Wealth Distribution in America

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Salty said:
Again, I think it's all really a shell game with definitions. Talking about a "shrinking" middle class while looking at all the nice cars, homes, big screen tvs, and smart phones doesn't quite square with my reality.
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By your membership here you establish that you live in a different reality than most. As do we all.
 
Flatiowa said:
Perhaps the entire premise of this discussion on this particular forum is flawed..
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It is, because of vague, undefined terms used to convey personal opinions that not everyone subscribes to.

Until objective criteria and hard data is introduced (in context) to measure that criteria, you end up with a cake soup of a discussion.
 
StraightnLevel said:
You just made his point for him.

Inequality is not the driving factor. Poverty is the driving factor.

As has been said already in this thread, the status of the 0.001% is irrelevant. What matters is the lifestyle trend of the bottom 50%.
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Exactly, and pretty much what I tried to say in post 226. As an example, look at what’s going on in Haiti right now.

I spent some time in Leogane a few years ago, helping to design renovations for an earthquake-damaged hospital. If you want to see what poverty really looks like, spend a few days down there and see some of the interior of the country. Nothing in the US comes close. And that sort of poverty is driving extreme violence there.
 
When left with no other option, even the most civilized man will revert to savage behaviors when faced with watching his children die of starvation. Far more so than for his own survival. It’s hard wired into all sentient beings. Society is always only a few meals away from anarchy.
 
Flatiowa said:
Perhaps the entire premise of this discussion on this particular forum is flawed.. it is a pilot forum and since pilots are actually a 1% subgroup of society that requires intelligence, determination, good decision making skills, and an entire host of other qualifiers to reach the point of becoming one the perspective is skewed?
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You know the rule ... if you own an airplane, you are rich! ;)
 
Bob Noel said:
correlation is not causation
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Yes, people are kind enough to point that out any time I've ever used that word on the Internet.
I posted a study that said there was enough evidence to show a causal relationship that other posters here seem to have ignored in subsequent replies.
 
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Baked Potato said:
Yes, people are kind enough to point that out any time I've ever used that word on the Internet.
I posted a study that said there was enough evidence to show a causal relationship that other posters here seem to have ignored in subsequent replies.
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No, we haven't ignored it at all. We have pointed out that there is a stronger correlation with poverty than with inequality, and the evidence of the US with low poverty and high inequality leads to a conclusion that poverty is more likely to be the primary causative factor than inequality.

Anyone can write a study to support a pre-selected conclusion. True science requires a dispassionate look at all available evidence selecting the best fitting solution, not just the most comfortable or politically expedient option.
 
StraightnLevel said:
No, we haven't ignored it at all. We have pointed out that there is a stronger correlation with poverty than with inequality, and the evidence of the US with low poverty and high inequality leads to a conclusion that poverty is more likely to be the primary causative factor than inequality.

Anyone can write a study to support a pre-selected conclusion. True science requires a dispassionate look at all available evidence selecting the best fitting solution, not just the most comfortable or politically expedient option.
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And I never claimed that poverty wasn't a factor. In fact, I said that there were many factors, just one of which was inequality.
 
tspear said:
I will disagree on this one. I have taken multiple people from unskilled labor positions, and trained them, sent them to school and turned them into great knowledge workers. People in general, have significantly more potential then we admit too. They often need both an opportunity and sometimes a push.

Tim
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There are absolutely plenty of people (present and past) that worked unskilled jobs and also have the intellectual capacity to be trained/educated for skilled jobs.

But I'm pretty surprised you would deny the existence of people who don't have that capacity.
 
Baked Potato said:
And I never claimed that poverty wasn't a factor. In fact, I said that there were many factors, just one of which was inequality.
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I'm going to respectfully disagree. There are enough examples where there is inequality and no propensity for societal upheaval that it just doesn't pass muster as a primary causative factor.

In fact, some of the most unequal nations are among the most stable, and vice versa. Look at a rank list by GINI, and you'll see that the top 2 are Brunei and the Bahamas. #3 is Brazil. Sweden is #12, and I don't think you can make a rational case that the Swedish are tumbling headlong down the path toward bloody revolution.

