
The Geography of U.S. Inequality - martgnz
http://www.nytimes.com/interactive/2016/09/06/upshot/up-geo-inequality.html
======
tuna-piano
Some other charts to explore this stuff. But man, economic statistics are hard
- a lot of the fine print can really affect the results (household vs
individual income, labor force participation, etc):

Filter by years to see growth: [http://stateofworkingamerica.org/who-
gains/#/?start=1995&end...](http://stateofworkingamerica.org/who-
gains/#/?start=1995&end=2008)

Job growth by job type:
[http://www.nytimes.com/interactive/2014/06/05/upshot/how-
the...](http://www.nytimes.com/interactive/2014/06/05/upshot/how-the-
recession-reshaped-the-economy-in-255-charts.html)

Income by demographic:
[http://www.nytimes.com/interactive/2015/01/25/upshot/shrinki...](http://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-
middle-class.html?ref=business)

Percentile income distribution:
[http://blogs.wsj.com/economics/2016/07/01/the-99-got-a-
raise...](http://blogs.wsj.com/economics/2016/07/01/the-99-got-a-raise-last-
year-but-not-enough-to-dent-rising-inequality/)

------
clavalle
"In addition to wages, the census includes dividends, rental income and cash
benefits (like Temporary Assistance for Needy Families and unemployment
benefits). But it excludes noncash benefits like food stamps (which benefit
the poor) and capital gains (which tend to benefit the rich)."

This is really a strange way to look at it. It is comparing the 'rich' middle
class to the rest of the middle class and ignoring the extremes.

Whenever a great profit is being made, basic theory says that the market
should work to push things back to normal. When that doesn't happen it is an
indicator that something is off-kilter.

So, what is off-kilter here? What occupations are at the tip of the elephant's
trunk? Why aren't the people riding the elephant's back pushing into that part
of the market? Is it an education problem? A capital allocation problem?
Regulatory capture? This is the question that needs answering.

~~~
rayiner
You're confusing two different things. Theories of markets say that in the
_long term_ competition will drive profits in any given industry to a nominal
level. They don't say that the people who already have capital won't be able
to use that capital to keep riding the wave of large profits in industries
before they hit equilibrium.

~~~
clavalle
The only think I'm confused about is what 'long term' means.

Seems like this has been trending since at least the 80's.

How long does/should the wave of large profits last until we recognize it as a
symptom of a problem?

~~~
rayiner
No theory of markets says that in the long term "profits" in general go to
zero. Just profits in competitive industries. E.g. steel used to be very
profitable. Not so much now. PCs used to be very profitable. Now profits in
the PC industry are nominal. But there are always new industries that haven't
hit that equilibrium yet.

------
anovikov
If the per capita GDP of U.S. grew by 12.4%, how it happened that all classes
of society were worse off in 2014 than in 2000? I don't trust that chart at
all.

~~~
sprafa
The growth of economic indexes is meaningless. The gains are going massively
onto the people who already own capital. That's the engine of inequality.

Also... You don't "trust" that chart? You can probably calculate it yourself
if you want. That chart is data. If you have any reasonable arguments against
the accuracy of that data Id love to hear it.

~~~
yummyfajitas
Not trusting a chart because it's numbers seem to contradict other numbers is
perfectly valid and reasonable. Your comment about gains going to people who
own capital (who, incidentally, are primarily middle class homeowners) is not
a refutation of it. In fact, it's completely irrelevant.

A refutation would be explaining why GDP and income don't necessarily
correlate, which is more a matter of accounting identities. Specifically, GDP
!= income, income is merely one component of it.

~~~
antisthenes
The wage share in the United States has been consistently falling from ~64% to
about 57% now. (as a % of GDP)

It's quite easy to see that even if GDP grew 12% as someone else mentioned,
the change from 64% to 57% would keep incomes at approximately the same level
(and perhaps even slightly lower).

~~~
anovikov
Income is not just wage. Total personal income is about 80% of GDP and that
figure doesn't change much over time.

~~~
antisthenes
[https://fred.stlouisfed.org/series/PRS84006173#0](https://fred.stlouisfed.org/series/PRS84006173#0)

Wage share is an economically accepted term, with data from BLS behind it.

You literally made up some number and said "it doesn't change much over time".

You're going to need to provide a source for that 80%.

~~~
anovikov
Easily. Personal income was 15737.7 billion in 2015

[http://www.bea.gov/newsreleases/national/pi/2016/pdf/pi0716....](http://www.bea.gov/newsreleases/national/pi/2016/pdf/pi0716.pdf)

and GDP in current dollars was 18036.6 billion -
[http://www.bea.gov/national/xls/gdplev.xls](http://www.bea.gov/national/xls/gdplev.xls),
so 87.5% of GDP was income, and that figure has been pretty much constant over
last 50 years, at never out of 75-90% range for sure. In fact, it is higher
than average in the last 10 years or so - while difference is really small.

Disposable income after all taxes and including all social transfers
(excluding non-monetary ones like food stamps and assisted housing) was 69.5%
of the GDP, also quite typical figure which shows to tendency to fall over
time, more likely to rise.

Surely that includes dividends, rents, and realized capital gains. And yet, it
must have been reflected in the chart in question, if only in the top decile -
while chart somehow shows incomes of all deciles falling from 2000, which is
hard to believe.

------
ap22213
I find these type of posts on HN to be curious things. Clearly, there's lots
of interest in the subject and desire to change things. And, most HN readers
are highly educated and many are even high-income (i.e. have position to
affect real change). But, I never see posts advertising ways to take real
action.

I love you guys, but making your cohorts know that you're aware and
sympathetic of the cause only feels good. Let's see some posts that help
organize and activate. Let's set some achievable, tangible goals and do
something.

