Income Inequality in America

Fact:
80% of all new income generated in this country from 1980 - 2005 went to the top 1%.
http://www.slate.com/articles/news_...quality/introducing_the_great_divergence.html

Fact:
The top 1% of America own 42% of America's financial wealth while the bottom 80% owns 4.7% of our financial wealth. The top 1% own 35% of America's net worth while the bottom 80% own 11% of America's net worth.
http://www2.ucsc.edu/whorulesamerica/power/wealth.html

Fact:
In 1982 the top 1% earned 12.8% of our national income. Today they earn 17,2% of our income. In 1982 the bottom 80% earned 48.1% of our nation's income. Today they earn 40.9% of our nation's income.
http://www2.ucsc.edu/whorulesamerica/power/wealth.html

Fact: The incomes of the top 1% have risen by 281% from 1979 - 2007. The incomes of the middle fifth of Americans has risen by 25% in that time range. It grew by just 16% for the bottom fifth. Most of the growth for the poor and middle class happened in the 1990's.
http://www.theatlantic.com/business/archive/2011/10/income-inequality-is-not-a-myth/247389/

Fact: Wealth inequality is strongly correlated with how much we tax the rich. Since tax rates for the very richest was slashed in the 1980's, wealth inequality has started rising steadily.
http://c1ecolocalizercom.wpengine.netdna-cdn.com/files/2010/04/wealthgapchart1.jpg

Fact: Growth in income inequality is strongly correlated with sluggish median income growth.
http://www.the-crises.com/wp-content/uploads/2010/12/income-inequality-usa-18.jpg


Fact: Economic mobility is smaller in America than it is in Europe which has less income inequality. Countries with higher inequality have lower income mobility.
http://www.businessinsider.com/inequality-and-mobility-in-the-united-states-2013-7

Fact: As income inequality rises in America, economic mobility falls.
http://www.investopedia.com/financial-edge/1212/americas-decreasing-economic-mobility.aspx

Fact: Only 15% of the bottom 80% will make it into the top 20%.
http://www.cfr.org/united-states/income-inequality-debate/p29052

Conclusion: Income inequality is a problem that needs to be dealt with. What is the solution?

 

The biggest issue in many nations where this is less of an issue education in a career and university studies all the way up the food chain is either very affordable, free or in the case of the Netherlands its free and they pay you a stipend when your in a university if needed that makes getting good careers going pretty simple. Add in progressive government policies to that it tends to even things out more.

In short going to a university is the US is for a good number of students an expensive gamble if the Netherlands it isn't and in France costs are modest if I have my costs right 3000 Euros a year, that makes medical school or graduate studies in a key field like chemistry pretty affordable.

 

"Income inequality is a problem that needs to be dealt with."

Taxcutter says:
Not by government.




"What is the solution?"

Taxcutter says:
1. Eliminate all the regulations promulgated since 1975.
2. Convert the US federal (and hopefully the states follow suit) civil courts to the "loser pays" system the rest of the world uses.
3. Reduce federal government spending to less than 15% of GDP.

 

End Reaganomics.

Restore steeply progressive income taxes at all levels of government.

Problem solved!

Any more softballs?

 

How are these things supposed to reduce inequality between rich and poor?

These may be good solutions for ensuring better economic growth but how do we ensure that a little more than 20% of our economic growth actually gets to the bottom 99%. And by the way, who is going to get the majority of the tax cuts?

 

Get off your ass and go pursue your dreams instead of seeking "job security" within someone else's. This is why "economic mobility" is so stagnant. Because the people today are comfort junkies who fear and avoid risk-taking. I've got some news for you. Fortune favors the bold. If you seek comfort, you should expect mediocrity. Those people with all that money are doing things you're not doing. They are putting themselves out there everyday in ways that you are not. Now you can sit around and play the moral superiority card and lie to yourself about how you could do all that stuff if you really wanted to but you're not "greedy." Or you can admit that you're just being soft and you need to challenge yourself more, and you can go out and blaze your own path. The choice is yours.

Upward mobility doesn't come to people who sit around waiting for it to fall into their lap. It comes to those who reach out and take it. Which one are you? The quality if your life will answer that question better than any words you are about to type here. Because actions speak louder than words.

^This is how people think who will always be on the bottom. Because their whole world view is built on envy. As you can see, their policies are based on tearing other people down rather than lifting themselves up. Because they see life as a zero-sum game. If given the choice, they would rather see everybody fail than see anybody succeed above anybody else. If they can't have any pie, then they don't want anyone else to have any either. These people are called player haters.

 

Taxcutter is obveously wrong on #1 & #3, and #2 would only work for copporations. If anyone wants an example on how to make it worse, follow these steps, if you want to fix it, do the opposite of anything examplified by a "taxcutter".

 

You think that lower upward mobility is because of laziness? Then why is our upward mobility lower than Europe's but we work more than they do? Today, we even work more than the Japanese. If we didn't have the unemployment problems we do today, we would work even more?
http://abcnews.go.com/US/story?id=93364&page=1

The problem is income inequality. This is why we see such a strong correlation between low income inequality and high income mobility. When there is less of a gap between rich and everyone else, it is easier for the average guy to compete against the rich to find himself at the top.

