Via Andrew Sullivan Lane Kentworthy charts US income disparity
Its impressive that the income for the Top 1% races off while the income for the middle and lower class is squished towards the bottom.
I was concerned, however, that this chart might be somewhat misleading because even if the various income classes had the same growth rate – not suggesting they did, just saying – the increases for the Top 1% would dwarf everyone else, since they started from a higher baseline.
I tried plotting the income growth as common logs
A similar though, perhaps, less shocking looking story. There is growth, albeit mild in the middle and lower classes, and stronger more robust growth among the Top 1%.
If your used to common logs then you can see that the Top 1% moved from being about an order of magnitude above the middle class to about one and half orders. Or in other words from 10 times greater to 30 times greater.
However, you still don’t get a good sense of the trajectory. For that I plotted an index scale where 100 is income in 1979.
Here we can see that the Top 1% has more than triple its income with fairly steady growth since 1980. The middle and lower classes have seen only about a 15% increase in real income with all of those gains coming after the early 90s.
What’s even more interesting to me is that the gains to the Top 1% seem to be steady and at first glance trend reverting. That is, there appears to be a consistent underlying rate of growth ever since 1980, with income rising above trend during booms and falling below during recessions.
Plotting the trend line reveals that the Top 1% is seeing its income grow at roughly 4.2% per year in real terms.
This is significantly faster than real growth of US GDP.
My first question then is whether this is increasing take of GDP is because of the Top 1% position as high end wage earner or owners of capital. The standard story has largely been that increases in technology has expanded gains to the most educated, those working in high tech fields.
Looking at the sources of income for the Top 1% its not so clear.
There is a lot of fluctuation but I don’t see anything to suggest that the income growth of the Top 1% is being driven by their position as high-end, highly technical wage earners (MDs, Executives, Software Architects)
And at least in the aggregate, wage earnings seem to be becoming less important. The chart below show employee compensation as a fraction of personal income.
More analysis to come.
104 comments
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Thursday ~ July 22nd, 2010 at 4:18 am
Apex
How did you calculate the index chart? Based on the first chart it appears the top 1% income should go up by more than slightly over double. Their income from the first chart goes up from what appears to be about 350K to over 1.3 million. This is a little shy of a quadruple (3.7 times).
It seems that something happened in your math when you created the index chart and then using that data you calculated a 2.85% annual increase in top 1% income. But if you use the 3.7 times increase that is apparent on the first chart you get a 4.8% annual increase in wages for the top 1%.
It looks like they have increased at faster than the growth of GDP.
Thursday ~ July 22nd, 2010 at 7:59 am
Karl Smith
Not even sure what I did there. Rebuilt this morning
Sunday ~ August 8th, 2010 at 10:13 am
SchmidleysScribbling
Rate is a function of the base. The base of the GDP is much larger so it would take a larger increase to make the rate change as fast as the income rate, especially for a subset of the population.
Thursday ~ July 22nd, 2010 at 10:29 am
Roland
Nice work..
Thursday ~ July 22nd, 2010 at 10:51 am
Turin
The rise in the top 1% coincides with the rise of two-earner income households. How much of the rise is due to two-earners households?
Saturday ~ August 7th, 2010 at 2:39 pm
Cara
@ Turin: I would speculate that some can be attributed to the rise in two income households, however I would further speculate that as many, if not more, lower income households have dual earners.
Monday ~ August 9th, 2010 at 10:50 am
Sue
I think I would disagree with that speculation, though I am certainly no expert. Don’t you think that many of the low earners are single-parent homes? Single moms as a group have been growing for years, and they also tend to fall into poverty more easily and are lower earners in general. One more reason why it’s better to have two parents in the home…especially if there are children.
Sunday ~ August 8th, 2010 at 10:15 am
SchmidleysScribbling
Excellent question. Also income is highly correlated with education. Are the more educated earning more?
Thursday ~ July 22nd, 2010 at 6:23 pm
David Lentini
Very nice. And welcome to the plutonomy(TM).
Thursday ~ July 22nd, 2010 at 6:50 pm
Curt Doolittle
Any chart that uses household income deltas that does not compensate for changes in household size and age distributions is simply patently misleading. And any chart that does not include redistributive services is patently misleading.
Much of the rise in wealth among the proletariat has been consumed by the decrease in average household size: people are buying freedom to live on their own as rapidly as possible. And the bottom quintile receives something on the order of 75% of its income in services. And most are simply unemployed, or only part time employed.
Without normalizing for these changes over time, and accounting for redistribution, any class-disparity in income is most likely to be largely attributed to the tendency of wealthy families to possess two high income earners.
Furthermore, Balance sheets describe wealth and Income statements describe randomness. How many people in the upper 10% are there only for one year? Again, this is informative.
Household income is the most deceptive political data to rely upon. To the point where using it is almost a guarantee of misrepresentation.
Sunday ~ August 8th, 2010 at 10:18 am
SchmidleysScribbling
Excellent points. Another point, household size must be controlled for number of wage earners within the household. For example, foreign-born Mexican American households have many more wage earners than foreign born Asian households, and yet the average household income for the former is lower than that for the latter.
