Just for reference, in case anyone would like to see a handy visualization of (inflation adjusted) income growth between 1947 and 2012:
http://public.tableausoftware.com/views/INCOMESMASTER/Dashboard1
The contrast between the 1947-1979 period and the 1979-2012 period is rather stark.
Quote from: nathanm on September 27, 2013, 03:29:23 PM
Just for reference, in case anyone would like to see a handy visualization of (inflation adjusted) income growth between 1947 and 2012:
http://public.tableausoftware.com/views/INCOMESMASTER/Dashboard1
The contrast between the 1947-1979 period and the 1979-2012 period is rather stark.
The rich are getting richer. The poor are getting richer too. Do you think these are the same groups of people over time?
Use your noodle. This discounts income mobility.
Here is a nice little study on income mobility from the Treasury Dept. The thing that is amazing and should really be celebrated as evidence that this is without a doubt the best country in the world **chants USA USA** is that far more of those at the top today used to be in the middle and bottom.
If you continue to cultivate the habits of the wealthy, you have a very high probability of becoming wealthy.
http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf
This study examined income mobility of individual taxpayers age 25 and over for the
period from 1996 through 2005 using information reported on individual income tax
returns. The key findings are that there was considerable income mobility of individuals
in the U.S. economy during the 1996 through 2005 period and that the degree of income
mobility among income groups is unchanged from the prior comparable period (1987
through 1996).
The analysis found that more than half of taxpayers (56 percent by one measure and 55
percent by another measure) moved to a different income quintile between 1996 and
2005. About half (58 percent by one measure and 45 percent by another measure) of
those in the bottom income quintile in 1996 moved to a higher income group by 2005.
Economic growth resulted in rising incomes for most taxpayers over the period from
1996 to 2005. Median incomes of all taxpayers increased by 24 percent after adjusting
for inflation. In addition, the real incomes of two-thirds of all taxpayers increased over
this period. Further, the median incomes of those initially in the lower income groups
increased more than the median incomes of those in the higher income groups.
The analysis also found that the composition of the very top income groups changes
dramatically over time. Less than half (40 percent or 43 percent by different measures)
of those in the top 1 percent in 1996 were still in the top 1 percent in 2005. Only about
25 percent of individuals in the top 0.01 percent in 1996 remained in the top 0.01 percent
in 2005.
How do these income mobility numbers work on people like Paris Hilton? She technically had no money when she was say.. She might inherit a ton. Is that considered mobility?
Quote from: CharlieSheen on September 27, 2013, 03:58:15 PM
How do these income mobility numbers work on people like Paris Hilton? She technically had no money when she was say.. She might inherit a ton. Is that considered mobility?
I think the more important question is WHO CARES!
Well, I suppose some people care. In fact I know several people who would rather focus on the envy of others and cry "UNFAIR" than focus on their own opportunities.
We had a wonderful example of this flavor of entitlement with the flair and fizzle of the occupy movement.
There will always be those who enjoy wealth by circumstance, and those who suffer poverty through the same. "Fair" is not a concept that exists in nature, but "evolution" is. It's not what you have that is important, it's what you strive to become.
Freekin fortune cookie! :D
Hmm, really, poor are getting richer? Since 1979, the real income of the bottom 20% of the income distribution has dropped by 12%. I guess in bizarro world that is an increase.
As far as income mobility goes, how about this from your compatriots at AEI:
(http://www.aei-ideas.org/wp-content/uploads/2013/07/0723213mobility-600x317.jpg)
Or if you prefer, we can take all income mobility between 2001 and 2007, which biases the result towards upward mobility since the period was one of economic expansion:
(http://www.aei-ideas.org/wp-content/uploads/2011/10/incomemobility.jpg)
It would be interesting to look at the raw data and see how many of the people escaping the bottom 20% were people who were in college with low or zero income in 2001 but had graduated and entered the workforce by 2007. Regardless, for the bottom two quintiles, they were more likely to remain in the same quintile or see their wealth decline than rise, and that was during an economic expansion.
Only the upper two quintiles have significant upward mobility as a group. The middle 20, in that particular time period, were as one would expect, slightly more likely to go up to the next quintile. Not surprising, given the economic expansion at the time.
