
Inequality could be lower than people think - elgfare
https://www.economist.com/leaders/2019/11/28/inequality-could-be-lower-than-you-think
======
riversflow
This is the exact sort of ridiculously contrarian article that made me stop
caring for The Economist.

>If you argue that income has shrunk you also have to claim that four decades’
worth of innovation in goods and services, from mobile phones and video
streaming to cholesterol-lowering statins, have not improved middle-earners’
lives.

I don’t see how the availability of better per dollar technology is an
argument that income hasn’t shrunk. Technology, for the consumer class, comes
out of disposable income. Businesses (and their wealthy owners) are the
biggest financial winners of tech. By a landslide.

What about the lack of(available) durable goods. I live around things that are
older than me, but things made in the last ~30 years haven’t withstood the
test of time so well. That seems like a huge cost I’ve never seen accounted
for.

I don’t see them addressing the rising cost relative to inflation (as best I
can tell) on necessities like food and shelter.

Maybe I’m just dumb and full of myself, but this reads like propaganda. The
argument about pensions is decent but I think most people who care about
economics were already aware of that, and even that is kinda sketch because
the pensions are often managed by ultra-wealthy hedge fund managers who line
their pockets.

~~~
TimPC
The point they are making is that the inflation index doesn't properly account
for increase in quality that these technological innovations are offering. In
fact many measures treat a 1992 cell phone as an interchangeable good with a
2019 state of the art smartphone and in that basket of goods the cost of a
phone has risen substantially. Never mind that the 2014 phone that's free with
a contract can do stuff that in 1992 we didn't even imagine a phone doing.

Similarly, by treating health care as a single good and ignoring all the new
treatments that get introduced we see the cost of healthcare is dramatically
up. But the cost of getting a treatment that didn't exist in the time period
was infinity. Regardless, patient outcomes are better too on a per condition
basis so the treatment quality has gone up too.

I'm not sure many people would take the option to pay a 1970 price for a 1970
standard of health care if they could have that choice now. But the inflation
indices treat 1970 healthcare and 2019 healthcare as almost interchangeable.

For education, my 2nd year undergrad course used a textbook that was a grad
school book at MIT in the 1960's so the material being taught has advanced
too. Again, interchangeable good in the index.

If inflation is wrong, then most measures of inequality are also wrong because
inflation adjusted incomes are wrong.

~~~
riversflow
I can’t afford healthcare at all, but I have to pay for it regardless, either
through fines or insurance. I’d take 1970’s prices and service over today’s if
I could.

Your anecdote about education being better goes absolutely against what I’ve
seen first hand. My parents, who went to College ~40 years ago, paid a
fraction of what people do today even accounting for inflation, and the
quality was far higher. Smaller class sizes and higher standards than today’s
student loan fueled universities, meant that getting a degree was a big deal,
unlike today.

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jdkee
Given that over half a million families file medical bankruptcies in the
United States annually, I find the Economist to lack credibility on the issue.

[https://www.cnbc.com/2019/02/11/this-is-the-real-reason-
most...](https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most-
americans-file-for-bankruptcy.html)

~~~
rayiner
That’s a highly misleading statistic, based on assuming that anyone with
medical debt who declared bankruptcy did so because of the medical debt. In
fact, the rate is much lower:
[https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5865642/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5865642/)

> However, the magnitude of the bankruptcy effect is much smaller than
> previously thought: we estimate that hospitalizations cause only 4% of
> personal bankruptcies among nonelderly U.S. adults, which is an order of
> magnitude smaller than the previous estimates described above.

WaPo’s fact checker gave that statistic three pinnochios:
[https://www.washingtonpost.com/politics/2019/08/28/sanderss-...](https://www.washingtonpost.com/politics/2019/08/28/sanderss-
flawed-statistic-medical-bankruptcies-year/)

~~~
jdkee
Per your NIH citation, you may be correct. FTA, "Overemphasizing “medical
bankruptcies” may distract from understanding the true nature of economic
hardship arising from high-cost health problems."