Thursday ~ July 22nd, 2010 at 7:37 pm
Arpit Gupta
I’ve responded to your post here:
http://www.economics21.org/blog/american-households-have-not-stagnated
The “missing income” can be accounted for changes in household sizes (as Curt points out), different measures of inflation, non-wage income, and some degree of inequality.
Thursday ~ July 22nd, 2010 at 9:15 pm
Karl Smith
So, I am not trying to make some grand point. I am honestly just looking through the data a reporting what occurs to me as it occurs.
For example, I had originally mis-copied the formula so that the income growth for the top 1% was showing up as 2.85%, roughly the same as US GDP. This lead me to speculate about the puzzle that Arpit addresses.
However, Apex pointed that out, I redid the numbers and posted a different conclusion.
When I went to sleep last night I had suspected the missing income might be in health benefits, which is why I looked up total compensation as a fraction of personal income. My intuition on that was wrong and I posted the graph in the updated post.
Sunday ~ August 8th, 2010 at 10:55 am
Phoenix Woman
The problem with saying that “rich families earn more because they have more jobs” is that poor families generally work even more jobs than rich ones just to stay afloat. I know many poor and working-class families who have more than one job per adult (or even teenage) person.
Furthermore, many particularly conservative rich families still put pressure on their women not to work outside the home. One of my cousins by marriage was on the verge of wedding a guy whose hyper-rich Fundie parents wanted her to give up her job and just be this pretty blond ornament that popped out genetically-approved grandkids for them to spoil. She broke off the engagement.
Friday ~ July 23rd, 2010 at 12:02 pm
Hyena
Arpit,
Your graphs are interesting, but the latter graph shows per capita income while the former shows median. Do you have a breakout by earning quintiles or something else?
The concern of Karl’s post is income distribution, which the latter graph tells us nothing about.
Sunday ~ August 8th, 2010 at 10:20 am
SchmidleysScribbling
True, these graphs measure central tendancy, not distribution.
Saturday ~ July 24th, 2010 at 12:01 am
links for 2010-07-23 | The Exile
[...] Income Inequality: A Deeper Look « Modeled Behavior Its impressive that the income for the Top 1% races off while the income for the middle and lower class is squished towards the bottom. [...]
Saturday ~ July 24th, 2010 at 7:49 am
Dan Murray
This analysis doesn’t tell the whole story nor does it even ask the right questions. How many people during the same time period move from low to middle to the upper income groups?
I suggest incorporating an analysis of the people who moved (naturally) through their careers. Overtime incomes rise as you move from low-level work, to mid-management to more specialized skills or higher level jobs.
By merely looking at what happens within each group while ignoring the mobility of people between the income groups this analysis doesn’t tell the whole story.
It’s not surprising to me that people who earn a lot of money increase their wages over time than people who do not earn as much. By focusing on each level of wage earners like they have static (unchanging) group members doesn’t account for this natural progression.
I’ve seen other studies (that I can’t find at the moment) that effectively display this income group mobility. It’s not quite at inequitable as your analysis would indicate. Please do move from low to mid to high income groups.
Saturday ~ July 24th, 2010 at 12:57 pm
A Closer Look at Income Inequality « Stephen A. Nuño
[...] times. Its worth taking an objective look to see if we are indeed in a unique situation. Karl Smith takes a closer look at the graph above and suggests that while there has been an increase in income [...]
Saturday ~ July 24th, 2010 at 10:15 pm
John B. Chilton
Since your post is drawing deserved interest consider cleaning up some typos. It’s and Its are not the same. Likewise, your and you’re. A sentence had “is” in it twice needs a rewrite.
You may delete my comment.
Sunday ~ August 8th, 2010 at 7:06 am
Eric
You took the words from my mouth, John. Congratulations on a valuable post, however, Karl.
On another point, whether people are mobile between income groups or not, gross inequality is extremely damaging to society as a whole. I refer you to http://www.equalitytrust.org.uk/why.
Sunday ~ July 25th, 2010 at 2:41 am
Mike C
These graphs indicate to me that it’s way past time we should start killing the rich.
None of the arguments about household sizes, two earner households, or statements like And any chart that does not include redistributive services is patently misleading or Furthermore, Balance sheets describe wealth and Income statements describe randomness change my own theory about all this. Kill the bastards. And I agree overtaxing the rich isn’t the answer – killing them is. Those of us on that bottom line that never moves are sick of this crap. Eat the rich.
Sunday ~ July 25th, 2010 at 9:57 pm
jazzbumpa
Look at tax policy changes since 1980: Top rates lowered, bracket collapse, reduction of capital gains rate (bumpy, but still real). reduction in corp tax rate, reduced rate on dividends, inheritance tax.
Dan Murray -
A focus on income “mobility” can be wildly misleading. The real focus should be on wealth accumulation – which is what makes tax policy tremendously important – over a life span, and across generations.
JzB
Sunday ~ July 25th, 2010 at 11:10 pm
Rosie
And who will replace them, Mike C? People who don’t care about wealth and power?
Sunday ~ August 8th, 2010 at 1:15 am
Amy
Sounds good, Rosie! We do exist.
Not that I’m endorsing killing or eating anyone.