Even when they cherry pick the period (although that was the Fed's doing), AEI can't show data to indicate that the bottom two quintiles have statistically significant upward mobility. Not surprising, given that they are the ones that have seen declines in real income since 1979. Whether or not you acknowledge it, Gaspar, it takes money to make money.
(On preview, sorry Gaspar, didn't mean to give you apoplexy)
If anyone is interested in how economic changes have affected relatively normal people, try this fine Frontline episode: http://www.pbs.org/wgbh/pages/frontline/two-american-families/
Here are the income levels that consitute a jump in quintile in Gaspars link.
1996 2005
Bottom Under 15,326 Under 19,488
Second 15,326 19,488
Middle 25,787 33,120
Median 31,785 41,242
Third 38,881 51,257
Fourth 60,897 83,138
Top 10% 85,387 120,211
Top 5% 116,425 171,856
Top 1% 284,603 463,615
Quote from: nathanm on September 27, 2013, 04:17:13 PM
Hmm, really, poor are getting richer? Since 1979, the real income of the bottom 20% of the income distribution has dropped by 12%. I guess in bizarro world that is an increase.
He is saying that about half of the bottom 20% aren't in the bottom 20% after 9 years. So those aren't the same people. So if you make $15,000 in 1996 and then get a huge raise those 9 years and make $19,500 then you jumped a quintile baby! You made it to the big time!
Nathan, why do you obsess over this in the first place?
What's your solution?
Quote from: CharlieSheen on September 27, 2013, 04:21:04 PM
He is saying that about half of the bottom 20% aren't in the bottom 20% after 9 years. So those aren't the same people. So if you make $15,000 in 1996 and then get a huge raise those 9 years and make $19,500 then you jumped a quintile baby! You made it to the big time!
This is one of Nate's old dittys. As seen in his last reply, the argument will begin to feature non sequitur examples and shifts. I need to go the way of Conan and become wise enough not to engage him any more.
Ya'll have a good weekend and don't get too poor. :D
I would like to see the mobility from 30 or 35 and up. That would be interesting to see what happens after you get over the job entry raises. Promotions at my job are heavily weighted toward the beginning of your career.
But none of this is new information.
Let's keep in mind that the 31% of people who moved from the bottom quintile to the second quintile moved into a quintile whose lower bound decreased during that time. In other words, their wage may not have changed one iota. And that even the fourth quintile was more likely to drop a quintile than see their wage increase enough to put them in the top quintile.
Basically, Gaspar and the objectivists like to claim that because there is significant mobility between middle and fourth it doesn't matter that the bottom and top quintiles are not (in the main) part of that income mobility. It's working for him, so clearly it can work for everybody! Put another way, rather than a rising tide lifting all boats, we've punched holes in the boats of the bottom 40% so that the tide rises for the rest of us as they sink. (Is it time for a shout-out to Archimedes?)
Conan, I don't think one post every few months counts as an obsession. But if you wonder why I care at all, it's because our country has done its best by all measures of progress when economic gains are distributed across the entire income distribution and not concentrated among those at the very top. Basically, selfishness. I want more cool smile and we're not going to get it if we sideline 40% of our population.
Gaspar, rich of you to accuse me in advance of doing what you've already done. I posted about income growth and you posted some irrelevant smile about income mobility. Talk about a non sequitur. Regardless of whether people move from the bottom 20% of the distribution to somewhere else in the distribution, the fact remains that those who are at presently at the bottom of the distribution make less than they did in 1979. Mobility is completely irrelevant. My bad for letting you lead me off topic.
Nathan. Sheen. You guys rock.
My father was a house painter by trade. He hired lots of crews to paint big expensive homes around town. There are guys who say they can paint. They have all the good tools, spray equipment, all the right color samples and they talk about stains and color matching. Then there are painters. You don't know the difference till you see their finished work.
Quote from: AquaMan on September 27, 2013, 05:32:16 PM
My father was a house painter by trade. He hired lots of crews to paint big expensive homes around town. There are guys who say they can paint. They have all the good tools, spray equipment, all the right color samples and they talk about stains and color matching. Then there are painters. You don't know the difference till you see their finished work.
My mom always told me I looked good in whatever color I was painting.
