
Income Inequality (2016) - niklasbuschmann
https://ourworldindata.org/income-inequality
======
nabla9
The Economist has good overview of how inequality affects growth:
[https://www.economist.com/blogs/economist-
explains/2015/06/e...](https://www.economist.com/blogs/economist-
explains/2015/06/economist-explains-11)

Particularly interesting is the "savings glut" argument. Rich are spending
smaller part of their income. As a result, income equality leads to situation
where income flows into investments or property values and demand starts to
decrease after a while, leading to smaller return for the investments.

~~~
jopsen
There is correlation, but this entry says:

> Indeed, the empirical literature on the causal effect of inequality on
> economic growth is largely inconclusive.

It's tempting to think that income inequality drives demand down and causes
less economic growth. I would actually agree, yet the scientific evidence
might be missing.

IMO, we should put limits in inequality, not because of what we think it might
do to the economy, but because it's the decent thing to do! Because we're nice
human beings :)

~~~
maxxxxx
"IMO, we should put limits in inequality, not because of what we think it
might do to the economy, but because it's the decent thing to do! "

Agreed! In the end it's a question of values.

~~~
jopsen
Writing another comment I realized I used the term "decent", because these
values sits very deep in me that it was just feeling. Reflecting on that I
suspect the thing I really want is to:

    
    
      maximize happiness in the universe.
    
    

(no more, no less)

------
dulse
I see this as one of the most fundamental problems the next generation will
need to face. How do we build better models to give access to wealth creation
outside a small number of highly leveraged technology companies to a wider
group of society? Recent trends in the gig economy, AI, and medicine make me
worry more we are slipping toward a super asymmetrical world like Gattica or
Altered Carbon -- which is not the world we should want to live in. We should
want to preserve a strong path to the American middle class for everyone.

Despite the hype, I'm bullish on cryptocurrency tokens on potentially being a
model of a more equitable design for firm returns. If done correctly, the
returns of firms could go to the early participants in the network, instead of
the VCs and early accredited investors that have special access. The ICO world
today isn't there yet (a lot of pre-sale discount tokens to those privileged
VCs; lots of ICOs aimed at the larger public are scams, and it's hard to tell
the difference between them) but I think we have the tools to create more
equitable models, if we only have the will.

~~~
skookumchuck
> How do we build better models to give access to wealth creation outside a
> small number of highly leveraged technology companies to a wider group of
> society?

We have one - the stock market. $100 invested in Amazon the day it started
trading would be worth something like $20,000 today.

Investing in the market has become very democratized. Online brokers offer
inexpensive access to everyone, and you can start investing for $100 or less.

~~~
fungiblecog
So gambling is your solution? It's easy to identify Amazon after the fact just
like it's easy to identify the winner of a horse race. Go back to the dawn of
Amazon and invest $100 in some of the other startups that look just as likely
to be big and now your $100 is $0

~~~
charlesdm
Everything in life is gambling and probability. Take a job? You might get
fired tomorrow. Start a business? It might fail. Invest in a company? It might
turn out to be worth a billion, or $0. Borrow money from a bank? They might
try to screw you over at some point, or not. The economy might tank tomorrow.
The market might tank tomorrow. An astroid might hit the world in six months.

~~~
manjushri
Seems like a strawman argument. Sure, metaphorically "everything" might be
gambling, but the point is to play games with better odds for everybody except
the casino.

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moduspol
I know it's tougher to measure, but I'd rather see some in-depth measurement
on how much better of a lifestyle the same wealth provides over time. And with
that, how much that lifestyle is improving at different income levels.

The promise of a capitalist society isn't that it will bring income equality--
it's better products and services at better prices. Someone having more zeroes
in their bank account than me is irrelevant if my lifestyle is improving
faster than theirs.

Again, though, I know it's tougher to measure.

~~~
alehul
Agree entirely with this! Capitalism's benefit in my opinion is far from
equality.

People view 'inequality' as a problem, but I'd say to be more accurate,
poverty is the problem while equality seems like an easy solution.

~~~
andrepd
But inequality is a problem in and of itself. The fact that some people have
obscene amounts of money means some other people have less wealth that they
_could_ have. Obviously I'm oversimplifying and perfect equality isn't
achievable (or even desirable).

~~~
alehul
I see your point, but is spreading wealth out the goal?

Oftentimes, that obscene concentration of wealth is the result of something
that has enhanced everyone's lives in a way we'd struggle to measure
quantitatively.

