Forum > American Politics
Incomes Collapsing in the US
cybercoma:
In a recent study by economists include Thomas Pinketty, The distribution of pre-tax national income adjusted for inflation in the United States has fallen steadily over the last 40 years. The bottom 50% fell from a 20% income share in 1978 to just 13% today. In France, on the other hand, incomes grew by 39%. The authors of the study believe this implies that nation-specific public policies have a profound impact on income inequality in industrial nations.
Article: http://www.marketwatch.com/story/income-share-of-bottom-50-is-collapsing-finds-researchers-including-piketty-2017-02-07
TimG:
This concern over income equality needs to have a reality check. I assume that no one wants to live in a society where everyone is equally dirt poor which means income equality is not a problem in itself. It must combined with other statistics before you can say whether the numbers are a concern. Two immediate questions come to mind:
1) How does the US compare to France wrt income growth?
2) How much of the difference is due to rich French people simply leaving the country?
IOW, if *absolute* incomes for the lower 50% grew in the US but fell in France then we don't really care that the *share* of income held by the lower 50% dropped.
Similarly, French policies may discourage wealth accumulation but if that has the side effect of slowing job growth and business creation then that bad for France in the long term.
cybercoma:
--- Quote from: TimG on February 07, 2017, 03:32:24 pm ---This concern over income equality needs to have a reality check.
--- End quote ---
I'm sorry, but the reality check is all yours. Income inequality in OECD nations is linked to a ton of social and health issues. If you want to know how, this was the beginning of a ton of research on the topic. https://www.ted.com/talks/richard_wilkinson
Edit: If you don't give a **** about people's health and social welfare, then there's a ton of research from the OECD showing that inequality hurts economic growth. This has been corroborated by other researchers, whose articles are behind paywalls, so I haven't included them.
http://www.oecd.org/newsroom/inequality-hurts-economic-growth.htm
https://www.oecd.org/social/Focus-Inequality-and-Growth-2014.pdf
http://www.oecd-ilibrary.org/social-issues-migration-health/trends-in-income-inequality-and-its-impact-on-economic-growth_5jxrjncwxv6j-en
https://www.imf.org/external/pubs/ft/sdn/2015/sdn1513.pdf
Here's an article showing OECD income and labour share trends:
https://www.oecd.org/g20/topics/employment-and-social-policy/Income-inequality-labour-income-share.pdf
cybercoma:
More importantly, who just looks at the fact that literally half the US population is making less money and shrugs their shoulders? You miss the entire point if you think it's just a simple comparison between France and the United States and even if it were, you're ignoring the desperate situation that US health and education metrics have been in decline.
TimG:
--- Quote from: cybercoma on February 07, 2017, 05:25:22 pm ---More importantly, who just looks at the fact that literally half the US population is making less money and shrugs their shoulders? You miss the entire point if you think it's just a simple comparison between France and the United States and even if it were, you're ignoring the desperate situation that US health and education metrics have been in decline.
--- End quote ---
The data you linked to does not establish that incomes are dropping. It only claims that the *share* of income earned by the bottom half is dropping. There is a huge difference. For example, it the incomes of the bottom 50% have risen faster in the US than in France over the last 50 years, however, because France is so hostile towards the rich the share of the total income did not change in France. It is not clear to me that this means France is better for poor people. If anything, France's high youth unemployment rate and poor track record at integrating immigrants into the work force makes France a less attractive place to live than the US for anyone who don't have a guaranteed job in government or government protected industry.
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