American Economy, Social Justice Index

From Justin Elliott:

What do you see here?

There has been no shortage of headlines this week about the growing income and wealth inequality in the United States. A new study from the Congressional Budget Office, for example, found that income of the top 1 percent of households increased by 275 percent in the 30-year period ending in 2007. American households at the bottom and in the middle, meanwhile, saw income growth of just 18 to 40 percent over the same period

But less attention has been paid to the fact that not only are the numbers bad in America, they’re particularly bad when compared to other developed nations.

A new report (.pdf) by the Bertelsmann Foundation drives this point home. The German think tank used a set of policy analyses to create a Social Justice Index of 31 developed nations in the Organisation for Economic Co-operation and Development (OECD). The United States came in a dismal 27th in the rankings. Here, for example, is a graph of one of the metrics, child poverty, in which the U.S. ranked fourth-to-last.

The U.S. ranks 27 out of 31 in your Social Justice Index, clustered around countries like Turkey and Slovakia. If we have the biggest economy in the world, why are we so low in this index?

Social justice does not depend solely on a nation’s wealth or its economic prosperity. Social justice is about creating equal opportunities for every individual. It is thus decisive that the right priorities are set in a number of policy fields. We have tried to measure the degree of social justice in each OECD country by looking at six key factors: poverty prevention, access to education, labor market inclusion, social cohesion and non-discrimination, health, as well as what we call “intergenerational justice.” The U.S. receives particularly low scores in the area of poverty prevention. Income poverty afflicts 17.3 percent of all Americans, including 22.2 percent of the elderly and 21.6 percent of children.

We argue that the prevention of poverty is a fundamental precondition for social justice, so it is weighted most strongly in the overall ranking. Under conditions of poverty, social participation is possible only with great difficulty. The United States’ low score in poverty prevention is one of the reasons why the U.S. is so low in the overall ranking. But there are also problems in some other areas — education, for instance. The impact of a student’s socioeconomic background on his or her educational success is significant in the U.S.. This also undermines the idea of equal opportunity.

About Scot McKnight

Scot McKnight is a recognized authority on the New Testament, early Christianity, and the historical Jesus. McKnight, author of more than fifty books, is the Professor of New Testament at Northern Seminary in Lombard, IL.

  • Robin

    I see a superstar economy. All of the equality indexes measure the ratio of top earners in an industry to the average earner in an industry. We have developed an economy in which within every market segment superstars are getting paid more.

    So if you looked at CEO salaries vs. average bank salaries, now and in 1970, the ratio has been skyprocketing, but that is also the case if you look at NBA players vs. average NBA employees, or Actors/Actresses vs. average cinema industry employees.

    It is just the economy that we have developed in every market segment, and it doesn’t exist in most other places (except maybe international soccer).

    We don’t mind a superstar economy when we think the participants deserve that status (NBA, NFL, Actors/Actresses). But we get very upset if there is an industry where people get paid as though they were superstars, when in reality they don’t add a lot of value. [I'm looking at you Allan Houston and Albert Haynesworth]

  • http://restoringsoul.blogspot.com Ann F-R

    There’s been a discussion on my FB page about a link I posted from Red Letter Christians about Jesus & OWS ( http://www.redletterchristians.org/would-jesus-occupy-wall-street/ ) I see a strong back & forth between all individuals’ responsibilities to be ethical and moral in their decisions, not to be greedy, not to be foolish (per David Brooks’ piece, yesterday, http://www.nytimes.com/2011/11/01/opinion/brooks-the-wrong-inequality.html?_r=1&src=tp&smid=fb-share ) and the systemic dysfunction we’re facing, now, in finance, legal & political sectors. As Christians we cannot neglect either the discipling nor the prophetic aspects of ministry in Christ, ISTM. We fulfill the former by honoring Jesus’ command to disciple believers, and fulfill the latter in our prophetic role to the communities & nations in which we live.

  • Larry Barber

    All that money that supports the American Empire has to come from somewhere.

  • http://LostCodex.com DRT

    Robin, I don’t know what world you live in, but the world I live in regularly questions and is challenged by the salaries of NBA, NFL, Actors/Actresses.