~~~
Bartweiss
I can appreciate the general sentiment, but at least for this post
specifically I'm not sure I agree.

The subtle aspects of these two charts are _really_ interesting. Like, the
only non-rich group to see income gains in the US is the ~15th percentile
group? That's striking, and deserves some consideration. (At a guess, EITC and
Clinton's work-for-benefits programs have helped the employed-near-minimum-
wage cohort, but not the very poor.) The 2000-2014 numbers are similarly
interesting - we see that the ~90th percentile (e.g. surgeons) was insulated
from the crash better than the middle class _or_ the very rich, but that the
very rich have rebounded completely.

So yes, signaling is different from actual action, but I'm filing this one
under 'education'. For me at least, I'm interested more by the subtleties than
by the basic restatement of "this is an issue".

------
Klockan
Income inequality will continue to grow as technology lets us produce
tremendous amounts of value with comparably small amounts of employees. Said
value is often not accounted for in graphs like these so we can't really know
if people are better off today than 20 years ago. I mean, would you rather
live today with cheap internet, awesome computer and more free content on the
internet than you can ever consume or would you want to live without those
things with 10% higher inflation adjusted wage 20 years ago? I know what I
would choose, hence I would say that the middle class has gained a lot.

The nice things about those things is that they are wealth agnostic as well.
Bill Gates doesn't have better internet than me, nor does he have a better
personal computer, better youtube, better facebook, better internet search
etc. All of those are extremely valuable and are spread evenly between almost
everyone in the west.

------
protomyth
"In North Dakota, in the heart of shale mining country, it made everyone
richer."

Well, mostly on the western side of the state, but that was the poorer side to
begin with. It did make for some problems with some folks on fixed incomes.

------
dsfyu404ed
Well, the glass half full is that California's drought will soon be fixed by
the tears of everyone in SV who's upset that, despite all their, intelligence,
big data and economic prodding by the government, the middle class in those
"backwards, flyover states" did better.

On a more serious note, the pattern I saw here was coastline = bad.

------
astazangasta
Can we talk about what a fucking terrible visualization the elephant chart is?
We often note how useless "fastest growing" is, because it is easy to get
large changes when you have a small denominator. So income can grow worldwide
for the bottom by 100% and only add a few dollars to their wealth. Meanwhile
the top 1℅ might add 25% to their income at millions of dollars.

This is a chart designed to make us feel good about poor people getting a
pittance. Meanwhile the top 100 people in the world have more wealth than the
bottom fifty percent. We need growth of tens of thousands of percent at the
bottom for decades to move forward.

~~~
harryh
Someone living on $2/day (the generally accepted figure for extreme poverty)
is living on about $730 per year. A single year of 10,000% growth would get
that person to an annual income of $73,000 which would be well into the global
1%.

Annual growth of 10,000% for even a single decade would give that person an
annual income of:

$73,000,000,000,000,000,000,000

That's 73 sextillion dollars. For reference Gross World Product is around 100
trillion.

I think you're setting the bar a little high!

~~~
astazangasta
Yeah, I didn't think that out very carefully, obviously exponential growth at
any substantial rate would have that kind of effect. The perils of composing
text in the loo. My main point still stands, though...

~~~
harryh
I don't think it does to be honest. Income growth for the world's poorest has
been astonishing over the last several decades. The gains are very real and
very meaningful.

~~~
astazangasta
In what terms are they "very meaningful"? There are still hundreds of millions
of people living in slums in cities around the world; if these people now
survive on $2 instead of $1, why is this "very meaningful"?

~~~
Klockan
What are you talking about? The difference between $2 and $1 is extremely
meaningful. $1 a day means that you can barely afford enough rice to survive,
at $2 you can start diversify your food and maybe save up for better clothes.

------
readhn
Rich getting richer and poor getting poorer. This is ultimately the goal of
the modern capitalist system.

We can talk all we want but we are all disposable material, unless we own the
business we work for.

How many people in this country ( middle class included) are 3-6 months away
from being on the street if job suddenly disappeared?

~~~
tuna-piano
A - The "capitalist system", much like evolution, does not have goals.
Capitalism is just people trading with each other. The USA has had a similar
system for hundreds of years, where the rich have gotten richer, but the poor
have also gotten richer. So blaming capitalism itself is not a good answer.
What has changed within capitalism to make the results from 1776 - 1990
different from 1990 - 2014? Either this is just a temporary decrease for the
bottom percentiles, or there are other factors that have caused this shift
(globalization, technology, government policies, personal choices, etc).

B - Do you really want to own the business you work for? If you work at a
chocolate factory, and own the chocolate factory - your entire livelyhood is
tied to that chocolate factory. If the company goes under, you lose your job
and your savings. Wouldn't you rather own bits and pieces of many other
companies, to share in their success?

But regardless, I believe your point is that it sucks not having savings /
capital. Obviously true - but how do you propose people get savings / capital?
Confiscate capital from the rich to give to the poor?

~~~
natrius
Capitalism is not just people trading with each other. We invented lots of
legal fictions to get where we are today, and they're pretty effective. For
instance, if you contribute your capital to a corporation, you'll be rewarded
with an agreed upon portion of the corporations dividends. It looks like the
company is rewarding you, but it's really society. We create and enforce rules
like these—private property, limited liability, etc.—because they make us more
prosperous. But they're artificial. They're not laws of nature. They can have
flaws.

~~~
arethuza
"limited liability"

I think people forget how big a deal this is - people who don't have it (e.g.
old fashioned "joint and several liability" partnerships) can be in for a
whole world of misery.

I remember hearing a BBC Radio 4 program a few years back on a financial
disaster where a bank was both mutual and didn't have limited liability and
collapsed, that was a disaster for anyone who had deposits at the bank (no
matter how small).

