by Tyler Cowen
on November 28, 2012 at 3:02 am
in Data Source, Economics
The source is here.
Doesn’t look so doomsday now…..
And it looks even less doomsday when you lengthten the time scale..
Oops, wrong link:
That just makes it look like the doomsday was in 1972. Remember, the year the Kochs took over.
We probably should look at the earlier inflections seriously. I think they’ll show the dual impacts of globalization and automation, but we can see. (If true, it would imply we should not be euphoric about driver-less cars. My neighbor, who maintains for a nice house and is a good member of the community, drives for a living. Millions do. I’m not saying we should block technology, but you know, people like him might join everyone else displaced by a robot.)
As I keep harping on in other threads, more and more of us ALL will be replaced by robots, especially as the world’s population begins to decline and get much older.
How society deals with distributing wealth when most physical and service activity is performed by machines may be the biggest issue our species has faced in centuries.
Early 20th century economists predicted 15 hour work weeks. Early 20th century science fiction writers predicted lotteries to see who would get to work. They expected the surplus to be distributed, yes.
And where is a source for the seasonally adjusted U.S. household median size?
Household size is a red herring. If you like, you can look at median wages of single v. married men (even white men to avoid changing demographics) and they tell essentially the same story. The one positive development is that female median wages have increased over this period. However, that also means that household size (especially number of children per couple) is endogenous.
Question for the board. What is median income per capita? Does it assume only adults with jobs? I assume so. No old people, no youngsters. Here is a chart at variance with this data: http://en.wikipedia.org/wiki/Median_household_income I note that these stats don’t mean much for DC residents: anybody making less than about $100k USD in Fairfax County VA is in the lower class IMO. Here in Greece, about USD $30k is a good household income, and you can get by on half that amount. In SE Asia, you can get by with around $5k USD a year no problem, and with a roommate half that amount.
Looks like an unexcusable fairlure of the Fed to maintain NGDP growth at ~5%
Begs the question…
Ray Lopez – No the data doesn’t assume only adults with jobs. The report that the chart came from is here – http://www.sentierresearch.com/reports/Sentier_Household_Income_Trends_Report_October2012_11_26_12.pdf. The notes on estimation methods on p6 indicate that the data include people receiving unemployment payments. So to a large degree the chart has to be taken as a reflection of the rate of unemployment. To me that makes it a little less interesting than it might appear at first glance.
Um… People aren’t percentiles, income typically follows a “career arc”, and the baby boomers are a demographic “thing”.
Longitudinal data, please.
+1, and by quintiles. Also show the distribution–top .1% and 1% show an amazing story, which makes a mean misleading.
I guess you missed his point about longitudinal data.
No, that is not what logitudinal means, if you are thinking it means percentiles which is a different subject. The point about longitudinal data means: take an age cohort of 20 year olds; next year look at the cohort of 20 year olds, and the cohort of 21 year olds. The mix of ages in the population determines the median; longitudinal looks at changes from year to year in the cohorts.
Longitudinal does not mean quintiles or percentiles of a population in two different periods uncontrolled for changes in cohorts. See http://www.irp.wisc.edu/publications/focus/pdfs/foc261e.pdf
I think Brian meant following what happens to individuals versus a group like the top 1% or 0.1% where you are not comparing the same people. A lot of the blather about inequality misses this key point.
I said that Brian did not cover the top 1% and .1% as an objection to the graph, and that’s why I pointed it out. You responded as if a longitidual look would cover the 1% and top .1%, making my comment redundant.
I’m glad you understand what longitudinal is and is not; but I do not understand why you consider growth in inequality blather.
Maybe its your problem, not mine.
Someone needs to brush up on their Tufte, because that is a really, really bad graph. Even knowing it couldn’t possibly be true I had to take multiple looks to discover that household income had dropped by a bit under 10% over the course of the graph, rather than 50%.
Yes. Also it makes a pointless normalization (“seasonal adjustment” for a long term graph), while leaving out demographics. How have the incomes of working age families (parents 30-50s) changed, and how many have just retired?
This gallup data on who is “thriving” (self-reported, 2008-2012) says that the bounce back from the Great Recession was pretty fast, but, lower reports of income and greater reports of “struggling” start to appear in “middle” ages. That only half of respondents ages 45-64 report “thriving” is pretty bad.
That damn evil genius Bush! He sits down in Texas with that smirk and he shoots out mind-rays, in a kind of thought control, making income go down. Can’t we just imprison him on some charge? Like that filmaker who killed our ambassador.
It’s Theology not economics.
Your Savior Obama, with His disciples Bernanke, Geithner, 8,000,000 bureaucrats, know that it is more difficult for a rich man to enter Paradise than for a camel to pass through the eye of a needle.
Therefore, He, peace be upon him, is making all of you destitute so that you will not suffer eternity in eternal disgrace and unquenchable fire.
Let’s combine households then.
Indeed, household income did not follow productivity gains. Interestingly, this mismatch did not start at the same point in time for all advanced economies:
http://livingstandards.org/final-report/gaining-from-growth-a4.pdf (the section around page 33 is quite enlightening)
For example, the wedge between median salaries and productivity only appeared in 1990 in the UK, way after that in the US. Why where the outcomes different.Were the Reagan and Thatcher administrations that different? Better cross-sectional analysis will no doubt provide a lot of solutions. to the “great stagnation” of median incomes.
Thanks, interesting paper.
In fact, I found it on this blog on Nov 18. I simply rephrased Tyler’s post (very poorly, I might add).
I have not been a “dedicated reader!”
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