  • http://LostCodex.com DRT

    I hear Robin when he says that the US is a great economy, and the statistics bear that out since poverty is measured relative to the remaining portion of the country. But this statement from the report is telling.

    However, a relatively large percentage of the populations in the United States,
    Chile and Mexico live in income poverty, which puts them at a disadvantage in terms of participating
    in society.

    Wow, I had not put it quite in those terms. We may feel the poor get a vote and do participate, but at the significant level they do not.

  • http://LostCodex.com DRT

    …and here is the rub. Their definition:

    Instead of an “equalizing”
    distributive justice or a simply formal equality of life chances in which the rules of the game and
    codes of procedure are applied equally, this concept of justice is concerned with guaranteeing each
    individual genuinely equal opportunities for self-realization through the targeted investment in the
    development of individual “capabilities.”2

    The american ideal seems to have gone more to the side of equal rules instead of equal opportunity. Though it is pretty easy to debate the inequality of rules too, at this point.

  • cody

    Robin, also, the NBA players are not the ones directly controlling their own salaries and directly controlling the salaries of others. But the opposite is true with many in “the 1%.” They are the ones calling the shots for themselves and for those who are directly under them.

    And I agree with #4. No one that I know of would ever in a million years say an NBA player or actress “deserves” the money they are earning. that’s just silly.

  • Robin

    DRT,

    We complain about basketball players making tons of money, but reducing that money is not a real policy consideration. Just look at what we are occupying right now…Wall Street. This isn’t “Occupy NFL stadiums” or “Occupy Hollywood”.If we were really incensed about all income inequality we would demand that NFL ticket and merchandise prices be cut by 60% and that movie tickets be lowered to $3 per ticket.

    We don’t hear those types of proposals because we don’t really care about them. We hear outrage over the price of gas and bank fees. It would be interesting to graph gasoline inflation and NFL admission/apparel inflation over the past couple of decades.

    Lastly, I don’t think my comments implied we have a great economy, just that the economy we do have has a given structure. Big increases in profitability have translated, in this country, into wage increases for the superstarts and to stock market returns (historically) not wage increases for median workers.

    There was another report today that, by decade, charted GDP increases compared to median salary increases. In the US only about half of GDP increases have shown up in worker salaries. France actually had more wage growth and national income growth (thanks to Unions bargaining for raises quicker than the economy grew).

    My overall feeling is that the average American is objectively better off now than 3 decades ago (and the data bears that out) but feels relatively worse off than 3 decades ago (even though he has more purchasing power now, he sees people around him with 3x more purchasing power).

  • Robin

    Cody,

    NBA players and actresses have almost as much control over their salaries as everyone else “in the 1%.” Namely, they bargain for them. CEO’s bargain with boards of trustees, Doctors bargain with hospitals, Lawyers bargain with their firms, and player’s unions bargain with their ownership.

    I highly doubt that the CEO at Bank of America is setting the starting salary for bank tellers any more than Lebron James is deciding the salary for people that work concessions. There is just a perception that they do since they “are the boss.”

  • JohnM

    So conditions in the U.S. make living here like living in Slovakia or Turkey? Otherwise, I don’t quite see the practical point of the comparison.

    And about that one percent – how much does one has to make to crack that category? Take a look, might not be as much as you might think. More than I make, for the record, but less than I thought till I looked it up.

  • cody

    Robin,

    I said that NBA players don’t “directly” control their salary. Of course they play the market. But the difference is that CEOs have much more control over what their employers are making than Lebron James does over the person working concessions.

    And I don’t think that American’s actually have more buying power than they did three decades ago. Not when you factor in avg. household debt, anyway. People have more than ever, but also have more debt than ever.

  • Robin

    Cody,

    Here is one version of the chart that has been making the rounds.

    http://www.cbpp.org/cms/?fa=view&id=3220

    CBPP is a liberal think tank, so it certainly isn’t biased to the right. Bottom line is that “purchasing power” which is what we try to measure when we say “real income” has gone up 16% for the poorest 20% since 1979. So it is income adjusted for inflation, and the CPI tries to take housing, all consumer purchases, energy prices, and medical spending into account. The only thing that wouldn’t be included, I believe, is interest rates, but interest rates have dropped dramatically since 1979.