Monday ~ July 26th, 2010 at 12:21 am
The Haves and the Have-nots « Trinkets Of Frivolous Utility (TOFU)
[...] Haves and the Have-nots July, 2010 by Thomas Yohannan Income Inequality from → Frivolous Utility ← Trinkets No comments yet Click here to cancel [...]
Monday ~ July 26th, 2010 at 10:59 am
Curt Doolittle
Karl,
I’m saying that you’re “creating a hazard.” Journalists create hazards every day. But their job is to sell advertising space.
We are only assisting the world as public intellectuals if we eliminate hazards, or if we create opportunities, but in either case, the unsophisticated pick up on these errors and run with them to their politicians – who are incapable of understanding these concepts, and pass material legislation predicated on error.
Our interest in income is irrelevant. It only exists because of the income tax. It is ‘noise’ not ‘signal’. It is a distraction. And because the data is easily available it creates an ocean of amplified noise. Eliminating our opportunity to obtain signal.
The ‘signal’ in this case, as Jazzbumpa states above, is not income but wealth. Wealth is represented by balance sheets, not income statements, by individuals, not by households.
Saturday ~ August 7th, 2010 at 4:34 pm
RickD
This comment is just so much gibberish.
The vast majority of Americans do not have a pile of wealth to live off. That’s the point of this examination. Legal and societal changes over the past three decades have consistently favored the wealthy at the expense of those without a reserve of wealth to live off.
It seems like the capitalist system is veering off a balance that is socially acceptable.
BTW, the comment implying that the increase in relative wealth is due to household size is itself ludicrous. If you think that this is a relevant variable, the burden is on you to do so. Certainly it is hardly intuitive to argue that the super-wealthy are dominated by couples where both partners are income earners, as opposed to middle and lower classes. Personal experience suggests that the opposite holds true. Moreover, this is an argument that flies in the face of the evidence showing that the increase in income is due to income from capital, as opposed to wages.
The truth is that the super-wealthy have increased their wealth via investments, not by salary or wages.
Saturday ~ August 7th, 2010 at 11:44 pm
Chantal
“the unsophisticated pick up on these errors and run with them to their politicians – who are incapable of understanding these concepts, and pass material legislation predicated on error”
…really there guy?! The unsophisticated you speak of are not running to their legislators with a chart in their hand, they are running to their legislators with real life experience. That is the exact problem with our politicians; that they attentively listen to the academia of economists instead of the real life stories of average people. I could give a flip which chart you’d like to point to, at the end of the day, material legislation should be passed on the merits of real problems affecting the majority of Americans with solutions not gleaned from a corporate sponsored crunching of numbers. How do you say… conflict of interest? In this case, differentiating between wealth and income does not make the very real fact that American workers are finding themselves financially enslaved, any less disturbing. So if we are pointing out inaccuracies or potentially ignored parameters, the charts also do not reflect the rising costs of basics like food, healthcare and housing. One could factor expenses in to the chart too, but who wants to show just how desperately screwed those low income statistics are, really. If the blatant inequality of the charts is enough to knock any sense into even just one of our legislators I say let the “unsophisticated” run with it! Sorry to jam your noise, but you are sending the wrong signal!
Wednesday ~ July 28th, 2010 at 2:51 pm
Kathy E. Gill
A few comments in rebuttal to comments:
(1) The data that I have seen on “mobility” between classes suggests that it has slowed. NYT report from 2005 based on Federal Reserve Bank of Boston research/data showed the mobility decreased significantly from the 1970s to 1990s. Note that I do not know how /age/ is factored into the analysis. http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_03.html
Also, we are talking about the top 1% here — not the top 20% (the NYT data are broken into quintiles). I do not believe in the Horatio Alger myth that movement from the bottom 20% to the top 1% (in income or wealth) is generally achievable based on hard work and smarts. This sort of “reward” might accrue to a professional athlete or movie star, which says more about how badly out of sync our values are than it does about the meta-analysis of income disparity.
(2) The argument about two-income households coinciding with the growth in the upper 1% of households is also, IMO, a red herring. Most households in the upper 1% are living on investment income, celebrity culture income (eg professional athletes, movie stars, famous models and musicians) or income from professions like investment banking and high profile lawyering and doctoring and lobbying.
(3) The more accurate indicator of disparity would be /wealth/ rather than income. From http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
“In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers).
[...]
By the late 1980s, however, the wealth distribution was almost as concentrated as it had been in 1929, when the top 1% had 44.2% of all wealth. It has continued to edge up since that time, with a slight decline from 1998 to 2001, before the economy crashed in the late 2000s and little people got pushed down again.
[...]
The only industrialized democracy with a higher concentration of wealth in the top 10% than the United States is Switzerland at 71.3%.”
And one more quote from the article:
“Edward Wolff, the economist we draw upon the most in this document, concludes that there has been an “astounding” 36.1% drop in the wealth (marketable assets) of the median household since the peak of the housing bubble in 2007. By contrast, the wealth of the top 1% of households dropped by far less: just 11.1%. So as of April 2010, it looks like the wealth distribution is even more unequal than it was in 2007.”
Note to Admins:
Even though I was logged in to WordPress.com I was unable to comment. Your system demanded that I provide an email address, but there was no email text field because I was logged in. I had to copy my comment, log out of WordPress.com and then find the post again. I think you can fix this by changing how you have configured “Discussion”.
