American Middle-Class Malaise

[TommiR]

A lot has been written about the decline of the American middle class in the wake of the recent economic downturn. The Huffington Post has conducted an analysis of the trends, and the reading is not very positive.

What do you guys think? Is this simply a temporary state of affairs, likely to correct itself once things get back on track? Or is the decline of the American middle class a longer-term reality, where the pillars upon which their prosperity and standard of living once rested are no longer sustainable in today's world?

 

[GasBandit]

That's an excellent example of how infographics are misleading and statistics can be cherry picked. Take for example, their quotation on how the US used to be first in per capita GDP and now it's 12th.

That may be correct, but it's disingenuous to present that information in that manner and only that manner. What they're not showing you is this -

- data showing that the US's GDP, abarring the Huffington Post's so-called "great recession," is pretty much rising at the same trend it has since the 70s - it is rather that other nations have experienced a sudden burst in the last decade after years of stagnation.

This isn't to say there aren't issues with the US economy, of course. But to use such thinly-veiled selective omission tells me that HuffPo was more interested in clickbait and agitation than information.

 

[TommiR]

At the risk of sounding strawman-y, I gather from your reply that you refute their findings on the grounds of cherry-picking, and in your opinion there is nothing substantially wrong with the situation of the American middle class?

 

[GasBandit]

At the risk of sounding strawman-y, I gather from your reply that you refute their findings on the grounds of cherry-picking, and in your opinion there is nothing substantially wrong with the situation of the American middle class?

This isn't to say there aren't issues with the US economy, of course. But to use such thinly-veiled selective omission tells me that HuffPo was more interested in clickbait and agitation than information.

 

[GasBandit]

Or let me put it another way - since I very quickly and with minimal effort was able to show that the article's intent was to agitate and not inform, I choose not to absorb the rest of the information in the article because it would require a whole lot of homework and fact-checking on my part that I don't have the time or patience for. Anyone with open eyes can see the middle class is having a rough time, but to the exact, documented degree, I can no longer trust this source to be accurate and impartial. They're trying to spin an angle, and I can't say what the extent of the spin is.

 

[Hailey Knight]

This might be a strawman, so let's straw, man.

 

[Tress]

The distribution of wealth in the country is reverting back to levels not seen since America's Gilded Age (late 19th-early 20th century). It was unsustainable then, just as it is now.

The only question in my mind is how quickly the change will come to break the dam. Slow means reforms and steady improvement, whereas fast is some kind revolution or uprising.

I know which of those two I prefer.

 

[TommiR]

Or let me put it another way - since I very quickly and with minimal effort was able to show that the article's intent was to agitate and not inform, I choose not to absorb the rest of the information in the article because it would require a whole lot of homework and fact-checking on my part that I don't have the time or patience for. Anyone with open eyes can see the middle class is having a rough time, but to the exact, documented degree, I can no longer trust this source to be accurate and impartial. They're trying to spin an angle, and I can't say what the extent of the spin is.

I doubt your graph was much more than further indication that the relative position of the United States has declined over the past decade, but okay.

The distribution of wealth in the country is reverting back to levels not seen since America's Gilded Age (late 19th-early 20th century). It was unsustainable then, just as it is now.

The only question in my mind is how quickly the change will come to break the dam. Slow means reforms and steady improvement, whereas fast is some kind revolution or uprising.

I know which of those two I prefer.

I think the issue of wealth distribution that you point out is one that many see as the biggest problem in the situation. What may complicate the matter is that many of the industries that once might have required managers, clerks, and other members of the middle classes in large numbers to run are being outsourced to other countries that feature lower costs, a more lax regulatory climate, or other attractive business realities vis-a-vis the US system, and the jobs that are created in their place tend to be on the lower end of the pay scale. And in my view it is very much the loss of middle-class jobs, not so much corporate profits or huge wage increases for the top or their stock options, which is the most significant cause of the current hardship.

I must say I am somewhat more pessimistic about the change that you see coming. The way it appears to me is that elections in the US are quite often heavily influenced by who can throw more money at campaigning, and as that money tends to come primarily from business interests, I imagine their views will continue to be well represented in political decision making. And even if you did manage to change the politicians, one way or the other, the underlying economic factors that caused the current situation will likely prove more difficult to tackle.

 

[PatrThom]

I think the issue of wealth distribution that you point out is one that many see as the biggest problem in the situation.