    So, everyone, including the poorest 20% has more purchasing power now than then, but if they also tried to borrow against future income…they weren’t able to make it with a 16% real income increase and spent (using credit) as though they had a 30% increase, then yes, that additional debt they incurred, and the accompanying interest charges would eat into the 16% real increase.

  • http://LostCodex.com DRT

    Robin,

    No one seriously believes that the money that the players are making is diminishing their livelihood. That is a big difference between them and Wall street. Having the standard that just because people are not demonstrating against it means it is not a problem is simplistic and not accurate.

    You said:

    There was another report today that, by decade, charted GDP increases compared to median salary increases. In the US only about half of GDP increases have shown up in worker salaries. France actually had more wage growth and national income growth (thanks to Unions bargaining for raises quicker than the economy grew).

    Are you trying to prove my point? My interpretation of what you have said is that the value of goods and services in the country has increased and only half of those have been given to lower income people. Hmmm does not sound like social justice to me.

  • http://LostCodex.com DRT

    Robin, While I have not read the article you referenced, I looked at it and here are the section headings:

    Income Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show

    Income Gains at Top Have Outpaced All Other Groups Since 1979

    Trend of Rising Inequality Continued in 2007

    Recession Likely to Reduce Inequality, But Change May Only Be Temporary

    Bush-Era Tax Cuts Have Exacerbated Income Gaps

    Pre-Tax Income Inequality Also Growing Rapidly

    CBO Data Offer Most Comprehensive Look at Inequality

    Are you saying that I need to read this to see that, as you said,

    Bottom line is that “purchasing power” which is what we try to measure when we say “real income” has gone up 16% for the poorest 20% since 1979.

    I really don’t want to waste my time given the obvious stance of the article. What are you trying to do?

  • http://LostCodex.com DRT

    …meant to close the bold after “Inequality”

  • Robin

    DRT,

    I am trying to comment honestly on the situation.

    Income inequality has been rising. That isn’t a surprise. I would never be dumb enough to try and challenge that. But that doesn’t mean that everything has gone to he$% in a handbasket.

    We can have rising income inequality AT THE SAME TIME as we have a superstar economy. Rising income inequality is what you would expect in such an economy. A large part of what is causing it is centralization and monopolization. Hundreds of movie studios merge into a few film companies that can afford to pay $20 M per film to their stars, thousands of local banks with local presidents making $150 K are replaced by 6 “too big to fail” banks with CEOs making $10 M.

    You don’t even have to look at big entities like that. You can look at centralization of school districts. The districts in our main city merged so that we now have one mega-district whose superintendent makes 3x what the governor of our state makes. Every highschool principal in that city makes more money than the governor. We have created an economy with massive economies of scale in every industry and we are rewarding the people who can climb to the tops of those industries (athletes, principals, superintendents) handsomely.

    All of that (rising income inequality, superstar economy) can be true, and I can still say that the average American has more purchasing power now than he did 30 years ago.

    If I get a 16% pay raise and you get a 297% pay raise, sure there is a more unequal distribution of income between us now, but I am still better off.

    The problem is that we seem to think, and it might be true, that it you only got a 100% pay raise, maybe I would have gotten a 60% pay raise, maybe the rich getting huge income increases caused the poor to get only small ones. All of that might be correct, but it doesn’t change the fact that I am still better off today with a 16% raise than I was yesterday with a 0% raise.

    So
    (1) Things are objectively better, in terms of income, for the poor than they were 30 years ago
    (2) Things feel worse because median income has not increased as quickly as upper-level income
    (3) If the upper class had not had such great gains, it is possible that median income would have grown quicker, but the current data does not address that question
    (4) We have centralized every industry from athletics, to manufacturing, to education, and this is the outcome you would expect from that centralization

    All of these things are simultaneously true.

  • Robin

    Bottom line:

    My point about real income is a fact from the data, just like the growing inequality is a fact from the data. The chart is constructed so that everyone sees the big gap and says “Oh my goodness, look at the inequality.” I see that, it is obvious, but I also look at it and say “At least real income has gone up and not down, that is one glimmer of hope.”

