
Our Broken Economy, in One Simple Chart - mathieutd
https://www.nytimes.com/interactive/2017/08/07/opinion/leonhardt-income-inequality.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-right-region&region=opinion-c-col-right-region&WT.nav=opinion-c-col-right-region
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Hasknewbie
Dupe of:
[https://news.ycombinator.com/item?id=14956698](https://news.ycombinator.com/item?id=14956698)

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davidp
What do those charts look like for the rest of the world? I don't have the
stats handy but I'm fairly confident that the middle class in China,
Indonesia, and Malaysia has dramatically expanded over that time period, so
it's arguable that the world is a (net) better place. If the author wants to
make a nationalistic argument that US workers should have done better than
their counterparts elsewhere, I guess that's OK, but I suspect that's not his
intent. Either way, ignoring the fact of increased globalization over that
time period undercuts the argument.

Rather, his supposition is that middle-income workers in the US have missed
out on gains that have instead gone to upper-income workers in the US. That's
false, for the same reason that workers in a single company don't "miss out"
on the money given to its executives. As defined by skill sets, the labor
pools for upper-income workers and lower-income workers don't intersect,
globally or otherwise.

This matters because it affects the solutions we choose. Income inequality is
a symptom of the deeper problem of reduced American competitiveness 1)
_relative to our peers_ , 2) _in the middle- and lower-income labor markets_.
Because so many more middle- and lower-income skill workers have come online,
who are delighted to accept lower wages than US workers because it's an order-
of-magnitude improvement over what they had before, these US workers would
lose ground merely by remaining as productive as they were 34 years ago.

So in order to maintain the globally-superior wages we have become accustomed
to, we must maintain and even increase our productivity edge. How do we do
that?

 _That_ is the challenge, not income inequality itself. "Fixing" the problem
by calling the situation "unfair" (and taxing upper-income US workers out of
vengeance for their presumed unfairness and exploitation) isn't a fix at all.
It's like prescribing painkillers when someone has a broken leg; the problem
isn't the pain, it's the broken leg.

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whicks
It seems to me that you're ignoring the huge increases on the far right side
of the graphs in the article. How does the wage increase of the top 1% (or
higher, even) factor into your view of the "less competitive" middle income
working class of the US? Has the top 1% really become _that_ much more
productive over the last few decades relative to the middle class? I really
don't think so, but I'm not an expert on this.

It seems to me that you're defending the uppermost social class in the US, and
are attempting to place blame on the middle class of the US for not being able
to compete on the global stage against the lower classes of third world
nations. They aren't necessarily more productive, they're just willing to work
for less. A lot less. I may be misunderstanding your entire point, though.

> So in order to maintain the globally-superior wages we have become
> accustomed to, we must maintain and even increase our productivity edge. How
> do we do that?

Couldn't we do this by having competitive taxes on the highest income workers,
and then reinvesting that money into things like: reducing the cost of
education, reducing the cost of healthcare, improving mass transit and
infrastructure, and other things that in general detract from the middle
class's ability to "increase our productivity edge". This seems like at least
a step in the right direction, instead of allowing the upper echelons of
society to vacuum up and hoard billions of dollars that aren't serving any
higher goals other than making a select few wealthy beyond reason.

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davidp
> Has the top 1% really become _that_ much more productive over the last few
> decades relative to the middle class?

No, and that's actually the crucial point: High wage earners in the US have
remained that much more productive than their competitors around the globe.
They don't compete/compare at all with middle- and low-wage earners in the US.
The "pie" we're slicing up isn't the US GDP (which would be the zero-sum game
you-win-I-lose math assumed in the article), it's global GDP.

> It seems to me that you're defending the uppermost social class in the US,
> and are attempting to place blame on the middle class of the US for not
> being able to compete on the global stage against the lower classes of third
> world nations. They aren't necessarily more productive, they're just willing
> to work for less. A lot less.

I'm identifying the correct problem to solve. The goal is to return to income
growth distribution closer to that seen in 1980, since there's a host of
benefits to a pluralistic democracy when _everyone_ is doing well. In
particular it makes social transitions _much_ easier, such as social justice
and access to healthcare, because there's less sense of loss for the
incumbents, and the costs of the changes can be borne more easily.

But if you misidentify the problem as mere existence of difference in income,
or worse, that growth in the high-income bracket comes exclusively or even
mostly from exploitation ("unfairness"), then you'll never solve the real
problem, which is:

> They aren't necessarily more productive, they're just willing to work for
> less. A lot less.

Exactly. The same work, at the same quality, is now actually worth less in
real dollar terms than it used to be.

In the 50s and 60s US middle-income workers were much more productive than
their peers in other countries, and could charge more for their labor. Now
others in the world have caught up (dramatically improving their own quality
of life, it should be noted), and if we want to keep getting paid more than
them, we have to increase our productivity again. Alternatively we could put
trade barriers in place to tilt the playing field in our favor, but the cost
for that is borne by consumers of all income classes (via higher prices).

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buttcoinslol
Here's the thread where everyone reveals their social class.

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anovikov
Why is this a problem, as long as everyone is not worse off? Growth should go
to the people who make it possible - in 1960s it were highly qualified,
unionized industrial plant workers. Now these are people like us. Not some
imaginary predatory capitalists.

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maxxxxx
Because a society doesn't work well if only a few people receive the benefits
of progress. The big strength of the western economies since the 50s that most
people benefited from advances. If more and more people start to feel that
their life stagnates the economy will stagnate too.

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monocasa
> If more and more people start to feel that their life stagnates the economy
> will stagnate too.

Or worse, they start pulling out the guns and guillotines.

~~~
maxxxxx
That has historically been the fine balance for the upper class. How much can
you squeeze the lower ranks before they cut your head off?