USA is #25. Afghanistan is #152; Myanmar is #158 (i.e., very low inequality).

en.wikipedia.org

List of sovereign states by wealth inequality - Wikipedia

en.wikipedia.org en.wikipedia.org

Again, in order to come to a truly rational, data-driven conclusion, you have to look at the data without assuming the outcome.
 
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Larry in TN said:
Then why has their standard of living increased so much over those decades?
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I've never seen convincing evidence that it has. Just the typical "oh but they have a phone and a TV" throw away comments, while ignoring that homelessness exploded during the 80's and is on the rise again over the past 15 years. That living anywhere that has jobs is impossible. That millions live in food deserts without access to healthy food. That education in poor areas is massively substandard, leading to generational poverty. That there are very real effects from living in high crime areas.
 
StraightnLevel said:
I'm going to respectfully disagree. There are enough examples where there is inequality and no propensity for societal upheaval that it just doesn't pass muster as a primary causative factor.

In fact, some of the most unequal nations are among the most stable. Look at a rank list by GINI, and you'll see that the top 2 are Brunei and the Bahamas. #3 is Brazil. Sweden is #12, and I don't think you can make a rational case that the Swedish are tumbling headlong down the path toward bloody revolution.

USA is #25.

en.wikipedia.org

List of sovereign states by wealth inequality - Wikipedia

en.wikipedia.org en.wikipedia.org

Again, in order to come to a truly rational, data-driven conclusion, you have to look at the data without assuming the outcome.
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I am not the poster who said anything about revolution or societal upheaval.
 
StraightnLevel said:
Feel free to substitute crime rates. Sweden has one of the most unequal societies on the planet, Brunei even more so. What is their crime rate?
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Similarly, there are anecdotal examples of impoverished communities without crime rates nearing those of others.
 
Cluemeister said:
Envy and victim status are powerful forces the political class loves to exploit for votes.
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I've noticed that many like to make themselves feel better by defending those less fortunate than them using the money from those more fortunate than them. It's all rather tidy.
 
StraightnLevel said:
Feel free to substitute crime rates. Sweden has one of the most unequal societies on the planet, Brunei even more so. What is their crime rate?
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Poverty vs inequity, inequity vs poverty. To me the elephant in the room is drug addiction. How much crime, especially in the US, is driven directly by drug addiction?

Most crime in my area is committed by drug users looking for ways to fund their addiction, not people trying to feed their families or wanting a big screen TV.
 
“You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down” --Abraham Lincoln
 
172andyou said:
I've never seen convincing evidence that it has. Just the typical "oh but they have a phone and a TV" throw away comments, while ignoring that homelessness exploded during the 80's and is on the rise again over the past 15 years. That living anywhere that has jobs is impossible. That millions live in food deserts without access to healthy food. That education in poor areas is massively substandard, leading to generational poverty. That there are very real effects from living in high crime areas.
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Middle class lifestyle has skyrocketed and so the expense required to maintain it is greater. What other evidence do you want? A average middle class family of 4 in the 60s often had a house with two or three bedrooms and one bathroom, one car, one tv with maybe 15 or 20 channels, one landline phone, no college degrees, and maybe one camping vacation or roadtrips to Grandma's house for major holidays. Eating out was a treat and if you wanted designer clothes, you designed them yourself...and you wore clothes until they wore out.

A middle class family today has a four bedroom house with three or four bathrooms, at least two cars, at least two tvs, at least four phones, usually all college educated to some degree, and at least one vacation to places far swankier than the KOA or Grandma's living room floor. Eating at home is now the treat, because fast food and takeout is the norm. All clothes are bought at the store and for a premium if you want the fashionable thing.

As far as food - In what part of the US can I not walk into a Walmart and find a bag of potatoes, a block of cheese, a bag of rice, a bag of beans, and a pound of ground beef or chicken? Add in some spinach or broccoli, and a carton or two of eggs, and for less than $50, you can feed yourself for two weeks with food that is much healthier than most middle class or rich families' diets. "Food deserts" are by and large a myth.

If I start on inner-city education, I will probably exceed the word count. At risk of omitting things, sum it up to say that, in spite of what is or isn't lacking from inner city schools, a lot of inner city people don't view education as important and the ones that do usually make something of themselves and end up breaking free from poverty.

