Inequality could be lower than people think
economist.com
economist.com
>If you argue that income has shrunk you also have to claim that four decades’ worth of innovation in goods and services, from mobile phones and video streaming to cholesterol-lowering statins, have not improved middle-earners’ lives.
I don’t see how the availability of better per dollar technology is an argument that income hasn’t shrunk. Technology, for the consumer class, comes out of disposable income. Businesses (and their wealthy owners) are the biggest financial winners of tech. By a landslide.
What about the lack of(available) durable goods. I live around things that are older than me, but things made in the last ~30 years haven’t withstood the test of time so well. That seems like a huge cost I’ve never seen accounted for.
I don’t see them addressing the rising cost relative to inflation (as best I can tell) on necessities like food and shelter.
Maybe I’m just dumb and full of myself, but this reads like propaganda. The argument about pensions is decent but I think most people who care about economics were already aware of that, and even that is kinda sketch because the pensions are often managed by ultra-wealthy hedge fund managers who line their pockets.
Similarly, by treating health care as a single good and ignoring all the new treatments that get introduced we see the cost of healthcare is dramatically up. But the cost of getting a treatment that didn't exist in the time period was infinity. Regardless, patient outcomes are better too on a per condition basis so the treatment quality has gone up too.
I'm not sure many people would take the option to pay a 1970 price for a 1970 standard of health care if they could have that choice now. But the inflation indices treat 1970 healthcare and 2019 healthcare as almost interchangeable.
For education, my 2nd year undergrad course used a textbook that was a grad school book at MIT in the 1960's so the material being taught has advanced too. Again, interchangeable good in the index.
If inflation is wrong, then most measures of inequality are also wrong because inflation adjusted incomes are wrong.
Your anecdote about education being better goes absolutely against what I’ve seen first hand. My parents, who went to College ~40 years ago, paid a fraction of what people do today even accounting for inflation, and the quality was far higher. Smaller class sizes and higher standards than today’s student loan fueled universities, meant that getting a degree was a big deal, unlike today.
https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most...
> However, the magnitude of the bankruptcy effect is much smaller than previously thought: we estimate that hospitalizations cause only 4% of personal bankruptcies among nonelderly U.S. adults, which is an order of magnitude smaller than the previous estimates described above.
WaPo’s fact checker gave that statistic three pinnochios: https://www.washingtonpost.com/politics/2019/08/28/sanderss-...
Healthcare costs have been rising faster than inflation since the 1970s. Health care consumed 4 percent of income in 1960 compared to 6 percent in 2013.
https://www.thebalance.com/causes-of-rising-healthcare-costs...
And are expected to continue doing so into the near term.
https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
People with more money than they can sanely spend who nonetheless feel slightly as if they're behind the curve
People who are struggling to make ends meet every day and who are one or two pay checks (or dole payments) from significant hardship.
There hardly seems to be a middle any more. Nothing is more difficult than to be of modest financial ambition. I don't know how well graphs can plot this kind of imbalance.
My oldest son is in college. I really do not see the problem with college expenses, so long as the student abides by a few guidelines:
- In the high school years, the student should recognize that their primary job is to line up scholarships. Nothing beats a good ACT score, and very good study books can be had at GoodWill for $1.
- Once at college, eat at the caf. Every. Single. Meal. College kids have no business eating out.
- Have a summer job, the primary goal is to make money.
- Don't use Spotify, NetFlix, etc. No subscription services.
We fund half of what my son's scholarships don't pay, he pays the rest with summer-job money. It's working so well I expect the other 2 kids to graduate debt-free as well.
https://www.npr.org/sections/health-shots/2017/03/23/5210833...
https://avc.com/2016/08/elephant-chart/
(note that the green line marks the mean gain, at about 25%, not zero)
So the typical 1st-world person sees people on both sides of them gaining by leaps and bounds, while their own situation is stagnant. That is bound to cause some bitterness. The people below are now providing competition that pushes down the cost of labor, both via outsourcing and immigration.
Serfs probably had a higher standard of living than cavemen, but that doesn't mean that the system of nobility and kings ruling over them was objectively correct, and should be maintained as the one true way to run a society.
The fact that billions have been lifted out of poverty in the last few decades is an important note and definitely deserves merit.
It also invalidates a 'specific point' about how the top 0.1% are only earning about half of the increase people thought they were between the 70's and 2012, because clearly the graph shows the top 10% is earning MORE than expected, so they ignored the other 9.9% which seems pretty important. In case you desperately wanted a specific point.