There's a couple of breakwater points at the mean and the median wealth, with a percentage of the population either above or below those lines. Presumably, the line drawn at the mean wealth is always going to be higher than the median wealth (otherwise there can be no "upper" class), but as these two lines move farther apart, the quantity of unhappy people will increase. This is because the further these two move apart, the more likely it is that these numbers are being thrown off by outliers who have a disproportionately large share of the pie, i.e. logarithmic curve instead of straight line.

I see the "middle" class as being the most affected by those lines. The poor are always drowning deep in their debt, and the rich always have their heads safely above water, so it is the middle class that is constantly being buffeted by the economy's waves. I have enough. Wait now I don't. Ok we're good again. Aw crap there goes the washing machine. And so on.

The distribution of wealth in the country [...] was unsustainable [in the late 19th-early 20th century], just as it is now.
The only question in my mind is how quickly the change will come to break the dam. Slow means reforms and steady improvement, whereas fast is some kind revolution or uprising.
I know which of those two I prefer.

I'm of a similar opinion. Those wealth-hoarding individuals can't be permitted to continue stockpiling the nation's wealth*. Doing so just constipates the economy. Their accumulated wealth can be released back into society in several ways: Through charity, outright assassination/theft, government intervention/taxes, exhaustion, obsolescence, or other means. It would be best for society as a whole if this was done in a steady, controlled manner to equalize the pressure gradually, since the likelihood that our future will end up being one of turmoil and upheaval increases as that gap grows wider. This is a thing which is so blatantly and painfully obvious that I marvel daily that something isn't already being done about it to head off that inevitability.

--Patrick
*i.e., those who increase their wealth primarily through the labors of others.

 

[Bowielee]

As most of you know, I'm a bleeding heart liberal, but even I know that the Huffington post is a left wing slanted rag.

As to the actual question posed by the post, I think the bigger issue to look at would be the dissolution of the middle class, rather than their actual income.

 

[TommiR]

There's a couple of breakwater points at the mean and the median wealth, with a percentage of the population either above or below those lines. Presumably, the line drawn at the mean wealth is always going to be higher than the median wealth (otherwise there can be no "upper" class), but as these two lines move farther apart, the quantity of unhappy people will increase. This is because the further these two move apart, the more likely it is that these numbers are being thrown off by outliers who have a disproportionately large share of the pie, i.e. logarithmic curve instead of straight line.

I see the "middle" class as being the most affected by those lines. The poor are always drowning deep in their debt, and the rich always have their heads safely above water, so it is the middle class that is constantly being buffeted by the economy's waves. I have enough. Wait now I don't. Ok we're good again. Aw crap there goes the washing machine. And so on.

Agreed for the most part. But I think the traditional view of the middle class includes some savings, to tide the middleclassperson over a rainy day. Certainly not enough to cover extended periods of unemployment, and the inadequacy of any such financial buffer savings that the middle classes have to prevent them from being buffeted about by the shifting winds of economy, might be taken as additional evidence that the traditional underpinnings of middle class prosperity are no longer as supportable in today's world as they might have been in the world of yesteryears.

I'm of a similar opinion. Those wealth-hoarding individuals can't be permitted to continue stockpiling the nation's wealth*. Doing so just constipates the economy. Their accumulated wealth can be released back into society in several ways: Through charity, outright assassination/theft, government intervention/taxes, exhaustion, obsolescence, or other means. It would be best for society as a whole if this was done in a steady, controlled manner to equalize the pressure gradually, since the likelihood that our future will end up being one of turmoil and upheaval increases as that gap grows wider. This is a thing which is so blatantly and painfully obvious that I marvel daily that something isn't already being done about it to head off that inevitability.

I'm not sure stockpiling is the best word to use, since I think wealth today is mostly ones and zeroes that tend to get cycled back into the economy no matter what, instead of a pile of gold coins lying unused in a medieval king's basement. I think one of the most significant parts of your other means category is investment, where those with surplus liquid assets voluntarily transfer them to sectors where there is a deficit to be used as capital, in expectation of future gain. Or if they use their wealth to buy something, then the money flows back into the economy. Even if they kept the money sitting on their bank accounts, the banks would still inject it into the economy through lending. So I'm not sure there is a need for coercion.