Well, ever since the Reagan tax cuts for the rich, income inequality has soured, more income growth has gone to the rich, median incomes have stagnated, and economic mobility has declined.

 

"Bla bla bla, look at me, i'm ego trippin' again! I'm a big bad son of a woohoo, I can do anything because I'm somebody!"

Go ahead, go back to the "Law of the Jungle", see how that works out for you and get back to me in a few years! Tell all the poor people how to fix their lives when you have lost every fiber of humanity in your soul for your twisted philosphy of how great it is to be on top. By all means, show the world what a wonderful and caring human being you have turned into, and I'm sure that will warm a lot of people's hearts!

 

Basically, you think teachers should become corporate shills.

 

Progressive Taxation similar to the Eisenhower Tax Code.
Forced divestiture of anyone or any entity too big to fail or too big to prosecute.
Limit total inheritances. Let the descendents of Bill and Melinda Gates be multi millionaires, just not mega millionaires.

Hard Time for Economic Crimes. Fines to exceed ill gotten gains.
The five banks responsible for the economic collapse were fined 3 days profits. No one went to jail.
The convicted Ken Lay died at home in his own bed and I never saw my Enron refund for electricity overcharging in California.
Mandatory "jail" time. NOT house arrest. 1 million stolen = 1 year mandatory.
In the event of corporate crime, the managers and top CEO does the time.

How is that for some solutions.
Economic crimes are still rewarded. Even after conviction or "settlement". Courtesy Obama / Holder.
And a bipartisan effort to break the working poor for the further wealth of the 1% who put them in office.
2016 Vote for the Third Party of your choice.

Moi

 

"Blah blah blah.... if we only had the right system, everything would be perfect. Blah blah blah...."

Poverty is only "man-made" in the sense that it is in human nature for some to have a weaker survival drive than others. The poor have always been with us, and they will always be with us. You can cry about it, or you can make smart choices that will minimize your chances of being among them.

Mandela is wrong if he believes poverty can ever be completely eliminated. That is pure feelings-based idealism. Predictably, that mantra will appeal to emotionally driven people. But it will fall on deaf ears to pragmatists. Would it be safe to put you in the former category?

I've never even heard of this guy, but it's clear from this quote that he is quite adept at speaking out of his ass since he has quite clearly displayed that he has no understanding of what a Republican actually is. He only understands a distorted liberal interpretation of Republicanism. Which is about as accurate as asking Hitler for an objective assessment of the Jews.

Not laziness. Fear of risk-taking. Comfort-seeking. There's a difference. If you cling to comfort, you will take the "safe" path instead of the most rewarding path. And you will ultimately get what you put in. If you aim for mediocrity, you will reap mediocrity.

Also worth noting about Europe's mobility; what is the ceiling there? Perhaps they can move more easily within a limited spectrum, but how high can they actually move? I brought this up in another thread just yesterday. America has more millionaires than any other country on the planet. So you are actually more likely to be rich in America than you are in any country in Europe.

See what the problem is? You want somebody to make the game easier for you instead of just working to get better at it. What you don't realize is that those people that are better off than you didn't think like you do. They didn't complain about the "unfairness" of the hurdles in front of them. They simply learned how to clear them. And that's why they are where they are. All you have to do to get to where they are is do what they did. But most people simply won't do that. Because they would rather make excuses than progress.

 

No, I think people that complain about not having enough money should stop trying to work for other people.

 

There are traders who lose everything in the stock market every day. There are also people living comfortably in countries that follow other models.

 

Gee, just because that reduced income inequality for 50 years, and income inequality has grown ever since, that's only 80 years of data, that correlates 100% to your hypothesis, don't you think we should wait "until the science is settled"?
I mean what if the last 80 years was the exception to the rule?

 

It is what happens when our federal Congress cannot justify wartime tax rates but can apparently, prosecute wars on a for profit basis that benefit those with the most wealth to make more wealth, under our form of Capitalism.

 

The means whereby people are encouraged is wealth; the means whereby a country is made prosperous are agriculture, manufactures, and administration. Now those who seek wealth, never do so by these means, but by artful manipulation of money and the market. This is called “wearying the people”. The country of those who weary their people will certainly have no strength, and the country of those who have no strength will certainly be dismembered.

 

Not everyone can go into business. Its pretty hard to compete against large corporations. The more people who get into business, the more that will fail in business. Just the way competition works. As it is, 95% of new startups fail.
http://startupdispatch.com/startups/reminder-95-percent-of-new-businesses-fail/

Not sure about the ceiling. However when comparing US the Canada, the higher the income level the greater the advantage in economic mobility Canada has over the US. The richest group in the study was the top 10%.
http://www.businessinsider.com/inequality-and-mobility-in-the-united-states-2013-7

Well actually 42% of them were born into rich families already. I have nothing against people being richer than me. I only have a problem with 80% of economic growth going to the top 1% leading to the stagnation of our median income.

