America's upper middle class is growing
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We are, as scary as it seems, heading towards a two-tier society. One where the upper middle class and rich are doing extremely well, and an underclass that is living paycheck to paycheck.
From this perspective, the rise of extreme candidates like Trump is almost understandable. The shrinking middle class, and the rising lower-middle-class, are finding themselves under assault, and are reaching out for anyone who is will to fight for them, against any scapegoat that can be blamed for this assault. Mexicans, Muslims, China, Free Trade - all perfect targets.
Their complaints are real, but it's unfortunate that their anger is being directed towards fictitious threats. Let's face the truth and start addressing the underlying problem. We need to tax those who're benefiting tremendously from the current economy, and use this money to strengthen the middle class and help those who are falling behind. Raising the tax rates on the top 30%, and introducing a universal basic income, is a much needed first step.
[1]: http://www.nytimes.com/2011/03/07/opinion/07krugman.html?_r=...
You mean hated by 70% of the electorate?
http://edition.cnn.com/2016/06/15/politics/washington-post-a...
I don't think this is true at all. The closest thing I can thing of to this that would be true is "The more popular they are, the more dangerous it is for you to call them extreme. Especially if you are right."
There's is generally little danger in thinking of a moderate politician with moderate followers as extreme, or even of overtly calling them that, no matter how popular they are.
OTOH, there's plenty of danger in calling an extreme politician with a demonstrated history of encouraging violent reprisals against dissenters extreme, especially if they are popular (and, especially if the people with whom they are popular are also extreme.)
Would you accept "extremely widely unpopular, reaching a historically unprecedented low" instead of "hated"?
Trump is the single most unpopular major party nominee for President in the history of opinion polling, and was able to win largely because of the structure of the Republican nomination process being designed (and refined over several cycles) to lock-in the early advantage of a candidate able to most effectively appeal to particular extreme activist constituencies early in the process by creating large delegate majorities from small electoral pluralities, a design which has particularly extreme effects when the field of candidates early in the process is crowded as it was this year.
- much less of a war-monger than Hillary, - has been gay-friendly forever, before it became politically expedient (see his press interviews from 2000). - he actually employed a lot of women in high-up positions
I am far from a Trump enthusiast, but calling him extreme is not entirely accurate.
Yeah, about that... if you ever get the chance, you should look into how he treated those women.
Go to Youtube, listen to a rally speech. It's pretty content free, even in the context of a presidential candidate rally.
Birth control must be a right or we will outbreed our planet's resources.
Chemical contraception should be provided free of charge to anybody that wants it. The cost will be a pittance compared to the lifetime societal costs of unwanted children mostly born into and stuck in poverty, and doomed to repeat the cycle with their own unwanted pregnancies.
I would argue Education / stable society reduces rate of birth more than birth control.
What do most all 1st world modern economic countries on this list have in common? https://www.cia.gov/library/publications/the-world-factbook/... The birthrate per woman is under 2.
Unfortunately, accidents happen. We should promote both.
EDIT: I think china did control population control, and if population control is a world shattering issue maybe we should look at it.
If we must go back to the first half of the 20th century for examples, government efforts to select parental fitness look pretty ugly too-- happy to expand a bit on the "natalism" of the 3rd Reich!
However, birth control should be provided for free because the cost of pills is far lower than the cost of a human being.
That being said, I think it would be worth looking into a "parental preparedness"...erm...I really hate the term "license" for this but it'll have to do. Anyway, something to demonstrate that you will be a good parent would be useful in determining eligibility for things like WIC benefits. But that's just an idea and should be attempted before implementing.
I feel like birth control in a variety of forms is already fairly readily available, and it seems likely to me that it will only get more accessible in future.
Actually that is, in my opinion, a perverted world view. Surely you don't believe it.
I feel this is a correct, one way relation, as being born in the right country is luck in itself.
I can't accept someone truly believes that. You are polarizing this discussion. While it is known that people born with an advantage have a higher chance of succeeding in life, those people have to do their part in order to succeed. That means seizing opportunities offered to them, studying hard, working hard. They might have had an easier time having access to things, but that doesn't mean they could just slack off and yet succeed.
Yeah, seems incredible to me as well. But reading some of the rhetoric flowing around here over the past couple of years, it seems to be an amazingly popular point of view.
The only luck or exploitation he had was having the bombs dropped on Hiroshima and Nagasaki so he didn't have to die on a Japanese beach (his medical records at that time listed him as suffering from typhoid and dysentery - but because the war effort was stretched so thin, he was also listed as "combat ready". He would have died)
Tell me with a straight face that the next big startup is going to come from Somalia or hell, even Flint, Michigan.