Also, I don't mean to be crass or rude, but most homeless people aren't homeless because they just can't catch a break and are otherwise clean, hard-working people. There are some, sure, but most homeless people are extraordinarily mentally ill and/or have drug addictions and can't hold down a job or place to live because their addictions are more important than a place to live to them. That is an important issue, but only very, very tangentially related to wealth and income levels.
 
SkyChaser said:
one tv with maybe 15 or 20 channels,
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15-20 channels? We had four, the three main networks and PBS on UHF, and to get any of them you had to wiggle the rabbit ears “just right” for the picture to be clear.

And when the TV started to act up, you had to know exactly where to give it a Fonzie like whop on the side to get it working again. How long we’d have to whop on the TV depended on how long it took for dad to have enough extra cash in his pocket to call the TV repairman again.

Tube TVs, what a nice thing it was when transistor TVs became affordable.
 
Bill said:
15-20 channels? We had four, the three main networks and PBS on UHF, and to get any of them you had to wiggle the rabbit ears “just right” for the picture to be clear.

And when the TV started to act up, you had to know exactly where to give it a Fonzie like whop on the side to get it working again. How long we’d have to whop on the TV depended on how long it took for dad to have enough extra cash in his pocket to call the TV repairman again.

Tube TVs, what a nice thing it was when transistor TVs became affordable.
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I was going to write 3-5, but then I figured I should exaggerate to the greatest possibility so no one could complain that I had made things out as worse than they were... :tongue:
 
SkyChaser said:
I was going to write 3-5, but then I figured I should exaggerate to the greatest possibility so no one could complain that I had made things out as worse than they were... :tongue:
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It was 3 and unfortunately as a kid one of those was PBS...
 
SkyChaser said:
Middle class lifestyle has skyrocketed and so the expense required to maintain it is greater. What other evidence do you want?
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I was talking about poor people.

SkyChaser said:
Also, I don't mean to be crass or rude, but most homeless people aren't homeless because they just can't catch a break and are otherwise clean, hard-working people.
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Yep. A lot of them simple had the bad luck to be born with mental illness in a country that treats it as a moral failing.
 
I think a lot of the gnashing of teeth about this stuff comes not from the low end of the middle class, but up closer to the top. A lot of good rank and file (read: non-management) jobs in tech, engineering, perhaps the lower end of doctor and lawyer salaries, etc...sit comfortably in the $100-200K range. With housing prices the way they are, that amount of money doesn't feel like it used to. Not everyone wants to live in rural Nebraska, but I'm not even talking the coasts either. Even areas like Dallas and Charlotte have median housing prices pushing $400K these days. Nashville? Now over a half million. Desirable areas of Florida? Fuhgeddaboudit! :)
 
Just catching back up.

There was a previous post I'd like to address that had a ranking of nations by equality, or inequality, of wealth. I would be more interested to know this, of the nations with the lowest inequality, was everyone equally rich or equally poor?

As far as the breakdown of modern society, poverty isn't the biggest threat. I witnessed a localized breakdown in society as part of the aftermath of Hurricane Katrina. Turn off the electricty, restrict the availability of gas and groceries, and society became pretty medieval regardless of wealth and social status. Credit cards were useless, paper money was worthless, basic services were unavailable. Local law enforcement and emergency services were non-existent, all of their staff were struggling to protect their family, keep a roof over their head, and find food. Not a single business was open for weeks. You had to travel about 100 miles to find an area that was not impacted, if you could find the gas to get there and back. Our area was inundated with refugees from NOLA and the coast line, that had nothing but the clothes on their backs.

We were fortunate, we were rural country folk. We were self sufficient, had a large stocked pantry, and sufficient stores of other needed items. We just had to protect it and ourselves until things shook out.
 
kayoh190 said:
I think a lot of the gnashing of teeth about this stuff comes not from the low end of the middle class, but up closer to the top. A lot of good rank and file (read: non-management) jobs in tech, engineering, perhaps the lower end of doctor and lawyer salaries, etc...sit comfortably in the $100-200K range. With housing prices the way they are, that amount of money doesn't feel like it used to. Not everyone wants to live in rural Nebraska, but I'm not even talking the coasts either. Even areas like Dallas and Charlotte have median housing prices pushing $400K these days. Nashville? Now over a half million. Desirable areas of Florida? Fuhgeddaboudit! :)
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Median US home price is over $400K. That's well over 4X multiple of the median US income. The median home price in the 1960s was around $12K, or 2.1X multiple of median income. Having it take twice as much proportionally as it used to isn't just a function of homes size (avg 1,500 sq.ft. vs 2,600 today), most everything is more expensive proportionately. I do kind of laugh about the comments regarding multiple televisions though, since you cold buy 3 or 4 50" quality LED tvs for the cost of 1 color television back in 1970. But I also understand the sentiment of excess.
 
