The poor get richer

[Dinner]

Originally posted by DanS


You may not know this, so I'll clue you in. An editorial is the opinion of the paper's editorial board. This article is not an editorial. It was clearly marked by me and the NY Times as an opinion piece.

Even worse.

[Aeson]

Originally posted by Ben Kenobi
So if someone in Africa is making twice what he was last year, he's worse off just because a CEO in New York is making 2 and a half times more this year then last?

It's not sufficient to just look at 2 people and say they're both better off so the system is flawless and shouldn't be improved. Consider the actual job being done and how much compensation is received for performing that job. The standard of living of the person doing the job may very well have dropped drastically due to the job being moved to where it can best exploit cheap labor.

Globalization has expanded economies. The "poor" contributers to those economies though are still as poor as ever... and in many cases are poorer than they were recently. The truely poor are just found outside some lines you draw on a map and are ignored.

[forbkonly]But keep supporting that CEO who figured out a way to skim more off the top by paying workers less for the same job. IIRC that's what Jesus would have done. I mean, CEO's don't have camels these days so that changes everything.[/forbkonly]

[chequita guevara]

Originally posted by Ben Kenobi
So if someone in Africa is making twice what he was last year, he's worse off just because a CEO in New York is making 2 and a half times more this year then last?

Why is economics a zero sum game?

Good lord.

[Ben Kenobi]

It's not sufficient to just look at 2 people and say they're both better off so the system is flawless and shouldn't be improved.

It's a thought experiment. Wages are increasing, but wage disparities are also increasing. Given my example, is it a bad thing for the other worker to have his pay double even though other people get a higher proportionate increase?

Not that difficult a question.

Consider the actual job being done and how much compensation is received for performing that job. The standard of living of the person doing the job may very well have dropped drastically due to the job being moved to where it can best exploit cheap labor.

Standard of living of who? I'm talking about the poor soul who is the cheap labour. That's my question. Is it bad for him if his wage jumps up considerably?

Globalization has expanded economies. The "poor" contributers to those economies though are still as poor as ever

Poor contributors where? In Africa? I would contest that, there is growing evidence that they are making more money then ever before. Their standard of living is increasing, even as other people's standard of living is increasing faster.

But keep supporting that CEO who figured out a way to skim more off the top by paying workers less for the same job. IIRC that's what Jesus would have done. I mean, CEO's don't have camels these days so that changes everything.

Unlike you I don't believe class warfare is a good thing. Why should CEOs which find a way to make a business more profitable be rewarded for doing so? Why is it a bad thing if the standard of living of his workers goes up as a result?

You see it as 'farming out slave labour', but that's just because you don't believe that blacks and brownies deserve to have decent jobs too.

[Aeson]

Originally posted by Ben Kenobi
It's a thought experiment. Wages are increasing, but wage disparities are also increasing.

(lol@ "thought experiment")

You've completely missed the point. Wages are not necessarily increasing for a particular job. In some cases wages for a particular job have decreased dramatically by being moved from one labor market to another.

30 years ago, the person who works at the textile factory which makes your shirt you wear may have owned a house and a car and sent their kids to college. Today the person doing the same job may be working insane hours for pennies a day, no health care of any sort, and live in a shack with no plumbing...

You want to say it's all good because (likely) the person who used to work at the textile factory is now in a better career, while the person who currently works in the textile factory (likely) had no livelyhood at all before. That's fine, and true to some extent. What isn't fine is pretending like the income gap (or consuming gap) has magically decreased when really all that's being done is the poor are being ignored now because they don't live between the same lines on a map as the rich.

Given my example, is it a bad thing for the other worker to have his pay double even though other people get a higher proportionate increase?

Increasing standard of living is good. How you do it for a specific person is not necessarily good overall though. (And there of course can be better ways than others.)

Having compensation drastically reduced for jobs to the point that workers live in abject poverty is not a good thing in my opinion. It signifies that necessary work is not being amply rewarded, especially damning in cases where before that same work was better rewarded (and economically feasible to do so). It's a regression in standard of living for workers as a whole in that industry/job.

No. I don't see that as a good thing.

Globalization and free trade are good. Exploitation of workers not so much, sorry.

Standard of living of who?

I was quite specific. Standard of living of the person filling a specific job.

Unlike you I don't believe class warfare is a good thing.

No class warfare. Crystal ball much?

Why should CEOs which find a way to make a business more profitable be rewarded for doing so?

It's good business to make things for less. Undeniable. That's not the point.

You want to take a job, move it someplace else, pay the worker less than what you were paying the worker you've displace to do it, and pretend you've lowered the income gap. It's a ludicrous evaluation regardless of the economic impact of the change.

Why is it a bad thing if the standard of living of his workers goes up as a result?

Who said anything about it being a bad thing if someone gets a pay increase? Get a grip on reality BK.

You see it as 'farming out slave labour', but that's just because you don't believe that blacks and brownies deserve to have decent jobs too.

You're mentally handicapped or something, aren't you?

I think everyone deserves to be paid as well as what the same job would pay in the US or other wealthy nation. I understand this won't happen, but still hold it as an ideal. Globalization is a good thing, but we're only half-assed globalizing. We're sending the jobs out, but not the compensation. While this may be better than not sending the jobs out at all, it still isn't as well as we could do.

You are the one advocating the discrepancy in compensation that people are paid for the same job based on where they happen to live (if not nationality/ethnicity). Remember: Ignore that "mote and beam" thing Jesus talked about. Just keep making up accusations and stay away from any introspective thought. That's what good Christians do, right?