Note too that "success" doesn't necessarily have to mean "building a startup and having a big exit." There are many levels of success.
In my view, there are two different things we have to balance with something like UBI:
1. Provide for those who have "fallen behind" via wealth redistribution.
2. Reward those who are doing exceptional work.
We as a society are generally are good at the second point: skilled worker are generally above median income and thus at or above middle class. We also have ways, albeit not perfect, to deal with the first point: via welfare and other programs.
The problem is the future. I believe that we will continue to try to automate people's jobs, because it is lucrative to do so: if you automate 10 persons' jobs away, you can sell that automation for 8 persons salary, which creates savings for your clients. However, as we automate away more jobs, how do we ensure that people can still live? We can't just leave a large portion of the population to die on the streets. We must come up with a compromise solution that ensure that both people are taken care of and people are rewarded with their good work.
I personally don't know how to balance this without higher taxes on the rich and well off, to the point that I have accepted that this is probably the way of the future. I feel that if we do not apply wealth redistribution, society may become unstable and I would end up worse than paying extra taxes each year.
Lastly, as a sibling comment addressed: those that do well have good luck, which is built on society's shoulders, so I find it natural to give back. I understand that others might not think this way, tho.
(In the following argument, I am assuming free energy via solar / water / wind combination, which is perfectly doable today, but isn't fully implemented for logistic and political reasons. Yet.)
If you have everything fully automated to the point that it doesn't cost you or anyone else to produce it, what would be the point of attempting to sell it? And why would anyone buy anything, if everything is automatically produced for free?
Living thus in a society with a socio-economically paralyzed, beaten-down underclass will have negative outcomes for me. Parts of town fall into disrepair, limiting my movements and driving down my property value. More bums pester me on the street. Class-warfare politics threaten my interests. Etc. Crass but there you go.
In the grand scheme, I'm incentivized to avoid this scenario, and if raising taxes on myself can do it, then maybe I'd consider it, arguably without acting at all in contradiction to my purely selfish, purely rational nature.
There are plenty of arguments to be made about progressive taxation, but this idea that it punishes the rich is tiresome. Reducing the size of someone's reward is not punishment.
That's not what the linked data seems to show. The report indicates that the share of the population in the "rich" and "upper middle class" buckets increased while the share in the "middle class", "lower middle class", and "poor and near poor" shrunk, with the LMC shrinking by the highest percentage.
In the type of two tier scenario you describe we would expect either the P/NP or LMC or both to grow rather than shrink.
Real wages for the average worker has been flat/down, over the past decades. However, real wages for the rich has grown tremendously during this same time period.
It's heartening that the average worker's wages haven't fallen significantly. But one would hope that given the amount of economic growth we've achieved in the past decades, the middle/lower-middle classes would also get some of the benefits, instead of simply running in place.
It's very prescient and very very good. Highly recommend.
While I agree in part with the sentiment, I think this needs to be done carefully so as not to end up in a situation where everyone is at a disadvantage.
Take for example that a higher earner is able to afford a high deductible for his yearly health expenses. If you start taxing that person heavily to the point where they can't afford that deductible anymore, all you did was to increase the bucket of people who can't afford proper healthcare.
It's not just about taxing the richer, it's about adjusting the system as a whole.
Another example, this one personal: my wife and I earn a high combined income. Because of that, we're able to afford a more expensive apartment in our city's Downtown (not luxurious by any standard, just a little above the average in our area). That frees us from having to use a car most of the time (we have one that we use sparingly and incurs minimal yearly costs), which 1) drives down car costs 2) is friendly to the environment 3) makes us happier thanks to not having a long commute and 4) somewhat (although minimally) helps local government revenue because we're paying for bus fares. If we were taxed to a point where we couldn't afford our rent anymore and were forced to move to the suburbs, we'd see a dramatic increase in car costs (more gas, more frequent maintenance), we'd be joining the ridiculous lines in traffic during our commute, which would likely lead to more stress and more health issues, and we wouldn't be part of the group of people providing revenue to the local transit authority. So it's not like high earners can be indiscriminately taxed and that would only help other people but not impact those being taxed.
This discussion also comes down to the question, "who is a high earner?" I don't think people earning $100K+ (or couples earning $200K+) should be the target here, but executives earning millions upon millions every year, as well as the corporations they run.
Many are losing their position in society as a result, resulting in varying degrees of dissonance and varying degrees of reactionary behaviors.