One of the problems from any single nation's perspective may be that there is competition for that cash. International investments are commonplace today, and international financiers routinely transfer billions across borders at the click of a mouse. The direction of that money flow tends to be based on business concerns, and not so much on political, social, or moral issues. Influencing those monies to flow your way by encouraging private investment through suitable means, including tax relief, might altogether be a more effective approach than coercion.

 

[Bowielee]

I live well below the poverty line, but don't consider myself drowning in debt. Well, technically I am NOW because of my student loans, but prior to that I was completely living within my means making under 20K per year. I do live in an area with a lower cost of living, though, so that becomes a factor as well.

I think one of the biggest problems we have with defining our financial strata is that there are multiple issues that need to be taken into consideration other than just flat out income.

For example: Where I live, making 50k per year (the median income for middle class) pretty much gives you an extremely comfortable lifestyle with the ability to easily buy a home, hell, even get sports and recreational vehicles purchased not on credit.

Take that same income and apply it to someone living in a more urban area where rent and utilities are double what they are here and the idea that they're living comfortably is almost laughable.

I think, as with most issues, we tend to paint this with too broad a brush.

 

[Tress]

I know what you mean; 50k around here is just barely scraping by. Then again, average wages are higher, but not enough to offset the costs for many people.

 

[Cheesy1]

I know what you mean; 50k around here is just barely scraping by. Then again, average wages are higher, but not enough to offset the costs for many people.

One of the reasons why after I graduated I got the fuck out of the bay area as soon as I could. Besides the fact the dot com bubble had just burst, so there were no jobs anyway at the time. But the cost of living was insane, I was barely able to pay my part of a two-bedroom ghetto apartment split between five people.

 

[drawn_inward]

How much of this malaise is caused by the middle-class itself? As in folks living beyond their means and not giving up stuff they don't need (cable tv; internet; etc).

 

[Krisken]

Why does that look like "Accept they are no longer middle class" to me?

 

[Chad Sexington]

A lot has been written about the decline of the American middle class in the wake of the recent economic downturn. The Huffington Post has conducted an analysis of the trends, and the reading is not very positive.

As most of you know, I'm a bleeding heart liberal, but even I know that the Huffington post is a left wing slanted rag.

To paraphrase David Angelo, "maybe you'd like to a more centrist publication, like the Communist Manifesto."

I have more than just glib remarks to add to this, but it will take me time I can't invest right now. Will try to return.

 

[Bubble181]

We have to factor into account the standard of living of the "middle class" has increased by leaps and bounds, as well. There's this sort of general unhappiness with your level/status being continuously exploited by media/marketing to make you feel like you don't have everything you should have. I know plenty of people around here who consider themselves to be "just scraping by" because they can only take one holiday abroad instead of two these days (mind that going "abroad" is a slightly smaller thing in Belgiul than in the US, of course - the stereotypical "two vacations a year" everyone's supposed to have here are a skiing trip in Austria/Swiss/France and a summer vacation to Turkey/Egypt/Greece/Italy.). There's an image of the "average" person created by the media no-one can live up to - a new car every two to five years (or two!), a new cellphone every year, two trips, staying in season with fashion, sees all the latest movies, buys all brand articles, has a jacuzzi or swimming pool,...), follows all national sports,...
Everyone not living up to that ideal feels like they are on the lower end of middle class, which is nonsense. The middle class in the 1950s or 1970s wasn't made up of people being able to afford everything either; it was people "just barely getting by". Maybe eating meat most days, maybe going to the sea for a week camping. Most of the "malaise" of the middle class comes from everyone having become "consumers" instead of "workers".

 

[PatrThom]

I'm not sure stockpiling is the best word to use, since I think wealth today is mostly ones and zeroes that tend to get cycled back into the economy no matter what, instead of a pile of gold coins lying unused in a medieval king's basement. I think one of the most significant parts of your other means category is investment, where those with surplus liquid assets voluntarily transfer them to sectors where there is a deficit to be used as capital, in expectation of future gain. Or if they use their wealth to buy something, then the money flows back into the economy. Even if they kept the money sitting on their bank accounts, the banks would still inject it into the economy through lending. So I'm not sure there is a need for coercion.