Sunday ~ August 1st, 2010 at 7:35 am
The Gold Rush by Ed Ciaccio « Dandelion Salad
[...] (http://www.perrspectives.com/blog/archives/001908.htm), “Income Inequality: A Deeper Look” (http://modeledbehavior.com/2010/07/22/income-inequality-a-deeper-look/), and “Why has the Post series created so little reaction?” by Glenn Greenwald [...]
Friday ~ August 6th, 2010 at 5:14 pm
Your Weekend Food For Thought « The Mess
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continue to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Friday ~ August 6th, 2010 at 8:40 pm
What collapsing empire looks like | Liberal Politics - Latest news, updates & developments
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in [...]
Friday ~ August 6th, 2010 at 8:59 pm
What collapsing empire looks like « UKIAH BLOG
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Saturday ~ August 7th, 2010 at 7:44 am
What collapsing empire looks like | empirestrikesblack
[...] sliver of the wealthiest — the ones who caused these problems in the first place – continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Saturday ~ August 7th, 2010 at 7:49 am
What collapsing empire looks like « Vince's Economic Blog
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Saturday ~ August 7th, 2010 at 12:14 pm
The decline of the US « Later On
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Saturday ~ August 7th, 2010 at 1:12 pm
Why the Economy Crashed, and Why It’s Still Crashing : Sierra Voices
[...] in a chart? Source: [...]
Saturday ~ August 7th, 2010 at 1:33 pm
StickWithANose » Saturday Linkage: Collapsing Empire Edition
[...] Inequality is equally dismal… Modeled Behavior Its impressive that the income for the Top 1% races off while the income for the middle and lower [...]
Saturday ~ August 7th, 2010 at 2:34 pm
Rita Jasper
I love this blog with all the graphs. It cuts through any propaganda that might used to misdirect or muddy the truth. I’m an artist, not a scientist so I appreciate you doing this work. I just started a blog (http://www.ritajasper.wordpress.com) that deals with (categories):
1) Poverty awareness and how issues can be addressed
2) Housing
and
3) Feeding the Spirit. This category is to encourage you and everyone to enjoy, nurture and protect your sacred spots, be that your inner child or the community garden, your backyard garden and public parks that are under threat by developers, polluters, etcetera. Many of these spots are gathering places that provoke thought and as more people come together at these places they are empowered because there is power in numbers. We must protect them.
I’m doing a lot of filming this summer, so I can edit and post in the fall.
Sunday ~ August 8th, 2010 at 7:10 am
Eric
That sounds great, Rita! I recommend these sites to you: http://www.equalitytrust.org.uk/why
http://www.resurgence.org/
Good luck!
Saturday ~ August 7th, 2010 at 3:10 pm
TEN DIVERSE BLOGGERS VIEWS, OPINIONS, THOUGHTS – 8.6.2010 « Horiwood's Blog
[...] Andrew Sullivan and Lane Kentworthy zoom in on Income [...]
Saturday ~ August 7th, 2010 at 3:43 pm
idfetch
WARNING: “Here i share my own opinion. Everything stated let’s say a fiction and has no connection with real life or real people. If you find anything related to real things author has no responsibility for this.”
———————-
As soon as one gets rich (“becomes a king”) it’s in his interest to diverge from the rest as far as possible using all the power he has. Merchants shouldn’t be be able to get richer than the king. So, kings usually impose taxes, release debit cards with fees sometimes higher than 6%, demand licences for some profitable kind of business (e.i. for Internet Service Providers). In some countries (in Ukraine for example) you loose lots of your rights when you go to another city (e.i. for medical service), and it’s not such an easy thing to go to another country, you will have to pay for a visa but won’t get it. So it’s kinda feudal system if not slavery. The state increases not only taxes but also rates for heating, gas, electricity, so it costs much more then it costs for the state.
Let’s say you’ve managed to earn some sum of money ($X) in Ukraine. You’ll pay 40% taxes, before you get the money. When you get the money you’ll need to pay 120% price (20% tax) of the goods you buy. So you worked hard earned $X and get 60/120*100=50% of $X – (money you pay to go to work, for place to live, to wash your close, feed yourself)= basically you haven’t earn anything.
Sometimes it’s not 120% but about 600%. For instance you worked for several years and earned $1000 and wanna buy a car which costs $1000 in Germany, after you bring it to Ukraine it will cost about $6000 for you. So king has a good chance to be richer than the others.
+ Military duty, since king, his kids and property need protection.
It’s not that hard to continue, but everybody understands it. Therefore wise kings usually tell us something about democracy, in good countries identification code has a good name “Security number” for instance. Probably, i should be wiser and behave like one believing in democracy.
Saturday ~ August 7th, 2010 at 4:18 pm
Jajuna » This is What Collapsing Empire Looks Like
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Saturday ~ August 7th, 2010 at 5:00 pm
CrystalSpins
So, what’s the solution?
Crystal
http://www.crystalspins.com
Saturday ~ August 7th, 2010 at 6:04 pm
George
Of course a free country will have income inequality. The people who are disproportionately more wealthy provide disproportionately more value to the economy. Should we ban people from starting businesses? After all, when someone successfully runs a business they increase income inequality!