Healthcare costs have been rising faster than inflation since the 1970s.
Health care consumed 4 percent of income in 1960 compared to 6 percent in
2013.

[https://www.thebalance.com/causes-of-rising-healthcare-
costs...](https://www.thebalance.com/causes-of-rising-healthcare-
costs-4064878)

And are expected to continue doing so into the near term.

[https://www.cms.gov/Research-Statistics-Data-and-
Systems/Sta...](https://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf)

------
scandox
I only encounter two groups of people in my life:

People with more money than they can sanely spend who nonetheless feel
slightly as if they're behind the curve

People who are struggling to make ends meet every day and who are one or two
pay checks (or dole payments) from significant hardship.

There hardly seems to be a middle any more. Nothing is more difficult than to
be of modest financial ambition. I don't know how well graphs can plot this
kind of imbalance.

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neonate
[https://web.archive.org/web/20191129144436/https://www.econo...](https://web.archive.org/web/20191129144436/https://www.economist.com/leaders/2019/11/28/inequality-
could-be-lower-than-you-think)

------
RickJWagner
I live in a single-earner household, with 3 kids and 2 adults in the house.

My oldest son is in college. I really do not see the problem with college
expenses, so long as the student abides by a few guidelines:

\- In the high school years, the student should recognize that their primary
job is to line up scholarships. Nothing beats a good ACT score, and very good
study books can be had at GoodWill for $1.

\- Once at college, eat at the caf. Every. Single. Meal. College kids have no
business eating out.

\- Have a summer job, the primary goal is to make money.

\- Don't use Spotify, NetFlix, etc. No subscription services.

We fund half of what my son's scholarships don't pay, he pays the rest with
summer-job money. It's working so well I expect the other 2 kids to graduate
debt-free as well.

------
saffronique
Its never been this good for so many people.

~~~
Drakim
That's progressively been true over and over again at most points of history
(with various temporary local dips) but that doesn't justify the the status
quo, or vindicate our current system as being acceptable.

Serfs probably had a higher standard of living than cavemen, but that doesn't
mean that the system of nobility and kings ruling over them was objectively
correct, and should be maintained as the one true way to run a society.

~~~
manigandham
I would hesitate jumping to the "justify the status quo" conclusion because of
a truthful comment saying things are better than ever.

The fact that billions have been lifted out of poverty in the last few decades
is an important note and definitely deserves merit.

~~~
Drakim
Maybe I'm being too harsh, but USUALLY when people say that they are silently
implying "so our current system is justified".

~~~
manigandham
Not harshly criticizing something does not mean you are defending it or
completely supportive of it. Assuming this "implication" without any concrete
statements is at the root of most disagreements.

------
temac
Or higher:

[https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...](https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States#/media/File:US_Wealth_Inequality_-
_v2.png)

~~~
redsymbol
What specifically in this graph invalidates a point in the linked article? And
which point?

~~~
WilliamEdward
It directly invalidates the headline. Rich are getting richer whilst poor
remain about the same. Inequality is rising by definition.

It also invalidates a 'specific point' about how the top 0.1% are only earning
about half of the increase people thought they were between the 70's and 2012,
because clearly the graph shows the top 10% is earning MORE than expected, so
they ignored the other 9.9% which seems pretty important. In case you
desperately wanted a specific point.

~~~
appleiigs
The article points out the data/calculations have been re-evaluated with new
adjustments and the conclusions are different than before. It's a bit
nonsensical to try to refute new conclusions by just pointing to the old
conclusions again.

~~~
heavenlyblue
The fact that we have progressed in tech doesn’t mean the equality (that is
defined as a relative measure on some date) hasn’t become lower.

------
charwalker
Yes, maybe. But like saying Climate Change might not be as bad we think, what
does the general population have to lose by working toward alternative energy
sources and technologies or regulations and laws that lead to greater equality
for most people?

