Income inequality has stabilized as of late

But from 2007 through 2014, the figure stabilized. Looking at market income, inequality increased by only 3 percent. Once you add in cash payments and in-kind transfers from government safety net programs, inequality actually fell over this period.

That is from Michael Strain at Bloomberg.

Comments

Looking at his chart, the impact seems to be almost 100% derived from the Lehman shock in 2008, but I'm curious about the downward blip later in 2012? 2013? I can't see the date clearly on his chart.

Actually, that's not fair -- absent that second blip downward, inequality wouldn't have fallen between 2007 and 2014; it looks like by any of the measures it would have ended up increasing slightly, after being driven down by the stock market crash.

spoken like a schizo who has never even fathomed the idea of simply tabulating the genome with the stock market in the 1890s.

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That's ridiculous. Inequality fell during the financial crisis because asset prices plumetted. Of course, asset prices have since inflated (thanks, Fed!) putting inequality back on its rightful path, up. I would point out that inequality collapsed following the 1929 financial crisis, and remained low until the 1980s. Since the 1980s, inequality has been on a steady path, up.

The obvious question is why didn't inequality recover following the collapse of asset prices with the financial crisis in 1929, the way inequality recovered after the 2008 financial crisis and the collapse of asset prices. Duh.

What mad scientist has combined Bill with rayward?

+1

what's your ricketty hickory dick say rayward. Mutism, my ass

Did you notice tat Carless, Anon and Clockwork had no substantive response to Rayward's thesis and data.

Studies have revealed that the top one tenth of one percent don't even report roughly 25% of their income (i.e., it's hidden to avoid it being reported). But more important, most of the income of the wealthy is capital income, income that is reported when realized and recognized, if ever (since death forever avoids the recognition of income on capital appreciation). Income to the wealthy isn't something reported on a form w-2, it's something seen it asset appreciation. I'm not complaining about asset appreciation, or even the Fed's response to a financial crisis to prevent asset price collapse. That's for Cowen's Austrian friends.

'Studies'

Cowan is a nice street in Kentucky.

Hmmm. Even if one could precisely measure "Income Inequality" on a continuing, instantaneous basis -- just what would one actually do with that information ?

What is the specific end purpose of such measurement ?

>what would one actually do with that information ?

Complain.

>What is the specific end purpose of such measurement ?

To get Democrats elected.

In case you missed it. Here's the latest report on US inequality:

http://undocs.org/A/HRC/38/33/ADD.1

Report was done by United Nations. It says we are more unequal than any other developed nation among other things. Good reading.

Have any of you heard about RAM? Remote Area Medical. This organization provides FREE health care in areas that where most cannot afford health care.

My understanding is that they started in poor, under served areas overseas. Then they discovered the United States had lots of under served areas. So now they provide free health care to Americans.

Hundreds stand in line to see a doctor.

So the stated theme of this post is that inequality is no longer growing in America.

What a horrible joke.

We are by far the most diverse developed nation, and thus have the most inequality. Good. Millions of illegal immigrants came here looking for a better life and opportunity. Unsurprisingly they don’t work for Goldman Sachs. They and we are better off.

You’re never going to get egalitarianism it you accept the “huddled masses” yearning to breathe free. This is such an obvious fallacy of composition error it makes me depressed at the level of discourse in America.

You want egalitarianism then deport Hispanic illegals by the millions. For those of us who value freedom, we can accept a nonsense Gini number while we provide 13 million illegal immigrants with a future of opportunity.

You can be like every other developed country and treat your nation like a country club, or you can accept all comers (de facto) and accept inequality.

I can tell you did not read the UN report.

And here's more: 40% of America families cannot afford $400 emergency expense:

https://www.forbes.com/sites/zackfriedman/2018/05/24/money-retirement-student-loans/#bdc982f1059a

Poverty in America, inequality in America has got nothing to do with illegal immigrants.

Let me repeat:

40% of American families cannot afford a $400 emergency.

Got it?

This article assumes there is some static "reality" in America, and there isn't.
To about income inequality without overall income, prices, is the definition of a cherry-picked report. Besides the bias, quotes like "The infant mortality rate, at 5.8 deaths per 1,000 live births, is almost 50 per cent higher than the OECD average of 3.9," which leave a reader wanting to have a serious discussion, short.

This kind of rhetoric is war on poverty rhetoric and it failed. it's indecent and not helpful.

The lack of internet in WV ….does not mention the Rural Wireless Access Act of 2017.

I looked up Rural Wireless Access Act of 2017. It passed the Senate March 2018. Has not yet and may not get through the House. It is a one page bill that orders the FCC to compile statistics about internet access. It may be a good start, but it does nothing to actually extend internet access. Here's the heart of it:

(b) Methodology established.—Not later than 180 days after the date of the enactment of this Act, the Commission shall promulgate regulations to establish a methodology that shall apply to the collection of coverage data by the Commission for the purposes of—

(1) the Universal Service program; or

(2) any other similar program.

(c) Requirements.—The methodology established under subsection (b) shall—

(1) contain standard definitions for different speed tiers, such as the 2G, 3G, 4G, and 4G LTE tiers;

(2) ensure that coverage data is collected in a consistent and robust way;

(3) improve the validity and reliability of coverage data; and

(4) increase the efficiency of coverage data collection.