I find it difficult to blame any one group of people for their actions when they are losing at a game they never opted into and were never told the rules of. I also observe a lot of bigotry and lack of empathy coming from those who have a better grasp on this "game." It's toxic.
How do we re-adjust how we think about ourselves? What obvious truth are we missing regarding what humanity should be?
Highly educated / experts in their field of interest, in a society where money is no longer relevant, since all the logistics are fully automated?
Wait. That sounds familiar, from somewhere... Wait...
UNITED FEDERATION OF PLANETS
I truly hope humanity reaches that state someday, and it would be so good if it did so while I'm still alive.
The definition of scapegoat implies that the reasoning or blame isn't valid.
If you're an out of work construction or retail worker, replaced because a foreigner not paying taxes and using currency arbitrage can out-compete you, then the foreign worker is not a scapegoat.
If your city's main factory was moved to a low cost country while enjoying tarif-free imports, then free trade agreements are not scapegoats. They ARE the reason you are unemployed.
If you just finished up training a foreign guest worker to do your job, and are now unemployed, the H1B system IS to blame.
Forget about the morals or fairness of it all - it's not the point I'm arguing. And it's likely Trump would be unable or unwilling to enact his promises if elected.
But trying to frame legitimate reasons for the economic problems of 80% of the population as some sort of 'boogyman' sold to the rubes is disingenuous and just flat out incorrect.
If a small handful of people can create and sell a product that is profitable and scales well enough, they will be rewarded.
However, the employees brought on after the company is profitable and/or has a high valuation (>$100m) are simply seen as costs. They have to be on-boarded and given the relatively low wage ceiling compared to the early employees, they have ample reason to quit and move after a year or two, so they become a turnover headache as well. Not to mention, the newbies are often the first to go if a layoff is necessary.
So, in short, don't let yourself become expendable.
Everyone is expendable.
Except they haven't. [0] But family sizes have gone down, and since the methodology here defines "class" membership by a combination of income and family size, shrinking family size looks like upward class mobility.
OTOH, sort of like the illusion of prosperity that was for a while maintained by borrowing against inflated real-property valuations, this is another illusion with a fairly hard limit.
[0] http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor...
Wealthy people increased by 1.7% op the total population.
Non-wealthy middle class shrunk by 6.6% of the population.
Poor people also shrunk, presumably by the remaining 11.6%.
So it sounds like everyone is doing well. Why is everyone angry and bitter then in these comments? This sounds like great news to me. Don't we want there to be more wealthy people and fewer poor people?
This WSJ article (paywall) has a fuller write-up and links some other related research: http://blogs.wsj.com/economics/2016/06/21/not-just-the-1-the...
Marginal Revolution has a write up with an interesting graph that is credited to the WSJ but I didn't see there: http://marginalrevolution.com/marginalrevolution/2016/06/the...
In case you don't want to click through the definition of upper middle class used is $100,000 - $350,000 for a family of three in today's dollars (adjusted for inflation and family size as appropriate).
Until everyone knows how to leverage their output with programming expect the gap between the upper middle class and everyone below to grow.
If you're currently in the upper middle class and above and you are not leveraging software either directly in your role or as an manager / owner, then you're at risk of falling in class.
When the industrial revolution started, factory workers were paid very well, relative to other workers (i.e agriculture). Once society realized that math / english was a core skill required to live in the new world, factory workers as a group grew and became the middle class. I expect the same thing to happen with programmers if we as a society get our shit together and educate our population correctly.
Personally I think the speed of technological progress is just too much for a multigenerational society to adapt with.
The speed of progress is definitely a concern but we're not even trying to keep up to speed as a society. We're still in denial.
But at the end of the day there is infinite possible "work" for people to do. All we need is a bit of imagination to see all the crazy things we could do. And by "work" I mean things to do. The traditional definition of work will have to change. There will be more self determination. Possibly UBI emerge as a new institution arising to help transition society.
An obvious example is how much system administration has been automated or replaced with scalable services. People used to get paid a lot just to handcode HTML, now you have WordPress and many other frameworks.
But there is still enough demand out there for programming skills that the market has largely been able to absorb the new comers, which is how it should work. Innovation should free up people to do other things, but it's difficult to arrive at those other things during sluggish growth periods.
I think the main problem is not the speed of technological progress, or automation, but that the response to the global recession ranged from inadequate to contrary to what economics teaches us. Because of how politicized economic topics have become, it's difficult to avoid the current state.
Automating programing tasks results in programmers being more efficient letting them accomplish the same tasks in less time. This makes it less expensive to accomplish any given programming task which increases the demand for programming tasks which increases the demand for programmers. This causes the price of a programmer to increase even though it causes the price of accomplishing a programming task to decrease.