SoonerAviator said:
Median US home price is over $400K. That's well over 4X multiple of the median US income. The median home price in the 1960s was around $12K, or 2.1X multiple of median income. Having it take twice as much proportionally as it used to isn't just a function of homes size (avg 1,500 sq.ft. vs 2,600 today), most everything is more expensive proportionately. I do kind of laugh about the comments regarding multiple televisions though, since you cold buy 3 or 4 50" quality LED tvs for the cost of 1 color television back in 1970. But I also understand the sentiment of excess.
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The housing price issue has a lot to do with a decade of historically low interest rates.

Housing prices are largely set by "affordability" which in most cases means monthly payment ratio of 33/45 (mortgage payment up to 33% of monthly gross, total debt service lower than 45%). Thus, when interest rates went down below 4%, the sale price of houses went up as a result of the monthly price being artificially low. We haven't recovered from that yet, but we certainly will over time.
 
StraightnLevel said:
We haven't recovered from that yet, but we certainly will over time.
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It's gonna take a long time. Everyone is sitting on a ton of equity but nobody can afford to move, so there's not a lot of inventory out there. My wife and I have a big move coming this summer and I'd love to see lower home values, but it's disheartening to see how little there is on the market, and the prices haven't really softened much at all. It's to the point where it probably just makes more financial sense to rent for awhile.
 
SoonerAviator said:
Median US home price is over $400K. That's well over 4X multiple of the median US income. The median home price in the 1960s was around $12K, or 2.1X multiple of median income. ….
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And the number of dual income households increased 5x over the same period, so it kind of washes out in the end, which is part of the problem comparing data sets of medians. As a whole, homeownership has hovered around 61-65% since 1960, according to the Census. This while the population has nearly doubled from 180M to 333M. In real numbers, about 92M more Americans own a home today than did in 1960.

This is where comparing medians to medians isn’t really helpful, precisely because the assumption is at median income one must purchase a house at median price. There’s no correlative or causal relationship between the two. People above the median income may choose to rent while households below the median income may choose to purchase a home well above the median selling price and are able to do so quite comfortable because they put 20% down to avoid PMi and are left with a mortgage payment that’s less than 30% of net household income.

Look at bit closer at the Case-Schiller Home price/Household Income index, and you see the ratio was 6.3 whereas in Nov, 2023 it had only risen to 7.5.

So over 60+ years home price increases have only slightly outpaced household income. And it hasn’t been linear, either. It’s been as low as 3.6 in the 70s, 4.1 in the 80s, 4.0 in the 90s, 4.7 in the 00s and so on.

ETA: keep in mind macro-economic data doesn’t have to reflect micro-economic realities, precisely because macro anything is aggregated data.
 
TCABM said:
And the number of dual income households increased 5x over the same period, so it kind of washes out in the end, which is part of the problem comparing data sets of medians. As a whole, homeownership has hovered around 61-65% since 1960, according to the Census. This while the population has nearly doubled from 180M to 333M. In real numbers, about 92M more Americans own a home today than did in 1960.

This is where comparing medians to medians isn’t really helpful, precisely because the assumption is at median income one must purchase a house at median price. There’s no correlative or causal relationship between the two. People above the median income may choose to rent while households below the median income may choose to purchase a home well above the median selling price and are able to do so quite comfortable because they put 20% down to avoid PMi and are left with a mortgage payment that’s less than 30% of net household income.

Look at bit closer at the Case-Schiller Home price/Household Income index, and you see the ratio was 6.3 whereas in Nov, 2023 it had only risen to 7.5.

So over 60+ years home price increases have only slightly outpaced household income. And it hasn’t been linear, either. It’s been as low as 3.6 in the 70s, 4.1 in the 80s, 4.0 in the 90s, 4.7 in the 00s and so on.