Passed the Senate March 1, 2018.

In other words, 40% of American families choose not to save $400 for emergencies.

That would be a signal that they don't worry much about having to spend $400 on an emergency. Probably in all, a positive indicator for the health of the economy and the job market.

Or are you attempting to contend that 40% of Americans are unable to save $400 over the course of a year if they chose to? If so, then you're going to have to explain a lot of optional purchase Americans make.

That's right, and I'd add that they're not the same people every year. A long time ago, I was one of those Americans, and now I'm not. Thirty or so years later, my son was one of those Americans, and now he's not. And so it goes.

We have credit cards, insurance and social insurance which are substitutes for savings. So many people don't bother to carry insurance.

Stupid error fixed:
We have credit cards, insurance and social insurance which are substitutes for savings. So many people don't bother to have savings.

Here's what the UN report says about your argument:

"Defenders of the status quo point to the United States as the land of opportunity and the place where the American dream can come true because the poorest can aspire to the ranks of the richest. But today’s reality is very different. The United States now has one of the lowest rates of intergenerational social mobility of any of the rich countries. 11 Zip codes, which are usually reliable proxies for race and wealth, are tragically reliable predictors of a child’s future employment and income prospects. High child and youth poverty rates perpetuate the intergenerational transmission of poverty very effectively, and
ensure that the American dream is rapidly becoming the American illusion. The equality of opportunity, which is so prized in theory, is in practice a myth, especially for minorities and women, but also for many middle-class White workers"

You all should go read Hillbilly Elegy before you just close your eyes and minds to information you do not like.

its not that I don't want digest the information. Its the fact that the first sentence is written like a 19 year old girl. And not Mary Shelley. One working at McDonalds. Regarding intergenerational social mobility, is that because the one-generation social mobility is the highest in the US? Because is the operational word in my question. This is not the hillbilly elegy.

Well, using Trump's logic, RAM is stealing from the piggy bank of the poor by giving them stuff without demanding more back in exchange.


lxm - June 9, 2018 at 5:39 pm 13

Report was done by United Nations. It says we are more unequal than any other developed nation among other things. Good reading.

If everyone in France buys Paul Bocuse's book, he is comfortably wealthy. He can buy a castle, maintain a wife and two girlfriends, and keep a nice boat. If everyone in America buys Anthony Bourdain's book, he is wealthy beyond the reckoning of most human beings.

If every hip hop fan in America buys Kanye's next album, he will be sending his children to Harvard. If every hip hop fan in Belgium buys a copy of 't Hof van Commerce's latest album, they can almost afford a taxi to the airport.

Of course America is going to have a lot more inequality than Belgium.

Sudan does not have anything like RAM. Because they are so poor and yet so equal.

Does this mean Sudan is morally superior?

I believe inequality is good for the minority of a democracies constituents. Thusly, the wisdom in noting prices fall as inequality rises is a commodity-type wisdom. It is not smart. Assets are commodities. Blog posts are commodities and so Alex tried to curate the marketplace with vigor but alex has failed much to his own discredit.. Its an issue of credit. Commodoty strife is not new to the Americas as brazil is a frequent realizer.

That makes sense; inequality can only increase so much. The fact that the world’s two leading economies (US and China) have very similar Ginis despite very different systems suggests that the current level of inequality may be close to an appropriate balance between giving people motivation to strive without too much entrenchment.

I guess this is caused by workers no longer stealing from the Social Security piggy bank!

Using the definition of Trump on workers in other nations saving money earned and loaning it to the US government to finance US job killing tax cuts....

After all, if China, Saudis, et al did not by US bonds, we would be forced to work harder to make stuff cheaper they would buy so we were stealing from their piggy bank.

There are currently more open jobs than unemployed workers, and income for low-income workers has been climbing during the Trump years.

And yes, the United States is a desirable investment. Oh, the horror.

Strain looks only at "market income," which does not include unrealized capital gains.

Try again.

While I feel sympathy for the poor saps who don't have $400, my economic concern with very high levels of inequality is that it correlates with financial and economic instability. Look at a historical graph of inequality and the correlation is obvious. I use the term correlation rather than causation to avoid a semantic dispute with those who have poor eye sight. There are many explanations for the correlation, but I believe the best is search for yield: at high levels of inequality, the rate of return falls, inducing owners of capital to take greater risk to achieve a higher rate of return. One might call it what it is, speculation in asset prices, but ideologues among us will respond that there is no such thing as speculation. I suppose there's no such thing as pornography either.

How can you write about inequality from 2007-2014 and not mention the Affordable Care Act, which is a giant wealth transfer from wealthy to poor? Answer: when you are being intellectually dishonest.

The inverse correlation between inflation and wages shows up again.
Using appropriate inflation measures when measuring wage growth would end the fake news coming from using the CPI and not measuring quality properly. Almost everything I do now is used by products are under-valued, especially by economically dependent politicians and economists. See http://www.textbooksfree.org/Economics_9_The_Business_Cycle.htm#Are_Wages_Stagnant_Real_Median_Compensation_Should_Be_Used__

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