> ... the upper middle class ... controlled 52.1 percent of total income in 2014, up from 29.6 percent in 1979. But had their income growth kept pace with their population expansion, they'd only control 48 percent.
So their income grew from a population-adjusted 48% to 52.1%? That's relatively minor, I wouldn't even call it thriving.
Also, don't the majority of actually rich people earn wealth via means other than income?
EDIT: The HN title is "America's upper middle class is growing", the link has the title "America's upper middle class is thriving". I'd agree that it's growing, but thriving is a hard sell given what's highlighted in the article
That's a huge disparity of incomes and, based on the locale, it means an even larger gap in discretionary income. In fact looking at the numbers without looking at the discretionary income makes no sense whatsoever, as that is the main factor of economic mobility in the first place.
I can never take this type of article seriously. $100,000 represent a different buying power in NYC, in Dencer or in Cleveland. Or can you use a salary range like that completely independent of location?
In the full report (http://www.urban.org/research/publication/growing-size-and-i...) we can see that in Figure 1, all ranks of income have increased their income since 1979 except those < 5%. At the median we have ~ 30% gain in income.
This result is a product of the choice of an inflation measure called the "personal consumption expenditure". Here http://www.advisorperspectives.com/dshort/charts/census/hous... you can see the difference between median income as adjusted by PCE or by the more traditional CPI.
With the former, we see a median income gain of almost 36%, and with the latter a gain of only 7.5%. CPI adjustments also show that since 2000, median income has actually fallen by 9% (see here http://www.advisorperspectives.com/commentaries/images/house...).
In other words, this result means nothing unless we believe that PCE is a better measure of inflation than the CPI. What's the difference? As far as I can tell (I've never studied this before), CPI measures only out-of-pocket expenditures by households, whereas PCE measures services targeted towards individuals as well.
Especially (from WP): "CPI measures only the out-of-pocket healthcare costs of households where PCE includes healthcare purchased on behalf of households by third parties, including employer-provided health insurance. In the United States, employer health insurance is a large component and accounts for much of the difference in weights."
In other words, what's being measured here is not that America's "upper middle class is growing", what is ACTUALLY being measured here is the rampant growth in health care costs, which means that more and more of American's income is being lost to employer-provided healthcare.
This would be fine if we believed that health care outcomes were actually improving at the rate that health care costs have been increasing (well ABOVE the rate of inflation), but this is not, in fact, a reasonable assumption.
This is just saying, because you pay your doctor twice as much now as you did in 1979, you are better off, and are now 'upper middle class'.
http://www.advisorperspectives.com/dshort/charts/census/hous...
Yes, the upper middle class hasn't been hit as hard as the middle and the lower classes (particularly in social ills like illegitimacy, which has gone critical among lower and middle class whites, in particular) but it's idiotic to say that the upper middle is thriving.
College costs, medical costs and housing costs are all skyrocketing, the children of the upper middle class are entering an economically uncertain world where what were previously solid paths to financial security are suddenly precarious and intensely competitive.
And, believe it or not, some of us upper middle class folks actually care if the rest of America is doing well, and don't feel like we are thriving when we are watching reasonable, hard working middle and lower class folks sink into poverty due to our feckless leaders.
Here's a summary of what we do want, written by the founder of this community:
Comment[s] should be written in the spirit of colleagues cooperating in good faith to figure out the truth about something, not politicians trying to ridicule and misrepresent the other side.
https://news.ycombinator.com/item?id=7445761
I've always found that to be an excellent way of putting it, and it's on the short list for additions to the HN guidelines.
The top 5% now has just about as high an income as they’ve ever had (incomes almost doubled since 1980!), despite some rocky times for the country. By contrast, the bottom 3 quintiles are all right where they were in 1988, and ~{0%, 5%, 15%} above 1980 levels, respectively.
Using the peak of the 2000 bubble as your baseline causes some dramatic distortion. If you used a 5 year moving average to smooth out some of the natural cycles, you’d get a better idea.
And note: this chart is showing income, not wealth, which is where disparities have really started to pile up.
[1] https://en.wikipedia.org/wiki/National_debt_of_the_United_St...
Also, this article has an auto-playing video that is loud as hell and FOLLOWS YOU AROUND THE PAGE.
^1 http://www.bankrate.com/financing/wealth/what-does-1-percent...
^2 http://www.marketwatch.com/story/45-of-americans-pay-no-fede...
No, they don't. The top 5% have a little over 20% of all income [0].
[0] https://www2.census.gov/programs-surveys/cps/tables/time-ser...