"Investment" is, by definition, a bit like fishing, or making rock candy. You put some of your own money out there in the hopes that other money will stick to it to be collected (harvested?) later. This "for-profit" mechanic generates a sort of economic pressure which drives wealth from (many) lower tiers into (fewer) upper tiers. The lender is gambling on not losing his investment, the borrower is gambling that future expansion/profit/whatever will be sufficient to make up for the short-term loss of whatever premium the lender is charging. Either way, wealth ultimately moves upwards. The only way to really relieve this "pressure" is for the higher-ups to infuse a bunch of wealth down into the lower tiers without any sort of compensation. Otherwise the inequality just continues to build until that pressure becomes severe enough that some form of "correction" occurs.

--Patrick

 

[TommiR]

I live well below the poverty line, but don't consider myself drowning in debt. Well, technically I am NOW because of my student loans, but prior to that I was completely living within my means making under 20K per year. I do live in an area with a lower cost of living, though, so that becomes a factor as well.

I think one of the biggest problems we have with defining our financial strata is that there are multiple issues that need to be taken into consideration other than just flat out income.

...

I think, as with most issues, we tend to paint this with too broad a brush.

There are other factors to be sure, but I think flat-out income is one of the biggies. While there are certainly regional (and individual) differences in what constitutes an acceptable income level to cover the cost of living, if one were to try and get a picture of how the American middle-class was faring in general, one may need to look at things on the scale of the entire country. One useful metric might be taking US household median income and adjusting it for inflation, which will result in graphs like this and this.

How much of this malaise is caused by the middle-class itself? As in folks living beyond their means and not giving up stuff they don't need (cable tv; internet; etc).

Cheap credit financing a middle-class standard of living for lower-class income levels is my guess. The true middle class seems to be growing smaller and smaller.

To paraphrase David Angelo, "maybe you'd like to a more centrist publication, like the Communist Manifesto."

I have more than just glib remarks to add to this, but it will take me time I can't invest right now. Will try to return.

It's really more about the message than the messenger IMHO. But if the packaging is too distracting for people to pay attention to what's inside, similar reports regarding how the middle class is faring can be made available from other, presumably more reputable sources.

We have to factor into account the standard of living of the "middle class" has increased by leaps and bounds, as well. There's this sort of general unhappiness with your level/status being continuously exploited by media/marketing to make you feel like you don't have everything you should have.

You sound suspiciously much like a dirty downshifter.

Seriously though, most people wish to strive for something better. Everyone wants to get a raise every now and then (which is not eaten up by inflation), move on to better paying jobs and so on. So most people have more discretionary funds at their disposal the more time goes by, and they use those funds to better their lives, as they understand it. Technology and productivity improve in every sector, bringing things to within reach of the common man that were way beyond his capabilities mere decades ago. The net result is that we have a lot more options than people in the fifties, who have more options than the people in the beginning of last century, and so on. And we make use of those options.

Most of the "malaise" of the middle class comes from everyone having become "consumers" instead of "workers".

Well yeah, people use the earnings from their job to either buy stuff, or to save (invest) it. Unless you meant some philosophical shift in how people see themselves/are viewed, I think the two pretty much go together as the spending habits of unemployed or poor people tend to focus towards the essentials (at least I hope they do). Consumers, yeah, but ones whose voice is not very well heard in the marketplace.

"Investment" is, by definition, a bit like fishing, or making rock candy. You put some of your own money out there in the hopes that other money will stick to it to be collected (harvested?) later. This "for-profit" mechanic generates a sort of economic pressure which drives wealth from (many) lower tiers into (fewer) upper tiers. The lender is gambling on not losing his investment, the borrower is gambling that future expansion/profit/whatever will be sufficient to make up for the short-term loss of whatever premium the lender is charging. Either way, wealth ultimately moves upwards. The only way to really relieve this "pressure" is for the higher-ups to infuse a bunch of wealth down into the lower tiers without any sort of compensation. Otherwise the inequality just continues to build until that pressure becomes severe enough that some form of "correction" occurs.

Hmm. Money that gets injected back into the economy through whatever means provides capital for companies to run their operations. In turn, those companies hire people to run their operations and pay them wages, with which the people go out and buy stuff. As long as increase in wages tops inflation and not too many people are out of work, I'm not sure why everyone (not literally of course) should not be happy enough. There is always some amount of internal tension in any society, but it mostly remains and has remained in check in first-world countries, unless widespread actual social ills exist in the country to add fuel to the fire. In the absence of such, I'm not sure the "correction" that you speak of needs to necessarily occur.