    There is one caveat and that is if you extend the data to 2009 I know that real incomes of the top 1% drop 34% from their peak. In order to be in the top 1% in 2007 you had to earn something like $430,000 (from memory) and now you only have to earn something like $320,000. So the recession has brought down the top 1% quite a bit from the peak shown in the graph.

  • DLS

    Social Justice does not include theft of someone else’s stuff to fulfill your own obligation of charity.

  • JohnM

    Robin #16 Points,(1)and (3)in particular and #17- Exactly!

    So many people are quoting the figures on income inequality in a way that assumes the awfulness of it all is self evident. It isn’t.

    Furthermore, “now you only have to earn something like $320,000″ to be in the top 1 percent, is part of a point I was trying to make earlier.

    If nothing else, everyone, ask yourselves why in a country with over 400 billionares, and many more millionares, working professionals who earn less than half a million a year should be whipping boys. Assuming of course anybody needs to be tied to the whipping post because of their income.

    What if a family makes “only” $250,000 a year. Still pretty comfortable don’t you think? But not top 1 percent, so are they bad people, or are they okay cause they’re not top 1 percent? Maybe as long as they don’t aspire to another hundred grand a year, huh? How about $100,000 a year – don’t you think a family could live okay on that? Lots of what you’d consider fairly ordinary people do. Does that make them good folks or villians? Should they be satisfied, or envious of the top 1 percent?

    What is the minimum income level that makes you envious? At what point can we call off the eat-the-rich crowd? At what point do YOU start getting nervous?

  • Tom F.

    Robin, although income may have gone up around 25% for average workers, the rising costs of things like education and health care probably wiped those gains out, wouldn’t you say? Also, the less you make, the more of your household budget is made up of these items.

    I think its important that progressives and all the rest not get painted into a corner here. It’s not the brute fact of income equality that is the problem here. It’s that less and less of the other 99% (or even other 90%, top 10% has at least done okay) can afford to maintain their middle class status (through things like health care and education, which by the way, are hardly luxuries).

    And actually, by the way, that is exactly what you see. Americans were fine with income inequality during the boom, and that makes sense, as access to education and health care generally increased (well, health care was at least a mostly positive picture). It’s just that the inequality becomes intolerable when a certain political group wants to lower taxes on that 1% (nearly all flat taxes proposed would do this) and to cut social spending when huge sections of the bottom 40% don’t have access to health care. (And at least one political candidate suggests that educational loans should be done away with.)

    JohnM- Who exactly are you talking to? Who is “so many people”? To me, there is nothing wrong with inequality except on the lower end, in that I do think having amazingly poor people means we do have an unjust society, while I do not think having amazingly rich people (relative to people who simply have enough) is a problem. HOWEVER, on a policy level, I do oppose policies that would lower taxes on the wealthy and then cut programs that serve the poor. Would you agree with at least that much?

  • http://azspot.net Naum

    @Robin,

    Rise in inequality manifests in many ugly ways — more resources devoted to security and police (gates, police, prisons), poorer health, and just as tragic, sets off an “arms race” where insecurity plagues workers over relative positioning — see work of economist Robert Frank and others on this. Basically, the studies illustrate how nations with greater inequality are unhealthy, and more likely to be riddled with structural problems.

    I would dispute your assertions about purchasing power — yes, lower income Americans can purchase all sorts of doodads and gadgets, the kind of which (relatively speaking, as nobody in the 70s sported laptops and smartphones) are now ubiquitous in most developing nations too. But those items are essential now for someone to bootstrap themselves into a higher strata of income. Moreover, simply benchmark the price of an average car and an average home compared to 1972 — the ratio of cost to income is higher in 2011. (You may counter that houses are bigger, cars are nicer, but, again, that fails to take into account “relative positioning” — nobody wants to live in crime infested, poor school neighborhoods. And the state of public transportation v. need for automobile is much more auto-reliant in today’s urban, suburban and exurban spheres)

    Also, more than half of Americans make less than 26K. Exclude the top 10%, and average wage has decreased. That’s even before accounting for the utter fadeaway of job security — my father’s generation one could secure lifetime employment that supported stay-at-home wife with GED — today, college graduates fret over staying gainfully employed.

