Thursday, June 18, 2015

On the Claim of a Shrinking Middle-Class

http://www.aei.org/publication/the-myth-of-middle-class-stagnation/print/ - As this article clearly shows, it depends on your definition of the term. Yes, median income (when adjusted for inflation) was essentially stagnant during the Bush years. But if you don't look at that and look instead at the three middle quintiles and compare their performance to that of the top earners (defined in a number of ways), you will see that the income inequality between the rich and the middle class actually went DOWN during the Bush years (with the Gini Coffecient basically staying constant)......................................................................................................And this doesn't even take into consideration the fact that there is significant movement between the various income groups; the fact that the bottom quintile is composed predominantly of young people and retirees while the highest quintile has workers mostly in their 40s and 50s. I mean, yes, I understand that "the rich are getting richer" is a meme that has gotten some significant traction over the decades but when you look at the data of the top 1% in 1996 and see that the actual human beings (and not just the static category) who comprised that category saw their income FALL by 26% (http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf - Table 6), you eventually have to let go of it, I think....................................................................................................P.S And as far as the stagnating median income goes (and, again, few people stay at the same level year after year), that I believe can best be explained by the huge influx of low-skilled workers coming in from Latin-America - pushing the median downward (not that that's necessarily an awful thing, mind you, in that this frees up various people like young mothers to enter or reenter the work force) and NOT by some sinister corporate conspiracy.

9 comments:

Rational Nation USA said...

Figures don't lie but liars figure.

Will "take no prisoners" Hart said...

Where specifically in the article (which secures all of its data from the U.S. Census) does the author lie? And as you can see here, the top 5%'s share of the AGI actually went down slightly during the Bush years and rose most rapidly DURING THE CLINTON YEARS! - http://www.census.gov/compendia/statab/2010/tables/10s0678.pdf

BB-Idaho said...

IMO, sourcing the American Enterprise Institute admits of special interest bias.
Given "On the Presumption that a Group of "Experts" Can Step in and Make Things Better, Free from Political Influence" applies to think tanks as well as anything else, we need evaluate their findings of their 'experts'.

Will "take no prisoners" Hart said...

Kind of like Octopus sourcing Salon (and at least the AEI has credible researchers like Charles Murray and Christina Hoff Sommers and teams up with Brookings every once in a while - Salon's heavy hitter being the dolt, Joan Walsh)? And BB, they and I are taking data straight from the U.S. Census and as you can see from the tables, a) the disparity between the top earners and the 3 middle quintiles was reduced from 2000 to 2007 and b) the top 1%'s share of the total AGI actually went down slightly during the Bush years. Yes, you can shoot the messenger if you like but the facts are the facts and the left has been lying its ass off on this topic for years now.

Will "take no prisoners" Hart said...

http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf - From Treasury.gov, BB - Table 6; the top 1%'s income went down 26% from 1996 to 2005, the top .1%'s income went down 50%, and the top .01%'s income went down almost 65% (actual people, not levels). The rich are most definitely NOT getting richer and, while I can see a dullard like Shaw or wd denying this reality, I refuse to believe that about you.

Rational Nation USA said...

Are the poor and middle class getting "richer".

BB-Idaho said...

The most current figures I've seen put 10% with 77% wealth, the remaining 90% with
23% of the pie, with the data trend indicating that we have drifted back to the
inequality of the early 1920s. Sure individuals move in an out of categories, but IMO AEI and similar seek interpretations that great wealth disparity is a good thing, while there are arguments that it is injurious to the economy (as for example, WalMart blaming an alarming drop in sales a few years back to changes
in temporary withholding changes on earnings; the $15 a week offset impacting those
on very tight budgets). I would think AEI and their analysts would a least admit
of the positives of a larger portion of the population spending more freely...but
I guess that is the reverse of trickle down? 96-05 is a thin data slice, and other
factors such as mfg productivity vs real wage, the long stable inflation and global
$$$ movement, record corporate profits, etc obscure the data and its drivers a bit,
but permit me to dissent in the matter and worry about the long term effect of growing inequality.

Will "take no prisoners" Hart said...

According to the OECD World Forum, in 1996 the top 20% in Denmark possessed 98.7% of that country's total wealth. So, is that any better; the bottom 80% having 1.3% of the wealth?......And, yes, Les, the other groups (human beings as opposed to categories) ARE doing better. As you can plainly see from that same table (from treasury.gov, not some right-wing think-tank), the income of the people in the bottom quintile in 1996 went up 91% by 2005. Not too shabby.......And I would also add that wealth is just like income in that the highest amounts tend to be with families that have older members and that these fortunes just don't drop out of the sky.

Will "take no prisoners" Hart said...

And how 'bout this, fellows, from figure 1 - http://www.ncpa.org/pdfs/st312.pdf - According to the U.S. Census Bureau 2007, 39.2% of the families in the bottom quintile had NO WORKERS!!!!! Of course there's going to be income inequality when one group is working (that same table shows that 84% of the families in the top quintile have at least 2 workers) and the other one isn't (though I would also instruct you to the fact that a great many families in the bottom quintile are also getting transfer payments and that these don't show up in the calculations).