Saturday ~ August 7th, 2010 at 6:18 pm
Michael Eriksson
It is very refreshing to see someone just looking at the numbers without touting a political agenda—and actually looking at more than one number.
Additional information that could be interesting in this context, if you have the time and energy, is:
o To what degree are the members of the top-1% the same today and ten, twenty, and thirty years ago?
o Is the change reasonably uniform within the 1 %, or is it e.g. a smaller group pulling ahead (within that 1 %)?
o To what degree do the fluctations that are visible co-incide with the up-and-downs of the overall economy? I note a strong downwards trend during the “millenium crisis”, which also seems to manifest in the wages vs. capital diagram. (Which is, obviously, what was to be expected.) Possibly, separate diagrams for wages and capital income would be helpful.
Saturday ~ August 7th, 2010 at 6:45 pm
Thomas Stazyk
Interesting, but a little confusing to the lay person. What would be particularly meaningful would be to take your second chart, which is inflation adjusted, the cost of running a ‘typical’ household. Inflation adjusted means that price changes are factored out but it would be interesting to see how new costs such as cable TV, mobile phone charges, computers, etc. have eroded wealth by increasing expenditures in a period of relatively flat income.
Saturday ~ August 7th, 2010 at 8:34 pm
What collapsing empire looks like « Bear Market News
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Saturday ~ August 7th, 2010 at 9:05 pm
» Blog Archive » What collapsing empire looks like
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Saturday ~ August 7th, 2010 at 9:28 pm
Mavis Mathews
English lesson # 1. You should have learned it in 3rd grade. “your” is NOT an acceptable way to say “you are”.
We do that by using “you’re” which really DOES say “you are.”
It plays havoc with your authenticity to mess up a basic English word … and after ALL that admirable research and interesting conclusions.
Saturday ~ August 7th, 2010 at 10:22 pm
blume58
I have nothing against the rich getting richer through fair methods. Whats troubling is the influence the rich have have in washington, the banking and tax laws always seem to favor the ones who need it the least. There was a time that if you made say 30,000 per year that was a pretty good job. Id like to see or polititians who scratch those rich peoples backs live on min wage for a year. I bet things would change REAL fast then.
Sunday ~ August 8th, 2010 at 7:14 am
Eric
Yes. The fact is that lobbying power is disproportionately in the hands of the super-wealthy. Small and medium enterprises are responsible for a larger proportion of GDP but have little lobbying power. US politicians are in the pockets of big business. See Food, Inc., for example. http://www.foodincmovie.com/about-the-issues.php
Saturday ~ August 7th, 2010 at 10:25 pm
Artigo interessante sobre desigualdade de renda | Ricardo Trevisan
[...] http://modeledbehavior.com/2010/07/22/income-inequality-a-deeper-look/ Esta entrada foi publicada em textos e marcada com a tag comparativo, desigualdade de renda, EUA, GDP, PIB. Adicione o link permanenteaos seus favoritos. ← A diferença entre construtora e incorporadora [...]
Saturday ~ August 7th, 2010 at 10:29 pm
Rod
People, I for one, have felt ever going inequality without any chart, but what we see presented here is quite shocking confirmation. What a good material for further research. I think the ever going inequality is global.
Saturday ~ August 7th, 2010 at 10:51 pm
Drasties - Dutch on the World - World on the Dutch
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Sunday ~ August 8th, 2010 at 12:09 am
Schuyler Thorpe
It’s sad that none of those on the bottom will ever see their version of the American Dream come true–no matter how many jobs they take, how hard they work, or *anything*.
And the rich? They can magically produce money like it’s water and they will never experience poverty, stagnant wages, depressed incomes, homelessness, or living paycheck to paycheck like the majority of us do.
Sunday ~ August 8th, 2010 at 12:39 am
lucky
I HAVE QICH MAN
Sunday ~ August 8th, 2010 at 12:55 am
misterLTS
This issue is becoming worst in Asia, especially in fast growing countries. I lived in Singapore and each day the standard of living is growing before the middle class could really catch up.:( and i believed it would be worst for the lower income families.
Sunday ~ August 8th, 2010 at 5:53 am
ex
Great!
Sunday ~ August 8th, 2010 at 5:54 am
under
Thank for information!
Sunday ~ August 8th, 2010 at 7:39 am
Michael Eriksson
Unfortunately, many commenters have jumped at the numbers to move the discussion in a political direction and/or introducing unbacked claims.
Consider e.g.:
o Eric who says “[...]gross inequality is extremely damaging to society as a whole.”—a claim that (while possibly true) is backed only by a link to a web page containing further claims without backing, and that need not be relevant to the current discussion.
o Rod who says “[...]but what we see presented here is quite shocking confirmation.”—clearly implying that the current state is a state of evil without providing an ounce of evidence.
o Schuyler Thorpe who says“And the rich? They can magically produce money like it’s water and they will never experience poverty, stagnant wages, depressed incomes, homelessness, or living paycheck to paycheck like the majority of us do.”—while completely ignoring that many reach people have fallen on their faces over the years (and very few can, even in a hyperbolic use of the word, magically produce money).