  • Tom F.

    DLS: Do you think that the government should attempt to create equal opportunity?

  • JohnM

    Tom F. # 20 – The “so many people” are those who go on and on about merely that brute fact of income inequality and repeat the tired rhetoric about the top 1 percent. Whether or not you do that we’ve sure being hearing enough from the ones who do. That rhetoric is not exactly the same as opposing “policies that would lower taxes on the wealthy and then cut programs that serve the poor”, and it smacks more of envy and resentment. But I’ll still ask (all) how do you want to define the wealthy? Unless you are one of those amazingly poor, chances are somebody somewhere thinks you’re wealthy and they should have some of what you call yours.

  • Diane

    One of the problems might be that we are looking at data across a 30 year sweep. My understanding is that real income for the 99% flatlined about a decade ago and has declined over the past two years.

  • Diane

    JohnM,

    I believe that the rich believe that everyone is envying them and wants “their stuff.” Perhaps some people do. But to make such a blanket statement is simply wrong. Most people I know have made many, many moral decisions away from maximizing personal wealth–to many people, becoming super wealthy simply isn’t a goal or anything that’s envied–but what we want is justice–and more than that–some assurance through breaking up companies too large to fail, through accountability, transparency, etc–that this won’t happen again.

  • Diane

    “And we hate the rich? Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that’s just the problem. These guys on Wall Street are not winning – they’re cheating. And as much as we love the self-made success story, we hate the cheater that much more.”

    Read more: http://www.rollingstone.com/politics/blogs/taibblog/owss-beef-wall-street-isnt-winning-its-cheating-20111025#ixzz1cYKRb4xQ

  • Robin

    Tom F. (20),

    When income is adjusted for inflation it should, theoretically, account for all those cost increases in health and education. You can look on the BLS website to see the factors that contribute to the CPI and they are both in there. People disagree about whether the CPI is weighted too heavily to housing or energy, but it is incorrect to say that real income doesn’t account for increases in education and health care costs. The CPI covers all those things.

  • Robin

    Naum,

    It is factually incorrect to say that if you factor out the top 10% average wages have decreased (at least if the CBPP chart is correct) wages for every single group of Americans have increased.

    According to the Census the average income for the “middle 20 percent” in the US was $49,309 in 2010 and $16,428 in 1979. This is as close as you can get to the “Median American.”

    The median home value in the US in 1980 was $47,200. In 2010 it was $166,200, but interest rates (prime rate) in 1979 was 15.5% and the current rate is 3.25%. So my trusty amortization calculator says a 30-year fixed loan on a median home in 1979 (20% down) would have run you $5,860 per year. A loan in 2010 would have run you $6,945 per year.

    On a percentage basis it was much more expensive to buy a home in 1979.

  • Diane

    Robin,

    Yes–I remember those years–and in 1979, 1980, 1981, 1982–it WAS much more expensive to buy a home–but you are choosing by far the worst years for home prices of the past 50. What about 1986, 1987, 1992, 1996, 1997, 2000? (Or any of the years in between: 1986-2000? Or 1960-1976?)

  • Robin

    I am all for structural changes that stop rewarding risky decisions. If banks bet big on credit default swaps and they fail, they should suffer the consequences, not get bailed out. I would say the same thing about the auto industry, airline industry, and silicon valley. Our economy cannot work properly when CEOs with political ties (whether they are at Goldman Sachs or GE) know that the government is going to bail them out of bad decisions, but let them keep profits from good decisions.

    My approach differs from OWS because I want to let them fail when they make bad decisions, whereas most of the rhetoric from OWS seems to want to socialize their good decisions. So we will continue to bail out bad companies, but when they turn a profit we’ll skim 20% or 30% off the top. I say let them (companies) die and they will quit taking excessive risks leading to various bubbles.

    I think there is also terrible misinformation over “the top 1%.” There are some CEOs in it, but almost half of it are doctors and lawyers. It isn’t just wall-street fat cats who sit around swimming in pools of money.