 

[PatrThom]

I'm not sure the "correction" that you speak of needs to necessarily occur.

That really depends on the mentality of the wealthy entities involved. IF the only time anyone is willing to front capital is when there's money to be made from doing so (that whole "for-profit" mentality--a bank is ultimately not in the business of lending money, they are in the business of creating debt) THEN that economic flow I mention earlier will continue to only flow in one direction (when it flows at all), and that is from those with less towards tthose with more. Hence, "stockpiling" occurs as a result. This is fundamentally unsustainable and a correction of some sort must eventually occur.

If you can imagine an economy as being represented by the water cycle, there's only so much water that can be evaporated from the surface before some of it starts falling back to Earth. If something upsets this cycle and inhibits or even prevents this return (global warming, CO2, whatever), then this cycle slows down as there is less and less water to evaporate. Insisting that something must be wrong with the dirt since it isn't giving up as much moisture as it used to blindly ignores the fact that it hasn't rained.

It is expected that there will be occasional and unavoidable scattered "showers" as wealthy individuals die, or small businesses go under, or the like, and if small events like this happen frequently enough, then wealth will be returned to the lower tiers often enough that there will be no ill effects to the system as a whole. But if the number of incredibly wealthy entities is very small (e.g., due to consolidation), or the time between these events is very long (e.g., wealth held by semi-immortal corporations rather than by individuals), then droughts become very severe and very painful for anyone who does not live amongst the clouds. As the number of people who have a problem with this rises while the number of people who don't falls, eventually there will come a point where the larger group will feel sufficient confidence and/or justification that some sort of coercion/correction will occur, whether it be through politics, protest, or piracy.

--Patrick

 

[GasBandit]

All you Morloks quit making all that racket, you're making it hard for my Eloi to lay around having sex all day.

 

[PatrThom]

All you Morloks quit making all that racket, you're making it hard for my Eloi to lay around having sex all day.

the nation's wealth

I just want to clarify that when I say it's the nation's wealth, I mean that it was created by a bunch of people, and that a substantial portion of it should go back to the nation as a whole. I'm sure that when our ancestors started clumping together back in days of yore, the reason they did so was probably because of the mutual benefit it conferred, and not because a bunch of folks thought, "Hey! Thag over there is a really great guy. A few dozen of us should get together and each give him 80% of our income!" I mean, Thag might make some of the best spear points in the whole valley, and he should definitely be rewarded for doing so, but if Thag is just take, take, take, and no give, Thag might start to get some of his spear points back, if you know what I mean...especially if he is draining so many resources from everyone else that they have trouble functioning. Keep in mind that this dynamic will probably occur regardless of whether Thag is doing this on purpose or not.

I know it may be obvious to some people, but a healthy economy isn't one where everyone has a lot, a healthy economy is one where everyone does a lot of commerce*. It's this flow of wealth that is important, and when it slows/stops, everyone suffers.

--Patrick
*EDIT: 2024 PatrThom here, clarifying that when I say, "does a lot of commerce/transactions," I specifically mean transactions that are "wide" and not "tall." That is to say, an economy where transactions have to go through large numbers of middlemen may look healthy (due to the overall high volume of transactions), but that health is being, well, inflated because it's really only one "sale," so to speak, just with lots of extra steps. Increasing the number of middlemen doesn't really add value to an economy UNLESS they are adding some necessary service into the equation such as transport/distribution, food preparation, assembly, etc.

 

[Eriol]

Saw this on the weekend:



Middle class may already be gone by many real measures. This also visually demonstrates it quite well.

The thing missing here is that the "socialism" one should be about 1/2 to even less of the stack there. People without incentives really don't do as well IMO. There is a limit however, which is why the extreme of reality there is also unjust by many measures IMO.

(FYI: I'll never use the word "unfair" as equivalent to "unjust" which is why I bolded it above)

 

[Chad Sexington]

Saw this on the weekend:



Middle class may already be gone by many real measures. This also visually demonstrates it quite well.

The thing missing here is that the "socialism" one should be about 1/2 to even less of the stack there. People without incentives really don't do as well IMO. There is a limit however, which is why the extreme of reality there is also unjust by many measures IMO.

(FYI: I'll never use the word "unfair" as equivalent to "unjust" which is why I bolded it above)

There are three kinds of untruths: Lies, damned lies, and statistics.