 

Maybe it was the exception but what evidence is there for that idea. Europe has more progressive taxes and they have more income equality. So maybe there is a point to raising taxes on the rich.

 

The right-wingers only believe what the one percent wants them to believe.

 

No, the means by which people get wealthy are called "produce something (*)(*)(*)(*)ing useful and people will buy it." It's really not that hard. You guys try to make this way more difficult than it is. The problem is that you people contribute nothing to the world you live in and then can't figure out why nobody wants to give you the amount of money you desire. Your attitude is all wrong. You're stuck in the "getting" mentality instead of the "giving." Invert your polarity and see if you don't become prosperous.

Stop worrying about what other people are doing and start focusing on what you are actually doing. It'll benefit you tremendously.

Said everyone that never tried anything. Do you know why 95% of new businesses fail? Because their founders give up. They either don't learn from their mistakes, or they just quit. Look at the tone of your post. You're still too afraid to challenge yourself. You're afraid of the big dogs. You can't be like that if you want to get anywhere in life. You're still clinging to the safe route.

Which still doesn't really mean anything because America still has more rich people. So that non-American social mobility still appears to have a cap on it somewhere that does not exist in America.

I'm not even going to bother researching that percentage. But let's just say for argument's sake that it's accurate. That still leaves 58% that were not born into their wealth. Which means by your own figures, over half of those people still built their own success. So of course they're the ones getting the economic growth. They're the ones contributing to society.

Thus if you want to blame someone for that median stagnation, you need to blame the right people. Blame the mediocre with no higher aspirations than the illusion of job security (which is a complete illusion, by the way). They are simply reaping what they have sown by choosing comfort over challenge.

 

I see that you are living in the 1800's. Though even then your statement would be more accurate if you said "have someone else, like Indians, Blacks, Irish, Chinese, produce something..." No individual gets rich by making something. A country as a whole, yes.

 

Not that your 80% figure is true, but why do you say the 1% took that money? Did they generate it? If not them, then who...you? Did Obama build it again?

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Tell that to zuckerburg. He is a big 1% because he made something an took a risk.

 

Yeah, and most large businesses of today, were the last in a string of failed businesses before. Henry Heinz first tried to sell horse radish, and failed. Then he tried buying up tomatoes or something, and that failed. Then he started selling ketchup, and made his fortune.

Colonel Sanders had a failed restaurant before he started KFC. I could list hundreds more.

Phil Robertson was laughed at, and escorted out of stores, while he was trying to sell his duck callers. After strings of stores turning him down, he finally started landing some sales, and of course now he has his own TV show Duck Dynasty.

Not really all that informative. One of the biggest problems I have with charts like this, is that it ignores differences in culture and mindset.

For example, in Sweden, it's considered a negative to be on government assistance. Last I looked, the average recipient of government assistance was only on the rolls for a few months.

In America, we have people that have been collecting food stamps for nearly their entire adult life.

Collecting assistance with the mindset that this is normal, and acceptable, and there is no shame in it, leads people to a stagnate life.

These numbers only reflect the economic reality. Not the mindset of the people involved. A person who has no problem living out their life in the lowest 10% of wage earners, and is not even attempting to improve themselves, is not going to move up the income range, no matter how easy it is to move up.

Another issue with this data, is that it doesn't take into account the limitations on income range. In some countries, you simply can't earn as much as you can in the US.

If the top earners are ranking in $40 Million in the US, and $200,000 in Sweden, and someone's income goes up from $0 to $200,000 in the US, and $100,000 in Sweden... The person in Sweden will supposedly moved up half the income scale. Their income mobility is mathematically higher. But who is doing better? The guy in the US. He's earning double what the Swede is, even though his income mobility is lower.

So articles like this, not all that informative.

Stagnation of the median income, is due to government. People like you on the left, demand more regulations, more taxes on business, and more controls on business. That's all well and fine, except that every single one of those, cuts income.

Business doesn't have magic money trees in the back yard. Every dollar a company dishes out, has to come from one of two locations. Either higher prices on goods and services, or lower wages to employees.

This Obama-care package is a perfect example. The government requires that insurance plans cover more things. In order to do that, they have to increase costs. The company again, doesn't have a magic money tree in the back yard. So companies are not giving out pay raises, or they are hiring employees at a lower pay rate, or they are cutting hours to avoid the health insurance mandate.

Every dollar you demand in regulations, or mandated benefits, or whatever, is one less dollar the company can give out in wages. Then you want to cry about stagnate wages? Stop shooting yourself in the foot.

 

So what? "Taking a risk" is not inherently valuable (we prefer to minimize risk in the growing of food); the idea, generally, is to know whether a venture is profitable in the first place. What is this elevation of risk? Facebook is replaceable by less intrusive mediums. Facebook is most profitable for advertisers as an example of totalitarian inquiry into it's users. Another example of turning an erstwhile service into a tyrannical cashcow.