    You also have to account for the fact that the top 1% has changed since 1979. The rhetoric paints the picture that Joe millionaire in 1979 has had his real income go up 300% in 30 years and now he is Joe Billionaire. In a few cases that might be correct, but by and large we had an economy in 1979 that had an income distribution, and our entire economy has developed over 30 years and new companies and industries have sprang up that have dramatically altered the very nature of our economy so that todays 1% is not recognizable if you look at yesteryear’s top 1%.

    In 1979 every community had multiple stores for goods, now we all have a Wal-Mart and a Target that dominate the landscape. In 1979 there were a few electronics companies, now we have massive mega-companies like Apple who have more money in cash reserves than the US government. The changing nature of the economy has driven the income gap as much as increasing salaries of the wealthy. The only way to get back to a 1979 income distribution is to get back to a 1979 economy. You would have to get rid of companies like Starbucks, Wal-Mart, Target, Apple, etc. heck, even GENERAL MOTORS, which is now a conglomeration of multiple 1979 car companies, and you would have to get back to mom and pop stores, local coffee shops, etc.

    Let’s face it, nobody that ran a coffee shop in 1979 would have been in the top 1%, but now that we have a new coffee economy, multiple people in that industry are in the top .01%.

  • Robin

    Diane,

    I picked 1979 because that is where the data in the other chart started. I looked at the historical data and basically from 1974 to 1985 the prime rate was 10% or above and it wouldn’t make much difference.

    I know it hasn’t been explicit on this blog, but when people see that chart I referenced, the general comments have had a “Oh, look, 1979 was utopia compared to today, we have hardly had any wage increases since then” so I think it is OK to use 1979.

    My broader point is that the standard of living has either remained constant or gotten better. People can be nostalgic about the 70′s, but I greatly prefer the current era. Now if we are talking about the 50′s or 60′s I might have a different answer. But the current decade is much better for the average American than the 70s.

  • Robin

    I do think that the 90′s were far better than this decade, but the 70′s were definitely worse. If I had to rank the last 4 decades by economic indicators the 90′s would definitely be the best and the 70′s the worst. I’d have to look at some more statistics to figure out how the 80s and 00′s compare. I suspect the 00′s would be better than the early 80′s but worse than the late 80′s.

  • Fish

    Income inequality is not the problem.

    The problem is that such dramatic income inequality gives the wealthy a huge lever to influence governmental policy and deprives the poor of the education needed to improve their income. It creates a permanent upper class and a permanent lower class.

    I don’t see a large difference between being ruled by English nobles who inherited their titles and being ruled by billionaires who inherited their wealth or corporations who control all the wealth. I am still a serf with my life, liberty and pursuit of freedom determined by my overlords.

    I have never heard a person in poverty say they want someone else’s money. That’s a wealthy person’s view of the situation. The people in poverty that I know only want a fair chance at improving themselves.

  • Jeremy

    There was a great TED talk recently about the social costs of income disparity and how it correlates with other problems. How economic inequality harms societies. Wilkinson does a good job of visually displaying the data and it’s interesting stuff. Not sure I completely agree, but it’s worth a look.

  • DLS

    “I have never heard a person in poverty say they want someone else’s money.

    - That exactly what they say, just in other words.

  • Richard

    @ 35

    You’re arguing with his experience from your own I take it? Statistical studies have shown that the poor tend to emphasize lack of voice and a perceived lack of power when they talk about poverty whereas upper and middle class folks tend to talk about lack of material goods. So while some of the individuals you have interacted with may have expressed such sentiments, people in poverty don’t tend to do so.

    Curious, do you have any friends in poverty?

  • Tom F.

    DLS: you never answered my original question, which is beginning to make me suspect that you are simply trolling around the blog. Do you believe that the government should attempt to ensure equal opportunities?

    Robin: okay, cool. I guess I didn’t know whether that increase in income was baselined just against the original income or if it also included inflation. It does beg the question though, if real income has gone up, why does access to health care and education seem more tenuous? Certainly state government are subsidizing education much less than they used to, and health care costs have continued to gobble up a bigger and bigger share of the economy.