The study he refers to by a 'Harvard business professor and economist'... is by two PhD's - neither one is an economist. One, Dan Ariely, who is not from Harvard but Duke, has a PhD in Business Administration, and a PhD in Cognitive Psychology. The other, Michael Norton, who is an adjunct professor at Harvard, has a PhD in Psychology. So first off, he's either wrong or lying.

That's so dripping with agenda. Look at the way he talks, "...Not the lowest-paid employee, not the janitor, [emphasis mine]" he says. Uhm... Janitorial staff often get paid better than frontline reception/sales staff because no one wants to do those jobs, but yes, make sure you paint an image that fits with your lie agenda..

The study says that Americans prefer a country like Sweden, whose graph is more like the suggested 'ideal' from the survey. Oh, hang on, what is this footnote? "2. We used Sweden's income rather than wealth distribution because it provided a clearer example to constrast to the other two wealth distribution examples [that is to say, 20-even across all five, and actual wealth distribution in America]; although more equal than the United States' wealth distribution, Sweden's wealth distribution is still extremely top heavy."

So, we used a different number, to get the result we wanted, because it turns out socialist countries also have, and I am quoting here, "extremely" top heavy wealth distribution.

Read the study, follow the sources, ask what do they want to be true?

Also, a dry rebuttal:
[DOUBLEPOST=1385495495,1385495393][/DOUBLEPOST]Oh, and the "IT DOESN'T EVEN FIT ON THE GRAPH"

Where did you learn to make graphs, you fucking idiot, change your scale -- oh, I'm sorry, you were trying to make us blargh rage kill the rich

 

[drawn_inward]

I see malaise and I immediately think mayonnaise and then I think ham and cheese and a dill pickle spear.

Statistically, the middle class eat more mayo sandwiches per capita than upper class folks.

 

[Necronic]

If you want a really interesting view of how things are now compared to how they were back in the day then you need to get it from the horses mouth. I recently picked up Upton Sinclair's "I Candidate for Governor" to read it. I didn't make it far, but it was remarkable listening to him talk about the growing divides between the rich and the poor and the disappearing middle class. It sounded like something straight out of HuffPo.

I think that there are some strange new issues today, that are truly contemporary, like the super-rich or the over-educated barristas, but I don't think that the middle class is really in that bad a shape. True, you need a college degree, preferably technical, to have any assurances of getting there, but its still accessible.

These days are not that all uncommon historically, truly the really strange days were the so-called golden-years of the 50s and 60s. But those only existed as a fallout from a world war that we came through mostly unscathed, and the birth of the Cold War's military industrial complex that was, at least for the time being, mostly up-side.

 

[Eriol]

Chad,

Yes there are issues with the people who gathered the data. Fine. But if the numbers hold up, the point still stands. And ideal income vs wealth. Yes that's something weird. Fine. But again, doesn't invalidate the underlying point of the original video. The number from the 1970s is especially telling (average income of CEO vs worker), in that those are by percentage numbers, not absolute ones, and they're about income. So what if the Janitor isn't the lowest paid. That actually makes the point better, as culturally, we believe cleaning people make crap (as well as clean it up). Either way, the point stands.

And I read the "rebuttal" video. And? People with more income pay more taxes. Most know that. The original video is about actual wealth per person. And the lowest brackets getting income from the government instead of paying taxes? Umm, duh. That's what the welfare state does. Those who don't have as much need more from the government. Maybe if they had more of their own (ie: less poor people) they would need less to be redistributed from the government? Maybe there's an idea. The current swiss idea of limiting pay to a multiple of that of the lowest paid worker in your company is an interesting one (it failed the vote), and probably has some flaws, but I do think it's on the right track.

 

[PatrThom]

limiting pay to a multiple of that of the lowest paid worker in your company is an interesting one (it failed the vote), and probably has some flaws, but I do think it's on the right track.

I wonder if a better one mightn't be to compel you to spend at least a minimum percentage of your income every year. Life expenses and the like would count against this total, of course.

--Patrick

 

[@Li3n]

There are three kinds of untruths: Lies, damned lies, and statistics.

That's hilarious considering the video you posted...

And no, statistics are fine, the problem is that most people don't seem to understand them, at all...

 

[Chad Sexington]

That's hilarious considering the video you posted...

And no, statistics are fine, the problem is that most people don't seem to understand them, at all...