An example would be the wealth concentration created from mobile phones, which
enable much more effective communication and, possibly more importantly, the
ability to call for help (police, ambulance, etc.) from anywhere at any time.

~~~
madmatt1123
Replying to andrepd's comment to your comment: The incredible amount of Work,
Capital Outlay, Engineering, etc.etc.etc. that is required to create mobile
phones is a huge barrier to any group of people doing so. Therefore, they are
incentivized to generate a profit on each phone they eventually produce/sell.
If the phones are popular enough, then they may make quite a lot of money.
Like jesus dude, nobody forces anyone to buy a phone - everybody is doing it
of their own volition and that's why mobile phone developers get rich.

------
martin1975
Disclosing the CEO-to-median-pay-ratio ought to help with investment decisions
into companies. It is in effect as of this year.

[https://www.sec.gov/news/pressrelease/2015-160.html](https://www.sec.gov/news/pressrelease/2015-160.html)

------
aramadia
This seems to focus on pre and post tax inequality of outcomes at a specific
moment in time.

The more interesting data would measure how fluid are the populations of
income deciles between generations or even within a single lifespan.

~~~
darpa_escapee
Maybe this graph[1] is what you're looking for? It's not income deciles, but
quintiles.

[1]
[https://itdoesnotaddup.files.wordpress.com/2015/06/capture5....](https://itdoesnotaddup.files.wordpress.com/2015/06/capture5.png)

~~~
rosser
Interesting: nominally more of the bottom quintile both stay in that quintile,
and make it to the top quintile, than stay in the top, and drop to the bottom.

    
    
      bottom -> bottom: 41%
      top -> top:       40%
    
      bottom -> top: 9%
      top -> bottom: 8%
    

I guess that's kind of evidence for mobility? From the shapes of the other
bands, coming from money still massively biases for ending up with it, and not
coming from it against.

------
LarryDarrell
Income inequality doesn't bother me as much as inherited wealth.

~~~
snakeboy
Can you elaborate? Do you mean the advantages given to the benefactors of
inherited wealth cause society to suffer?

~~~
k__
it leads to longer accumulation. Money that isn't available for the rest of
society.

~~~
aantix
70% of Rich Families Lose Their Wealth by the Second Generation
[http://time.com/money/3925308/rich-families-lose-
wealth/](http://time.com/money/3925308/rich-families-lose-wealth/)

~~~
LarryDarrell
Since they are just going to squander it anyway, it becomes even harder to see
a serious objection to severe estate taxes then. :)

~~~
nybble41
_Spending_ inherited money is not the same as _squandering_ it, and of course
this does not occur in every case. More to the point, however, the objection
to the estate tax does not depend on how the inheritance is used. The owners
of the estate desired to give it to their inheritors, not the government. _As_
the owners, and thus the ones who either earned the property or received it as
a gift from others, the final disposition of their property is properly their
decision to make.

------
jeffreyrogers
There's a methodological problem with some of this data: the top 10% of income
earners is a statistical category. The share of income going to the top 10%
doesn't tell you much about actual inequality as experienced by real people
unless you know how static the individuals making up the top 10% are.

Imagine that everyone gets a year in the top 10%, but that the top 10% has 90%
of the wealth. That's not that problematic because the benefits of being in
the top 10% are evenly distributed throughout society, despite this being a
highly unequal society if you use share of income going to the top 10% as your
inequality metric.

Basically, looking at the top 10% isn't helpful for understanding income
inequality because the top 10% is an unchanging statistical category. You need
to look at the people who are in the top 10% (at any point in time) and look
at how their wealth changes over time.

Edit: Last time I mentioned this people thought I was arguing that inequality
isn't a problem. I'm not saying that. I am saying that you need to look at how
individuals wealth changes over time to see how much of a problem inequality
is.

------
evanlivingston
Off-topic, but it seems like posts about income inequality have been pushed
down lately, farther than a natural HN rank should account for.

[https://www.atlasobscura.com/articles/rice-disease-
mystery-e...](https://www.atlasobscura.com/articles/rice-disease-mystery-edo-
tokyo-navy-beriberi), ranked 30th, has 100 points, 10 hours old and 12
comments.

[http://www.ronpatrickstuff.com/](http://www.ronpatrickstuff.com/), ranked 8,
5 hours old, 25 comments

this post, ranked 41st, 2 hours old, 133 comments.