Without a doubt, the situation of many poor in the US is troubling; equally without a doubt, there is at least a sub-group of the rich who abuse the system, e.g. by partially being able to set their own salaries as CxOs or board members. However, unspecific criticism along the lines above really bring no benefit. On the contrary, this kind of thinking and argumentation risks painting an image similar to that presented by the Swedish Social-Democrats, where income differences are an evil per se, it is “dirty” to earn money, and where politics is aimed at distributing a cake of a certain size in as equal shares as possible, even at the cost of preventing the cake from becoming bigger and even ignoring legitimate reasons for income differences.
As an aside: It is important not to confuse the power, wealth, and influence of the big corporations with the power, wealth, and influence of “the rich”.
Sunday ~ August 8th, 2010 at 8:32 am
Mahfooz Hasan
It is despicable, the difference is in wealth there is in the world, both nationally and internationally. I wrote a similar article a couple of months ago, have a look if you have the time. ( http://wp.me/pPN5N-1Q )
Sunday ~ August 8th, 2010 at 8:59 am
aliababi
wordpress
Sunday ~ August 8th, 2010 at 9:03 am
bredstik
I hear a lot about the top 1%/10%, e.t.c. vs “the rest of us” and from your analysis I was wondering where do you get the raw/source data for your analysis?
I think it would be interesting to show a 3-D graph of some of your data that uses the “top x%” as a variable. For example “the income growth as common logs” chart but instead plotted using the quintile data as the z-axis and instead of using quintiles breaking up the quintiles into something more granular. I’ve always been curious if the data would show any “obvious” jumps or it it would be a smooth transition since the “top 1% compared to the rest of us” is *always* a large difference, it would be interesting to see at which point (and at which income) the difference starts to occur or become more pronounced.
Sunday ~ August 8th, 2010 at 9:15 am
jamie
I play ROBLOX and my account name is Jamie0 on ROBLOX
Sunday ~ August 8th, 2010 at 9:18 am
jamie
Jamie0 is always creating entertaining houses at the inspired world ROBLOX
Sunday ~ August 8th, 2010 at 3:00 pm
balladeer
Interesting take! This site makes for very good reading!
Ed Wozniak
Balladeer’s Blog
http://www.glitternight.com
Sunday ~ August 8th, 2010 at 5:37 pm
I have a problem with this. « catch me dreaming
[...] Read the full piece here. Leave a Comment Leave a Comment so far Leave a comment RSS feed for comments on this post. TrackBack URI Leave a comment Click here to cancel reply. Line and paragraph breaks automatic, HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <pre> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> [...]
Sunday ~ August 8th, 2010 at 6:14 pm
No Hope, No Change « God and Whose Army? The Blog
[...] There are some lovely photos accompanying the article, including one showing what a darkened street in Colorado looks like as a result of not being able to afford street lights. Read the article to revel in the details of this widespread misery. Meanwhile, the tiniest sliver of the wealthiest — the ones who caused these problems in the first place – continues to thrive. [...]
Sunday ~ August 8th, 2010 at 7:20 pm
What happened before we left Afghanistan — War in Context
[...] There are some lovely photos accompanying the article, including one showing what a darkened street in Colorado looks like as a result of not being able to afford street lights. Read the article to revel in the details of this widespread misery. Meanwhile, the tiniest sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. [...]
Sunday ~ August 8th, 2010 at 10:48 pm
idfetch
Just one more example how to keep others down and get richer. Here is some info on electromobiles which were avaible in 1990 but US government, oil industry, didn’t let it happen http://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F
“Oil companies fearful of losing business to a competing technology, supported efforts to kill the ZEV mandate. They also bought patents to prevent modern NiMH batteries from being used in US electric cars. Crash of oil prices in 1980s is an example of non-US governments and oil companies trying to keep customers from moving towards independence from oil.”
Same thing in Ukraine. In 90s an electric car was produced by AutoZaz but it have never been released and most of the ppl even don’t know about it.
Others who managed made electric cars by themselves can not certify and register them (Authorities comment:” You see, there’s no procedure defined how to register such cars”). If one compares the prices, it’s easy to understand that if running on an electric car costs up to 3% of the money you pay for gasoline, somebody would loose 97% of their profits.
Sunday ~ August 8th, 2010 at 11:40 pm
idfetch
I wonder if ppl understand what the crisis is.
Let’s say you work 40 hours per week and make 10 apples. Boss pays you $1 per an apple.
I work 40 hours per week and make 10 bananas. Boss pays me $1 per each banana.
So we get your $10 and buy apples and bananas. But with development of technology we start to produce 15 apples and 15 bananas per week. So bosses pay each of us $15. You are planning on buying more bananas, i’m planning to work not 5 but 4 days a week.
And then crisis comes. Bosses tell us that nobody wants to buy our apples and bananas, so they can’t pay us $1 per an apple or a banana, but they can pay 70 cents or fire some ppl from the factory. So we say:”Ok, I don’t want to be fired, i’d rather continue to work for $10 per week.” So, we continue working for $10 per week and in a while bosses tells us that we need to produce 20 apples/bananas and he’ll pay us 20*0.70=$14. We make more apples/bananas waiting for a new crisis….
