regardless of how productive they are, so there’s no incentive for anyone to work harder than anyone else (outside of some nebulous "you might get promoted " or “you are less likely to be laid off”.).
The rise of technology has largely contributed to a rise in productivity, but it’s capital improvements that use that technology that brought it into the workplace, not labor improvements, so it makes sense that the boon from the increase goes to the place it came from.
Only a very one-sided one.
Yet the debate never seems to end, even if it’s usually only the one side that uses facts and figures rather than platitudes.
Let’s add a couple more years of data, courtesy of Income, Poverty, and Health Insurance Coverage in the United States: 2011, Table A-2 on pp.38-39. Looks like the 2011 incomes of the 10th and 20th percentiles are basically where they were back in 1994, and below where they were in all the years in between.
So if the poor are getting richer, they haven’t been doing it lately. Hell, the incomes of families at the 10th and 20th percentiles have only increased by 1% and 2%, respectively, since 1973. So they haven’t gotten noticeably richer over the past four decades, unless it’s miraculously happened in the past two years.
“The people” did this? All “the people”?
So, if you hire a painter to sprue up your house before you sell it, you are going to give that painter a share of the profit you made on the house or are you going to pay him what he quoted you to paint the house?
It’s a losing argument. On a micro level, an individual business, it’s simple to see how a business owner who improves his business should get the benefits of the improvement, not the staff who had no part in creating the improvement.
On a macro level, you get our stagnant wages and increasing wealth disparity, which is not healthy. You can’t go from the macro level to the micro level and expect a business owner to willingly share in the profits.
This is difficult in a landscape where employees are increasingly thought of as a liability instead of an asset. Companies work very hard to minimize the value of their workforce, they install systems to do all the thinking, automate everything possible, and whatever is left over can be done by anyone with opposable thumbs.
The death of the American Union is another factor here. When unions were in force, they could collectively bargain and get the company to give up some of their productivity profits to the workers. Now unions are mostly public sector, there’s much less opportunity for unions to affect the wage landscape for the typical worker.
Well, I would expect companies to want to automate everything possible - if done right, it’s far less error-prone and far more efficient. And when anything left over can be done by someone with opposable thumbs, why is that labor more valuable? In fact, that labor is less valuable because the valuable part is done by a machine.
Obama said something in the “Town Hall” debate with Romney that I found very compelling when he said that the low-skill jobs Americans once enjoyed are gone and they aren’t coming back. Whether they are gone because of out-sourcing to cheap labor or from technological improvement, they aren’t coming back and bemoaning the lack of high-paying jobs for low-skill workers isn’t going to fix that.
Now, I don’t think those workers should be thrown out on the street, but we as a society are bad at making investments in other people.
The problem is that this produces a top heavy economy that is unsustainable. The rich get richer and do so in such a way that requires less labor. As a result there is a labor glut, which means the the employers can afford to pay less and request more hours without fear of losing their workforce. So the only people who are making money are those who already have money. So you have 1% of the population controlling 40% of the wealth and this imbalance increasing. The problem is that even if they are very rich, 1% of the population can’t sustain 40% of the consumerism. So demand starts dropping. Which makes the owners lay off unneeded workers which then increases the labor glut, reducing wages and increasing hours and so on and so forth until an outside force steps in to manage the economy, or else the revolution occurs.
The problem that conservatives have is that they tend to view increased GDP as the end goal. As long as someone is making money somewhere it doesn’t matter who. In fact increased wealth shouldn’t be an end in itself. Wealth only serves a purpose if it has the practical effect of increasing a persons well being otherwise its just numbers on a page. Given that the relative utility of a dollar goes down as an individuals total wealth increases concentrating wealth at the high end is massively inefficient. The goal of economic policy should be to maximize the prosperity of its citizens not just the value value at the bottom of the balance sheet.
Or to put in another way
[QUOTE=Douglas Adams]
The people living on [the earth] were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small green pieces of paper, which is odd because on the whole it wasn’t the small green pieces of paper that were unhappy.
[/QUOTE]