ETA: keep in mind macro-economic data doesn’t have to reflect micro-economic realities, precisely because macro anything is aggregated data.
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Right, but what drove the shift to dual income households? The declining value of wages helped push women into the workforce in order to maintain a standard of living. The increase in cost of living in the lower and middle classes is, again, related to shift in wealth away from the lower classes.
 
SoonerAviator said:
Right, but what drove the shift to dual income households? The declining value of wages helped push women into the workforce in order to maintain a standard of living. The increase in cost of living in the lower and middle classes is, again, related to shift in wealth away from the lower classes.
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I've often wondered about that.

Was the push the declining value of wages, or was the declining value of wages caused by the feminist movement that encouraged women to get out of the homemaker role and into the workforce. There was a dynamic that changed in that era that led to an almost doubling of the amount of available labor force.

I would add, I make no argument for or against women in the workforce, just curious if that impact to the societal and economic condition has ever been truly factored.
 
172andyou said:
I was talking about poor people.


Yep. A lot of them simple had the bad luck to be born with mental illness in a country that treats it as a moral failing.
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I don't know what was considered poor in the years past, so I can't really compare to what is considered poor today and I still have a very distorted view of who is poor. I discovered when I took a post-secondary economics class in tenth grade that technically, my family had been under the poverty line for our area up until I was in about ninth grade, and that we still qualified for well over $1000 a month in food stamps - even though I would have never dreamed that we were considered "poor". Poor people had holes in their shoes and they weren't sure they were getting more than one or two meals a day and their cars didn't run right and their roof leaked every time it rained - and that's who food shelves, charities and government assistance was there for. We had a watertight roof, food and snacks, clothes, a van and my dad's work car, and even enough extra for things like modest birthday and Christmas presents and very occasional camping road trips. My parents will never be wealthy, though, and will probably end up living with one of us kids as they age.

I don't think anyone views legitimate mental illness as a moral failing, and if you're talking about addiction, addiction is actually a choice and that is why it's viewed as moral failing. That's why addicts can choose to become sober. Being afflicted with a mental illness or having an addiction doesn't justify any crime, though, nor should they be entitled to anything simply because someone somewhere has a lot of money. But again, this is not really part of the discussion at hand and I don't want to distract the thread from the issues it was meant to grapple with.

kayoh190 said:
It's gonna take a long time. Everyone is sitting on a ton of equity but nobody can afford to move, so there's not a lot of inventory out there. My wife and I have a big move coming this summer and I'd love to see lower home values, but it's disheartening to see how little there is on the market, and the prices haven't really softened much at all. It's to the point where it probably just makes more financial sense to rent for awhile.
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That's where @2-Bit Speed and I are at, too. We would love to buy a house and have it be our own and it feels so dumb to be paying rent when a mortgage payment would be cheaper month to month. But we'd rather not be upside down or paying way more than we should be just to be able to say we owned our own house.

SoonerAviator said:
Right, but what drove the shift to dual income households? The declining value of wages helped push women into the workforce in order to maintain a standard of living. The increase in cost of living in the lower and middle classes is, again, related to shift in wealth away from the lower classes.
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The answer to that one is a lot more complicated than income deficit, as mentioned in the previous post, and I don't think I can really address it without getting super close to RoC violations, so...
 
midwestpa24 said:
I've often wondered about that.

Was the push the declining value of wages, or was the declining value of wages caused by the feminist movement that encouraged women to get out of the homemaker role and into the workforce. There was a dynamic that changed in that era that led to an almost doubling of the amount of available labor force.

I would add, I make no argument for or against women in the workforce, just curious if that impact to the societal and economic condition has ever been truly factored.
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I'm not sure that we'll ever be able to sort out cause vs. effect for this particular issue. Keep in mind that in the same time frame there was a racial shift as well; lots of prejudicial hiring practices were outlawed, thus opening up the "good" jobs to a much wider range of the population.
 
StraightnLevel said:
I'm not sure that we'll ever be able to sort out cause vs. effect for this particular issue. Keep in mind that in the same time frame there was a racial shift as well; lots of prejudicial hiring practices were outlawed, thus opening up the "good" jobs to a much wider range of the population.
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Exactly. I don't think anyone would argue that either was bad, but it just goes to show how dynamic the economy is. It isn't easy to pick one statistic, such as minimum wage or housing cost, and use it to prove or disprove inequality, poverty, etc.
 
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