Re: The 'working poor' scam

From: sinister (sinister_at_nospam.invalid)
Date: 06/18/04 

Date: Fri, 18 Jun 2004 11:20:23 GMT

"Grinch" <oldnasty@mindspring.com> wrote in message
news:3jjnc05u608o1qb5mejbhqidbijk8pt8ek@4ax.com...
> On Mon, 07 Jun 2004 10:57:56 GMT, "sinister" <sinister@nospam.invalid>
> wrote:
>
> >"Gordon Gekko" <nospam@nospam.com> wrote in message
> >news:PVqwc.14160$Yd3.4906@newsread3.news.atl.earthlink.net...
> >>
> >> "Sheesh" <passedout@3.am> wrote in message
> >> news:Xns94FF7FD89F0Sheesh@24.94.170.88...
> >> > HHH@hotmail.com (SON OF HARRY HOPE) wrote in
> >> > news:40be3813.17835884@news.sf.sbcglobal.net:
> >> >
> >> > >
> >> > > An absolute majority of the people who were in the bottom 20
percent
> >> > > in income in 1975 have since then also been in the top 20 percent.
> >> > >
> >> >
> >> > What a load of crap.
> >> >
> >> > You don't actually believe that statement do you?
> >>
> >> I believe it, easily. Say a guy graduates high school in 1975 and gets
a
> >> job as a basic laboror. He might be carrying 2x4's for minimum wage.
> >> Eventually, he will become a apprentice, journeyman, and finally
> >professioal
> >> tradesman. He will get a bump in salary each step along the way.
> >> Carpenters, plumbers, electricians, and the like do very well. Right
now,
> >> it would only take like, what, $60,000 or so per year to be in the top
> >20%?
> >> $150,000 is the top 1%, so top 20% should be easily reachable for
someone
> >> who kept at a trade of one sort or another.
> >>
> >> Meanwhile, there are new grads every year moving into the bottom 20%.
> >
> >Yes, but as has been pointed out repeated in this ng, this kind of income
> >mobility (that due to "aging") is uninteresting and should be factored
out
> >of any analysis.
>
> Well, yes indeed, the age factor *should* be "factored out" of the
> quintile numbers when they are presented as evidence of inequality.

Tell that to Glenn Hubbard, who ignored the age effect (despite certainly
knowing better) in order to show a high amount of income mobility.

> But as this would result in a much reduced difference between the
> quintiles that accurately reflects only real difference in lifetime
> income -- and eliminate the exaggeration that results from different
> people with the same lifetime income happening to be at different ages
> -- the class warriors are never interested in doing *that*, eh?
>
> Indeed, we can see why they find the idea "uninteresting". ;-)

No, they often find the data hard to obtain; good longitudinal data on
income mobility are hard to obtain.

> Of course, as has been pointed out repeatedly in this newsgroup, when
> one knows about the age effect the decision to factor it "out of the
> analysis" as if it doesn't exist -- rather than factor it out of the
> numbers to show how it reduces apparent inequality -- is simply
> dishonest.

Depends on how the numbers are presented.

> An *honest* class warrior trying to give an *accurate* picture of a
> welfare distribution that he believes is too wide would say something
> like...
>
> "The income distribution between income quintiles is ... Of course,
> these numbers obviously exaggerate the gap in welfare they imply by
> measuring people with the same lifetime incomes, and thus the same
> welfare, as having major gaps between them by the chance of their age.

But usually these numbers are cast in terms of *changes* in the metric.

> E.g, we should remember that the median family has well above median
> income, firmly into the second quintile, after age 50.
>
> "Also, as others have noted...
> 'A surprising fact is that the income-poor own above average
> wealth... Households that are in the lowest 1 per-cent of the income
> distribution own wealth [...] which puts them in the 85th percentile
> of the wealth distribution. Moreover, the households that are in the
> lowest 1 to 5 percent of the income distribution own wealth [...]
> which puts them in the second quintile of the wealth distribution.
> http://research.mpls.frb.fed.us/research/qr/qr2121.html '
>
> "And we should also remember that consumption is a much better
> indicator of welfare than income -- people earn income to be able to
> consume, of course -- and the 'consumption gap' between the quintiles

More stupid economists. It's reasonable to claim that people across the
bulk of the spectrum of incomes earn income in order to consume. It's not
reasonable for those who've already amassed spectacular wealth---clearly the
drive for more income in those cases is the human propensity to accrue
wealth and power for its own sake.

> is very much smaller than the income gap -- only about 27% as large in
> fact, just one-fourth. And the consumption gap has not been
> increasing as the income.

Tell me, what's the *wealth* gap?

> "So simply using raw income quintile numbers that are unadjusted for
> age (and wealth, and consumption) greatly exaggerates differences in
> welfare -- and welfare is, of course, what we are really talking
> about.
>
> "But I still think these differences in welfare are too damn big ..."
>
> And the next time I hear a class warrior make such an honest
> presentation will be the first.
>
> They sure do unanimously seem to find the notion "uninteresting."
>
>

Relevant Pages

  • USA FALSE PROSPERITY
    ... Present Economy Driven By Consuming Our Accumulated Wealth Not Income ... the consumption of foreign oil and other largely perishable goods. ...
    (soc.culture.cuba)
  • ALL ABOUT THE FALSE PROSPERITY IN THE USA
    ... Present Economy Driven By Consuming Our Accumulated Wealth Not Income ... the consumption of foreign oil and other largely perishable goods. ...
    (soc.culture.cuba)
  • Re: The Condition of the Church in the UK vs USA
    ... Run the spreadsheet, put in inflation, remember to run it to age 95 minimum, 100+ would be safer; with geriatrics, life expectancy is increasing significantly. ... You don't need 50,000 per year, but a chunk of that yearly "income" goes to taxes, and in USA a big chunk goes to medical insurance plus uninsured medical expenses. ... To get a sense of the actual rate, check the changes in price of fuel, which affects just about everything manufactured, grown, or shipped. ...
    (uk.religion.christian)
  • Re: how to compare living standards
    ... direct "change in income relative to the rest of the population". ... same age. ... It's a matter of wealth and then opportunity. ... jim blair Madison Wisconsin USA. ...
    (sci.econ)
  • Re: how to compare living standards
    ... But a class reunion is much less representative than an age cohort, ... school or college or whatever) and if your high school was anything like ... I supposed was to "correct" for the increase in wealth or income that is ...
    (sci.econ)