Therefore you’ll never get more bananas, and I won’t have a chance to work less then 40 hours per week, probably my kids will have to work even 50, or will have the right to retire at 100 years. Because average life span is 70 years, and bosses don’t want to pay pensions. (in Ukraine 55 years for men, and 65 for women, and government wants to allow retirement after 65 years, cool ?! )
Actually in reality it’s little bit more complicated, because there’s inflation, that makes you believe that you make more money. You used to earn $1000, and now you make $1100, so boss can tell you: “You see, you got a raise, you get more, you have to work harder, or i’ll replace you by a machine/robot”. And at the same time you have to pay 1,5 times more for the same things you used to buy when you had $1000.
So, do you really believe in all these crisises, made just to allow these guys to fire ppl, they have managed to replace by robots or power tools. Even if you’re not fired you produce more but get the same money or even less.
Sunday ~ August 8th, 2010 at 11:54 pm
Jim Hagen
What??
Monday ~ August 9th, 2010 at 1:23 am
idfetch
Economic crisis is nothing comparing to what these guys can do. Remember the ’30 when such huge country like Ukraine was put on its knees just buy sliver of ppl or even one person. Let’s forget it was Stalin, the name is not so important, important the fact that millions of ppl died because one person decided to do so and it was 80 years ago. Imagine, what these guys can do now with help of cell phones (when everybody is tracked), with help of Internet: search engines know everything about us, what we want, what we’re going to buy, what education we have, etc; social networks know everything about our personal life and our relations with other ppl, blogs and emails express what we think and what we plan to do. Soviet Union didn’t have even tanks these days (in ’30s), nowadays these guys have chemical weapon, atomic bombs, satellites, robots …
It’s not aids, you can protect yourself from aids, it’s just one person that makes a decision about the whole mankind.
Just few quotations from the words of the ppl who managed to survive the ’30s: “I was going home from a kinder-garden, and i saw a guy dying from starvation. I came closer.
Then a cart was passing by, and a man jumped from the cart and came to us: “Hey, this one is still alive”
Another man on the cart replied: “It’s stupid to ran the cart back again, take the shovel”
He took the shovel and killed the guy:”And what about this one he said, pointing at me”
- “No, they won’t give 500 grams of bread for this one, let’s go”
Another comment from the guys who were doing raids and confiscating wheat:”There’re a lot of ppl dying, but while these bastard die from hunger, they still manage to hide wheat for seeding next season, so we managed to find it and confiscate it. These bastards even eat their kids, in one house there was a woman with loose hair, she was finishing eating a kid.”
If you think it’s a stupid joke, brush up the your history and see these things ARE real.
There’s no vaccine from aids but ppl must be aware of HIV. The same applies to wealthy 1%. There’s no way a democratic country can exits, but it’s more dangerous to think you live in a democratic country than to know the truth.
Therefore even if it’s not you who make the decision if oil business worth blowing up 2 skyscrapers, it’s still your right to have your own opinion about what happens.
Stop watching stupid discovery show “The colony” where ppl tell you their problem was they had no water in the bathroom. It’s #O489HAKJDHF !!! Believe me, ppl in Ukraine in ’30 didn’t care about water in the bathroom, and neither ppl in Palestine do today. You real problem gonna be how to survive, how to save yourself from being eaten, how to overcame fastidiousness to cannibalism…
Monday ~ August 9th, 2010 at 2:36 am
What collapsing empire looks like | Pitts Report
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Monday ~ August 9th, 2010 at 3:16 am
Eavesdropping on the Mad | Just Above Sunset
[...] sliver of the wealthiest – the ones who caused these problems in the first place” – continues to thrive. And he cites former IMF Chief Economist Simon Johnson last year in The Atlantic explaining what [...]
Monday ~ August 9th, 2010 at 11:18 am
What collapsing empire looks like « A History and Commentary on the Tree of Life
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Monday ~ August 9th, 2010 at 12:27 pm
What collapsing empire looks like « Bluegrass reVISIONS
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Monday ~ August 9th, 2010 at 1:11 pm
toadstoolsareseeds
Whatever benefits ownership creates in terms of motivating people to contribute is far outstripped by its inefficiency in the “modern” landscape. The relentless search for profit drives the tendrils of business into our lives in more and more pervasive ways (think about how much energy is wasted on the ads you see today). Then take a trip to the grocery store and figure out if you really need to have 12 different brands of orange juice to choose from; do we really need to duplicate the production and distribution of OJ twelvefold? We’re wasting our energy on inefficient ways of working.
My post last night relates to this:
http://toadstoolsareseeds.wordpress.com/2010/08/08/wasted-potential/
Monday ~ August 9th, 2010 at 4:24 pm
kingkabuz
Slightly depressing…
Monday ~ August 9th, 2010 at 6:43 pm
thoughtbasket
Great analysis, thanks.
Monday ~ August 9th, 2010 at 10:23 pm
burstmode
Sample sizes flaw your analysis.
Tuesday ~ August 10th, 2010 at 5:49 am
ABC Dario
Just looked very rapidly at the pictures instead of the text. The very first graph (“Inequality rising…”) jumps up and down quite a bit. Is it just because the populational sample it represents is quite small and therefore its average would behave like that? Or are there other effects.
How about putting some error bars (sample standard deviation) in the graphs too (if it doesn’t make it look too crowded)? That way we’d have an idea of the spread. I imagine that the top 1% plot would have substancial error bars, but I’m not sure “how big” is that substance.