:D
Quote from: Conan71 on September 27, 2013, 04:23:52 PM
What's your solution?
Stop subsidizing those with incredibly high incomes by allowing them to treat earned income as investment income, or better yet, make all income subject to the same rate structure. Stop making business owners in the middle quintiles subsidize the entry of competitors into the market. Stop allowing utilities to steal from ratepayers. Stop outsourcing government functions to overpaid contractors who chronically under deliver. Stop investing public pension money in hedge funds that charge outrageous fees for worse than index fund performance and then blaming the unions for the pension fund being short. Stop allowing politicians to take bribes as long as they're called "speaking fees" and are paid after the politician leaves office. We don't really need to
do anything. We just need to quit doing some of the things we are doing, because they have led to trillions of dollars in unjust enrichment that would be called theft if you or I did it.
Or maybe the problem isn't the legalized bribery, maybe it's that only 37 Congresspeople are in the bottom 80% of the wealth distribution. That doesn't seem very representative of the nation as a whole. I wonder if anyone has researched how that has changed over time...
Quote from: CharlieSheen on September 27, 2013, 04:28:26 PM
I would like to see the mobility from 30 or 35 and up. That would be interesting to see what happens after you get over the job entry raises. Promotions at my job are heavily weighted toward the beginning of your career.
I agree. I think my promotions/raises (when I get them) should far out strip the younger guys' promotions/raises, whose productivity is rapidly increasing over almost nothing, because I
deserve it. Everyone's promotion/raise should depend strictly on seniority, regardless of their contribution to the employer. After I retire, I don't care what happens to raises because I won't be getting any (raises in salary).
Quote from: Red Arrow on September 27, 2013, 05:43:12 PM
My mom always told me I looked good in whatever color I was painting.
:D
Mom's are good about that. Dad's not so much.
Quote from: Gaspar on September 27, 2013, 03:45:24 PM
The rich are getting richer. The poor are getting richer too. Do you think these are the same groups of people over time?
Use your noodle. This discounts income mobility.
Wow!! The only guy I know (except maybe guido) who can say that a real DROP in income by 25% is also getting richer....the poor. Maybe that would be "getting richer too" just a little bit slower??
That would be as if Mary Failin' claimed that the schools are getting more and more money by cutting their funding by 25%....
Guess this guy didn't notice that people don't get pensions any more and their share of the employer sponsored health insurance has been increasing for most people. Or that the department of labor statistics count the value of fringe benefits as part of the pay package, and thus are already baked in to the numbers. But that's what happens when you start with the conclusion and work backwards from there.
Also, I'm wondering how a near minimum wage worker is supposed to be doing better when the 1981 minimum wage was a buck an hour higher than today's, after adjusting for inflation. But hey, what does reality matter when it gets in the way of ideology?
Quote from: Gaspar on October 07, 2013, 02:07:30 PM
Are you kidding me? What you putting in that barbeque sauce?
Big increases in income because you can buy a "better" tv than 30 years ago?? Just so happens, I bought a very top of the line Sony in 1979. 26" color Trinitron in a beautiful cabinet that was literally a fine piece of furniture. Cost $ 650. Very expensive but lasted about 17 years. Today to get the same "quality" I would have to buy a Sony, probably 42" LCD display PLUS a piece of comparable quality furniture. About $700 for TV and probably on the order of $ 2,000 or so for the furniture. (I have priced the raw materials to build my own, and if I figure in minimum wage - will come back to that in a bit - the cost would be in the neighborhood of $ 1500. $500 profit for the furniture distributor and store.) Still couldn't buy that new tv on minimum wage, just like I couldn't have done that in 1979. No real increase in "wealth" there....
As for "vastly superior" quality - Hah! - that's the biggest joke I have heard in months, if not years. 17 years on the Sony Trinitron, still with an excellent picture when it finally crapped out (capacitors drying out, power supply to horizontal circuit). I would have fixed it, but it was still on last legs. That was part of the dilemma - the furniture part of that was still very nice. Do you or anyone else out there expect to get 17....or even 10 years out of today's LCD tv?? Wanna take bets on that - if you answered yes... Not even comparing apples and oranges (both tree born fruit), but more like comparing apple pie and wombats.