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amai
Isn't wealth inequality much more important?
[https://en.wikipedia.org/wiki/Distribution_of_wealth](https://en.wikipedia.org/wiki/Distribution_of_wealth)

------
jopsen
THe best part of that entry was:

> This means that inequality is most likely not inevitable.

Gives me hope for the future. Inequality can indeed be reigned in with policy.

~~~
thebigspacefuck
What's intrinsically wrong with inequality?

~~~
andrepd
Plenty. Inequality of power, inequality of influence, inequality of
opportunities, inequality of access to education, housing, healthcare. All of
that is wrong, and can be corrected.

~~~
nybble41
The topic was inequality of _wealth_ and/or _income_. What is intrinsically
wrong with that?

People make different choices and end up with different outcomes. This is
perfectly natural; making choices and dealing with their consequences is a
fundamental part of being human. The only way you'd be able to guarantee
either equal income or equal wealth would be to take away people's ability to
make meaningful choices with regard to their own lives.

~~~
andrepd
The playing field is not equal, therefore you cannot speak of outcomes as
being a function of choices. If people start a foot race, some 10m from the
finish, some on the other end of the stadium, first you have to make everyone
start with the same opportunities, _then_ you can talk about merit.

~~~
nybble41
_The playing field is not equal, therefore you cannot speak of outcomes as
being a function of choices._

When did I ever say that outcomes were a function _only_ of one's own choices?
Outcomes are determined by both choices and other factors. Some of those other
factors are pure chance; most (including inheritance) are the result of other
people's choices. Forcing equality of opportunity has all the same problems as
forcing equality of wealth or income—you can't do it without eliminating
choice.

Since you brought it up, _merit_ is a function of what you do with the
opportunities at your disposal. One who achieves a little with limited
opportunities shows just as much merit as one who achieves much with more
significant opportunities.

Instead of an individual foot race, perhaps it would be more instructive to
look at life as a relay. Each participant does what they can before passing
the baton to the next member of their team (the next generation). In the
beginning every team started from the same position (bare subsistence). It
would be wrong to judge the fairness of the race based on individual starting
positions; you have to consider the cumulative efforts of the entire team.
(Always keeping in mind, of course, that _life is not a sport_ , so the value
of such analogies is necessarily limited.)

------
tjr225
Interesting, the graphs confirm the rapid increase in income inequality here
in America. Amazing how history repeats itself.

------
ggg9990
While observing this run-up in income inequality and the unwillingness of the
rich to do anything about it, I’ve concluded that we haven’t really learned
anything and are going to have a French Revolution or Russian Revolution style
“shoot them in the streets” event.

~~~
throwaway1748
If anything, I think the rich in Silicon Valley are the most willing to do
something about it. Basic Income is a very popular idea amongst left-leaning
wealthy people these days

~~~
ggg9990
Basic income is probably not going to do the trick.

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arpgy
Anyone know why they are using a logarithmic axis in the chart in section I.5?
At first blush seems disingenuous.

------
aje403
Why are they placing the US next to Mexico on a chart of "children living in
poverty" and using the world "relative" to disguise that

~~~
maxerickson
They aren't disguising anything, the measure they are showing is plainly
described.

If the article were about poverty it might be problematic to show relative
poverty, but it's about comparing income inequality across nations.

~~~
aje403
Oh now I get it, what an excellent metric devoid of bias, not meant to
deceptively grab attention, can we put Kenya on the graph too to show how much
less income inequality and poverty their children are subjected to relative to
the US?

~~~
maxerickson
It's below the fold on a page devoted to a wonkish discussion of an issue. It
isn't grabbing any attention.

Maybe you think they should have just left the US out of the article or
something?

To me you are asking for a bizarre form of spoon feeding, where an in depth
article has to carefully guard against misinterpretation by a disinterested
audience.

~~~
aje403
I don't think the US belongs next to Mexico on a chart titled Child Poverty.
Considering the 3rd highest upvoted comment on this thread is describing how
cryptocurrency is going to save the American middle class, I don't have much
faith in audiences and I believe the onus is on the author to present the
material properly.

------
ousta
out of curiosity what is the dataviz lib they using?

~~~
strong_silent_t
This may be what you're looking for: [https://github.com/owid/owid-
grapher](https://github.com/owid/owid-grapher)

------
gHosts
Was my searching no good... or have they completely failed to read or address
the panama papers and any of the subsequent leaks?