Tuesday ~ August 10th, 2010 at 6:26 am
Gilbert
Thank you for your hard work. Hard? Yes! Because you had to know in advance the comments you were faced with and still you did it and posted it with comments turned on. Very brave. Keep up the “hard” work. Peace.
Tuesday ~ August 10th, 2010 at 10:30 am
Anonymous
[...] Modeled Behavior, an economics blog, has a beautiful set of graphs which detail the rise in incomes of the top 1% over the last 40 years, compared with the stagnation of the bottom 80%. There are a lot of different ways to look at this data, and it’s important to see it in many forms. However you look at it, the data is clear: a virtually flat set of lines for most of us and a wildly climbing curve for the top 1%, rising and falling with the “economy”. [...]
Tuesday ~ August 10th, 2010 at 11:31 am
Juan
….
Wednesday ~ August 11th, 2010 at 6:40 am
VIDEO: THE KINGDOM OF SURVIVAL + What collapsing (american) empire looks like « when beeing ANTI means being FOR human rights, coexistence and peace
[...] sliver of the wealthiest — the ones who caused these problems in the first place — continues to thrive. Let’s recall what former IMF Chief Economist Simon Johnson said last year in The [...]
Wednesday ~ August 11th, 2010 at 5:15 pm
cixass
congratulations acquainted awaited return visit
Wednesday ~ August 18th, 2010 at 1:03 pm
A quoi ressemble un empire qui s’écroule ?
[...] minorité des plus riches – ceux qui sont les premiers responsables de ces problèmes – continue de prospérer. Rappelons-nous ce que l’ancien économiste en Chef du FMI Simon Johnson a déclaré l’année [...]
Thursday ~ August 26th, 2010 at 5:17 am
ranap
nice post seethisjobs.blogspot.com/
Thursday ~ September 16th, 2010 at 12:27 pm
Republicans – The Tea Party « The Joe Blow Report 2
[...] of moral turpitude. Those are common problems for a country whose middle class is eroding as the rich-poor gap rapidly widens. If the kinds of financial struggles O’Donnell has experienced are disqualifying from high [...]
Thursday ~ September 16th, 2010 at 9:46 pm
Drasties - Dutch on the World - World on the Dutch
[...] of moral turpitude. Those are common problems for a country whose middle class is eroding as the rich-poor gap rapidly widens. If the kinds of financial struggles O’Donnell has experienced are disqualifying from high [...]
Friday ~ December 31st, 2010 at 11:42 am
Top 5 from 2010 « Modeled Behavior
[...] 3) Income Inequality: A Deeper Look [...]
Monday ~ March 14th, 2011 at 11:51 am
Nic Gibson
if who is in the top 1% of earners fluctuates yearly, then it would make sense that it would naturally increase faster than GDP, since these folks would be the top winners in the higher growth edges of the economy as a whole- they are the people doing particularly well in a given year. The winners are going to be winners by definition right? Wouldn’t we always expect them to pull away from the pack and the GDP norm, just like we would always expect the top two teams in the NCAA tournament to have a higher win ratio than other teams? It seems like ‘overperformance’ would be odd if we were tracking a static group of people over time, but if we are simply tracking only those that are in the 1%, which could change drastically over the course of 5 years, then wouldn’t we expect to see this kind of thing? How do we go about trying to use these numbers to talk about policy or issues of capitalistic regulation? It seems like we’d have to track people rather than a category unless the people and categories are static- the same people are continually in the same categories.
Tuesday ~ April 26th, 2011 at 10:05 pm
robertoferre
Do you people have a myspace fan webpage? I searched for one on twitter but couldn’t locate one, I would really like to become a fan!
Tuesday ~ May 24th, 2011 at 4:33 am
Tattoos New А W
DragonTattoos New Zealand are popular today. In our times about thirty percents of people that want to make a tattoo like a dragon tattoo image. Maybe the cause for such unbelivable popularity is that dragons are personages of a big number of legends in nearly all countries. Dragons can have different character, but they are for sure great creatures. The second cause may be that there are many of styles of dragon images that are totally different in design and in meaning. But there are two main types of dragon tattoos: Western dragon and Eastern dragon.
Thursday ~ June 23rd, 2011 at 2:27 pm
Loryn
Thanks for writing such an easy-to-undrestnad article on this topic.
Sunday ~ September 4th, 2011 at 5:10 pm
Redeker
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Monday ~ September 19th, 2011 at 8:41 pm
Jorge Carolin
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Tuesday ~ September 20th, 2011 at 2:34 am
Economy Number Games | Thoughts on modern life
[...] http://modeledbehavior.com/2010/07/22/income-inequality-a-deeper-look/ [...]
Monday ~ October 3rd, 2011 at 11:04 pm
Class Warfare - A historical perspective... - Political Wrinkles
[...] Warfare – A historical perspective… When a picture is worth a thousand words… Income Inequality: A Deeper Look *Modeled Behavior I'm just glad those rich folks who make up the top 1% and OBVIOUSLY are driving the GDP so that's [...]
Saturday ~ October 22nd, 2011 at 4:13 am
make more twitter followers
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Thursday ~ January 5th, 2012 at 3:15 am
Best Instructional Guide to European Car Breakdown Cover
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