And even if you take the fantasy nonsense this guy is spewing, the reality is still that the 1968 minimum wage is still - in real terms - is 25 to 30% higher than it is today. Of course, that's over 40 years...which would make it even worse.
Plus, his totally bogus BS completely leaves out the whole concept of increased productivity - but that is another one of those hush-hush little secrets the 1% doesn't want the other 99 to understand. Productivity has risen day in, day out, forever in this country since WWII at numbers in the order of 2 % for decades.
Productivity, which measures the goods and services generated per hour worked, rose by 80.4% between 1973 and 2011, compared to a 10.7% growth in median hourly compensation. Where did that extra 40% worth of productivity go? You know.
Here's a little something from the Hartford Business Journal...
http://www.hartfordbusiness.com/article/20130307/NEWS02/303079992/us-wage-productivity-gap-highest-since-wwii
And all that from a guy at a 3rd tier university - WAY down on the ratings.
Ranking - US News and World Distort;
University of Tulsa 86
OU 101
George Mason 141
Quote from: heironymouspasparagus on October 07, 2013, 08:22:25 PM
Big increases in income because you can buy a "better" tv than 30 years ago??
CPI accounts for this already. Many people who were in their politically formative years during the Reagan era internalized the rhetoric and now assume that literally everything the government does is stupid and wrong. In their mind, it's not possible some government bureaucrat might actually understand how to account for changes in the available goods when determining the inflation rate, so the figure must be wrong.
The "oh my god, they have a color TV" in the 80s is today's "look at that flat screen!" Never mind that you can buy a bargain basement 37" TV new for a couple hundred bucks, or even less on craigslist at times and they've been around long enough that they're often given away in families. That's less than the cost of a month of health insurance. Or gas, for a lot of people these days. It's not luxury, it's standard. Like airbags on a car. The one benefit of outsourcing all the blue collar work to China is that electronics have been declining in price faster than low wage worker's pay. Never mind that the price of energy, food, health care, housing, and everything else has not seen price deflation.
You can see anything you want to see if you're willing to pick and choose which data points you are willing to acknowledge and, worse, refuse outright to gain any understanding of the material. First impressions are often wrong because most things are much more complex than they seem on the surface. It's very easy to know the answer when you have only a superficial understanding of the question. Knowing just enough to be dangerous, and all that.
Edited to add: Somehow I edited out some commentary about how his point about benefits is completely specious, as the BLS statistics take into account benefits as well as base wage.
Quote from: nathanm on October 07, 2013, 06:33:07 PM
Guess this guy didn't notice that people don't get pensions any more
My employer doesn't provide a pension but it does contribute to my 401K. I know that not all companies do though.
Quoteand their share of the employer sponsored health insurance has been increasing for most people.
The numbers I have seen have shown the employers cost to go up even when the employees' share has gone up.
Quote from: nathanm on October 07, 2013, 10:34:10 PM
You can see anything you want to see if you're willing to pick and choose which data points you are willing to acknowledge and, worse, refuse outright to gain any understanding of the material. First impressions are often wrong because most things are much more complex than they seem on the surface. It's very easy to know the answer when you have only a superficial understanding of the question. Knowing just enough to be dangerous, and all that.
I think almost everyone here will agree with what you just wrote above. We will probably all also disagree on who is doing that.
Quote from: nathanm on October 07, 2013, 10:34:10 PM
Or gas, for a lot of people these days. It's not luxury, it's standard. Like airbags on a car.
Gas is more expensive but modern cars get better gas mileage. I remember when 15 MPG was doing good.
Of course, no one except Guido can afford a new car. Even a basic econo car today is safer in a crash, better handling and more reliable than most cars used to be. I occasionally wonder what the retail cost of a (just to pick one) Chevy Nova built to 1960s standards would be if built today. Imagine (or in my case remember) radio and heater optional. Power steering and power brakes optional. Mostly the brakes were crappy by today's standards and without dual master cylinders until about 1967. Steering columns that were sure to impale the driver in a frontal crash. Skinny, bias ply tires. Seat belts optional on many cars until the mid 60s. Crush zones might have been on Mercedes. Cars cost a lot more today in adjusted $ but there is a lot more value too.