I felt the video was merely illustrative of that statement, not ignorant of it. Study stats for a while and you realise you can basically plug in a formula to get the number you want if you don't get it the first time. Statistics are useful, and some people don't understand them, but if you're deliberately using that ignorance to make your stats look a certain way, then you're a liar.

Chad,

Yes there are issues with the people who gathered the data. Fine.

But the issue isn't really with who gathered the data, whether they may be biased or not, but that the fellow making the video says the study was done by 'a Harvard business professor and economist' which is simply not true, and a fact I discovered in less than five minutes.

But if the numbers hold up, the point still stands.

I am suspicious that they do hold up, upon reading the study.

And ideal income vs wealth. Yes that's something weird. Fine. But again, doesn't invalidate the underlying point of the original video.

I think it's more than 'weird', I think it's intentionally misleading, since they footnote literally points out that the wealth distribution number for Sweden didn't fit the data they wanted to show - i.e.: the study was about confirming beliefs, not informing people about wealth distribution. Additionally, I think we disagree about would invalidate the video. I made no claim as to whether or not the point is right/good/reasonable - I simply feel that the video is extremely dishonest to make its point, and the study itself (which he doesn't link to in his references, but to a blog post by one of the study's authors, from which you can find the study), is not useful in its data. To me, these factors invalidate the video. Suppose we successfully established a viral video claiming cocaine use will cause massive irreparable brain damage after 2 uses in the average person. This may result in fewer people using cocaine, but is lying to people to do something 'good' okay? It's an ethical issue, I suppose, and I see it as wrong, but you may not; such is the nature of disagreements like these.

The number from the 1970s is especially telling (average income of CEO vs worker), in that those are by percentage numbers, not absolute ones, and they're about income. So what if the Janitor isn't the lowest paid. That actually makes the point better, as culturally, we believe cleaning people make crap (as well as clean it up). Either way, the point stands.

I might have to re-watch this part; I was mostly annoyed with the disdainful way he seem to group the janitor.

And I read the "rebuttal" video. And? People with more income pay more taxes. Most know that. The original video is about actual wealth per person. And the lowest brackets getting income from the government instead of paying taxes? Umm, duh. That's what the welfare state does. Those who don't have as much need more from the government. Maybe if they had more of their own (ie: less poor people) they would need less to be redistributed from the government? Maybe there's an idea. The current swiss idea of limiting pay to a multiple of that of the lowest paid worker in your company is an interesting one (it failed the vote), and probably has some flaws, but I do think it's on the right track.

I meant to illustrate that one can demonstrate the stats on the flip side of the coin and see an apparent opposite but simultaneous truth, which is that the tax burden is 'disproportionately' on the wealthy already.

As to the limiting pay thing; I am suspect of that working. Either the CEO would just move his HQ to a country that would let him earn what he likes, (which would imply unemployment for the people currently working there), or he would elevate the income of his lowest paid worker to keep his high salary, but that would mean he could afford fewer workers, implying again, unemployment.

 

[GasBandit]

As to the limiting pay thing; I am suspect of that working. Either the CEO would just move his HQ to a country that would let him earn what he likes, (which would imply unemployment for the people currently working there), or he would elevate the income of his lowest paid worker to keep his high salary, but that would mean he could afford fewer workers, implying again, unemployment.

I brought that up once on this forum too, and folks pointed out that this would simply fracture operations into multiple "companies," with the high earners in one, and that company "contracting" the other company where the low earners are.

 

[Chad Sexington]

I brought that up once on this forum too, and folks pointed out that this would simply fracture operations into multiple "companies," with the high earners in one, and that company "contracting" the other company where the low earners are.

Maybe, but I believe Marx has been historically correct in noting "Capital knows no fatherland."

 

[Eriol]

I brought that up once on this forum too, and folks pointed out that this would simply fracture operations into multiple "companies," with the high earners in one, and that company "contracting" the other company where the low earners are.

I agree that there are a myriad of ways to try and defeat the law, and they need to be accounted for, but do you support the basic idea or not?

 

[GasBandit]

I agree that there are a myriad of ways to try and defeat the law, and they need to be accounted for, but do you support the basic idea or not?

I've been convinced that there is no way of "accounting" for the ways around the law that will be effective without infringing on liberty to a completely unacceptable degree, even by today's NSA-is-in-your-colon standards. It's a nice thought, but like many other ideas in that vein, it just can't work.