[Vanguard]

Originally posted by chegitz guevara


Actually it does. People in the lowest quintile include retirees and landlords and other folks with passive income or who are spending down savings, selling off property, etc. The mistake here is to equate low regular income with poverty.

It is very definitely lying with statistics. So it is not a case of the poor getting richer.

You're right. Basically the lie is to count retirees in the lowest fifth of income because they no longer work at all.

But these not people who have spent their lives in the lowest quintile. They are simply people who have deferred consumption.

So the bottom fifth in this graph consists of not just poor people. It also includes a large number people who spent their entire lives in a high quintile and have significant savings from that time.

This affects the graph both ways----- it reduces the consumption of the higher quintiles (since consumption is deferred until retirement) and greatly increases the consumption of the lowest quintile (since they spend their savings to take cruises).

It is pure statistical fraud.

The other way the article lies is by substituting absolute poverty for relative poverty. So because goods today are cheaper to make and much easier for realpoor people to buy, it is therefore equated that the poor are getting richer. Nothing of the sort is happening. They may have more stuff, but their position in society is still the same or worse. They are still taking home a smaller and smaller share of what society produces. Also, in absolute terms, they aren't doing so well either.

The real poor spend an ever greater proportion of their income on rent and food than they used to. Forty years ago, they spent 25% of their income on food. Ten years ago, it was around a third of their income on food. The price of housing has gone up considerable, and medical care has gone in to orbit. So while trinkets and gew gaws may be easier to afford, the necessities of life are not.

Yes, I agree. In the long run, relative poverty is all that matters. Certainly having cheaper consumer goods is a short term benefit to the poor. But in the long run, competition from the rich will more than counter-act this benefit. The higher profits that come from serving the rich will eventually cause the price of consumer goods to increase out of the reach of the poor---- either by inflation or by a fall in incomes.


Also, one additional point about Cox's piece: The graph which shows consumer goods being available to more people sooner has no validity. Unless, of course, you think that the time period which includes World War I, the depression after that war, The Great Depression and World War II is a valid comparison with the 1990s.

[Dinner]

I don't see the poor getting richer by going into debt. Sure, temperory consumption spikes but the debt is likely unsecured debt like credit cards and we all know the Republican controlled Congress has practically striped Americans of the ability to discharge credit card debt in bankruptcy.

What we're creating isn't more wealth but a class of heavily indebted serfs who are unable to get out of their servitude.

[Dinner]

Originally posted by Vanguard
Lying with statistics. It's easy and it's profitable!

In the first place, the data in this editorial are highly questionable. In particular the editorial doesn't clearly explain why the lowest income people can spend twice as much as the earn.

The only reasonable way to explain this is assume that consumption by retirees on Social Security is included in this amount. Which is ridiculous. Even worse, counting retirees as zero income because they don't work, but counting their non-voluntary purchase of overpriced health care as consumption is outright deception.

This BS data alone invalidates the entire editiorial. This is nothing but deliberate misinformation.

This man speaks truth. This is deliberate lies and nothing else.

[Dinner]

Wrong thread.

[CrONoS]

Originally posted by chegitz guevara


Yes.

Are you sure;

I don't have too much time but in Canada, income available after tax has raised from around 55% from 1992 to 2007. But our Consumption Price Index on food have increased from around 33% from 1992 to 2007.

If I had more time I would have made a chart about the evolution of income for the lowest quintile, that would be more accurate.(, I don't know if the word quintile exist in english, maybe it can be translated as fifth, if someone can translate it it would be appreciated)

I put the name of the table if they want to know more about each stats.
I Hope we can compare Income Avail after tax and the Food Index. (I'm not an expert in stats)



Source: StatCan
CPI for Food:
Income Available after Tax:Table 3840013

[Jon Miller]

How has the difference in incomes between rich and poor gone up?

JM

[CrONoS]

@Jon:
[From Wikipedia]

http://en.wikipedia.org/wiki/Gini_coefficient

US income Gini coefficients over time
Bigger the number, bigger is the inequality.

Gini coefficients for the United States at various times, according to the US Census Bureau:

* 1967: 0.397 (first year reported)
* 1968: 0.386 (lowest coefficient reported)
* 1970: 0.394
* 1980: 0.403
* 1990: 0.428
* 2000: 0.462
* 2005: 0.469 (most recent year reported; highest coefficient reported)[3]

In the 37 years between 1968 and 2005, the Gini coefficient went down in only seven years. Some argue this rise corresponds to the lowering of the highest tax bracket, for example, from 70% in the 1960s to 35% by 2000. However, many other variables that could affect the Gini coefficient have changed during this period as well. For example, much technological progress has occurred, eliminating formerly middle-class factory jobs in favor of the service sector; additionally, the economy has shifted towards professions that require higher education.

[Jon Miller]

Then average doesn't mean a lot, does it? Wouldn't median, or median of the lower 25% mean a lot more?

JM

[CrONoS]

Originally posted by Jon Miller
Then average doesn't mean a lot, does it? Wouldn't median, or median of the lower 25% mean a lot more?

JM

yes but like I said, I don't have time to search through statcan database having the the income after the lowest 20%.
(On a side note; the median would also be better, but the best would be the median income for the lowest 20%)

Maybe the results would be different.

[CrONoS]

If someone want to look over statcan, and found the data. I can download it and I'll made a graph of it. I can have access for free from my university VPN network.

http://www.statcan.ca/menu-en.htm