Quote from: Red Arrow on October 07, 2013, 11:29:08 PM
Gas is more expensive but modern cars get better gas mileage. I remember when 15 MPG was doing good.
Of course, no one except Guido can afford a new car. Even a basic econo car today is safer in a crash, better handling and more reliable than most cars used to be. I occasionally wonder what the retail cost of a (just to pick one) Chevy Nova built to 1960s standards would be if built today. Imagine (or in my case remember) radio and heater optional. Power steering and power brakes optional. Mostly the brakes were crappy by today's standards and without dual master cylinders until about 1967. Steering columns that were sure to impale the driver in a frontal crash. Skinny, bias ply tires. Seat belts optional on many cars until the mid 60s. Crush zones might have been on Mercedes. Cars cost a lot more today in adjusted $ but there is a lot more value too.
People also have a lot more purchase power today than they did back then. I'm not sure that's a good thing. A 28 year old with a decent job can go out and buy a house and a car on credit that they would never be able to afford back in the 60s because the same credit mechanisms didn't exist. They can finance the car out to 5-6 years and be completely upside down before ever having a chance to start their lives as adults. Just a couple of decades ago, banks expected people to prove their worth before loaning them money. Now that is considered discriminatory for a plethora of reasons, and so the banks (who, like any business, need to make a profit) have found ways to be ethically predatory towards people to make more profit from those who can pay and makeup for the losses incurred from those who will never pay.
It would be very interesting to see how personal wealth V.S. purchasing power has changed over the years (Nate get on it!), and then debate on whether that is a good thing or not. My stance is that the inflated purchasing power is a bad thing, because it is basically just another form of slavery. Debt is servitude, indenturement to a bank for things you want, but cannot afford.
I used to do work for a company that had a policy to purchase all of their young employees a new BMW. They would get young naive kids out of college as programmers and sales people and pay them 25K + bonus a year, but on their first day, the boss would take them out to BMW of Tulsa and let them pick out their new company car with all the options. Every three years they have the option to get a new one of a higher series (typically as a counter to a raise). Most barely ever make over 40K, but bust their hump every day to keep that damn car! The owner of the company knows what he is doing. The parking lot full of BMWs serves as advertising for the "success" of his company and works as a recruiting tool. The employees typically sell their own cars, and their new ride serves as a rather useless status symbol, but is also their only mode of transportation. The threat of losing their job is amplified by the possibility of losing status and transportation. The job is salary and bonus, so they work unbelievable hours.
I already have been on it. The rise of personal credit started before our grandparents were born and was in full swing before the Depression. It was pretty much standard by the 20s to buy household goods on credit. That was largely what led the usury laws we decided were an evil imposition on the freedom of contract beginning in the 70s. Credit for home buying was also prevalent before the Depression, although typically done like it is in other countries with relatively short term notes that don't fully amortize, so you're on the hook for getting a new loan to pay off the balloon payment. That obviously led to a huge housing bust when credit dried up and people couldn't get a loan for the balloon.
In one big way, Battlestar Galactica was right: This has all happened before, this will all happen again.
Quote from: Red Arrow on October 07, 2013, 11:29:08 PM
Gas is more expensive but modern cars get better gas mileage. I remember when 15 MPG was doing good.
Gas has mostly been cheaper than in the 30's with a couple exceptions until about 2007 or so....a lot cheaper for most of that time!!
https://www1.eere.energy.gov/vehiclesandfuels/facts/2012_fotw741.html
And you can without doubt afford to buy a new car...you choose to put it into airplanes instead. The biggest majority of the people here could afford to buy a new car. Truly excellent new cars start at near $15,000 and go up to what guido spends...and beyond. That is the big difference between now and 40 years ago - government regulations that require a certain level of safety and a very modest nod toward gas mileage...THAT is the ONLY reason you can buy a car today that goes 100,000 miles between tune ups. 7,500 miles between oil/filter changes. Safety performance that gives you a reasonable chance of surviving a 60+ mph head on collision. All kinds of exceptionally good things derive from that pesky "unwarranted government intrusion" into the lives of automakers.
Too bad we got rid of the 5 mph bumper, so repair costs would have stayed dramatically lower than they are today....proportionately. But hey, I guess ya gotta have sellouts in Congress....