  • http://azspot.net Naum

    @Robin, you picked 1970, a time when interest rates where high…

    By looking at this report from the census bureau (page 720) and this report, you can see that the median sales price of a home in 1971 was $24,800. The average annual wage in 1971 was $6,620 (see previous section). So it took 3.74 years of labor for the average worker in 1971 to buy the average home.

    The median sales price of a house in 1999 was $133,300. The average annual wage in 1999 was $23,750. So it took 5.61 years of labor for the average worker in 1999 to buy the average home.

    In 1971, the average cost of a car in the U.S. was $3,430.

    In 2000, the average cost of a car in the U.S. was $24,730.

    Adjusted for inflation to the year 2000 (using this calculator), the car in 1971 cost about $14,700.

    So the price of the average car in 2000 is 7.2 times greater than the
    price of the average car in 1971 in absolute dollars, and about 1.7
    times greater in inflation-adjusted dollars.

    —-

    The numbers cited are dated — will update, but the factoid about 50% of Americans earning less than 26K is a recent data point. And average car price is just a shade under 30K.

  • http://azspot.net Naum

    Last statistics I perused, home price median was at ~$170K (not average). The median wage is ~26K, according to most recent SSA report.

    That is 6.5X, compared to 3.7X in 1971.

  • DLS

    “Statistical studies have shown that the poor tend to emphasize lack of voice and a perceived lack of power when they talk about poverty whereas upper and middle class folks tend to talk about lack of material goods. So while some of the individuals you have interacted with may have expressed such sentiments, people in poverty don’t tend to do so.

    - What statistical studies are these? Are the poor being polled and giving answers that say that what they really want is a “voice”? And if so, what does ‘a voice’ even mean? Do they know? Are they asked to explain what that means? Given that I don’t even know what ‘a voice’ means in this context, I can’t imagine that they do either.

    Secondly, even if that were the case, the people advocating for that group are absolutely making the case the that a transfer of ‘stuff’ occur to address said poverty.

  • DLS

    “Do you believe that the government should attempt to ensure equal opportunities?

    - Tom, the reason I didn’t answer that question is because your question is exactly like the right-winger who says to someone “So, you don’t support the War in ______. Do you not support freedom?” Neither question is intended to produce a constructive answer.

  • Robin

    Naum,

    You can use whatever year you prefer, but you cannot neglect interest rates when it comes to houses or cars, because they are fundamentally things we buy on credit. When the interest rates go down, house prices go up, and vice versa. So if you want to use 1970m you still have to look at 1970 interest rates and calculate a monthly mortgage payments. Nobody, even then, saved up cash for X years, they still took out loans.

    This is just the flip-side of saying “If Greenspan hadn’t driven interest rates through the floor after 9/11 it would have been harder to have a housing bubble…because people went out and started flipping houses because they could borrow with $0 down at 4% interest.”

    The same thing applies to autos, to a lesser extent, since the vast majority of new purchases are on credit.

  • Robin

    Tom F., (I’ll answer the question DLS isn’t)

    In terms of “justice” I am very much in favor of (1) equal process and (2)equal opportunity (in resources).

    Sometimes those two values contradict, sometimes your processes will have to favor the underpriveleged to ensure equal resource opportunity (redistribution of property taxes from rich to poor districts to ensure that both districts have equalized funding)…but I am not in favor of all equal opportunity.

    For example, middle class white kids have two distinct advantages in education. They are in wealthier districts, and they have other societal factors that are harder to measure…their parents have better educations, they are read to more frequently, their peers have more resources, etc.

    I am for the kind of equal opportunity that tries to fix the initial income disparity…because it is the easiest to measure and fix. I am opposed, generally, to policies that try and say “it’s not fair that poor children’s parents had less education so we are going to give poor schools extra money (beyond equalization) so that poor school have more financial resources to offset middle class schools non-financial resources” or “it’s not fair that middle class kids have smarter peers, so we are going to force middle class kids to be bussed across town and attend poorer schools in the hopes that they rub off on the poor kids.”

    These latter types of reforms deal with variables that are much more difficult to measure and impact and they entail a lot of invasive social engineering.

  • Hug

    I for one am tired of my wealth being transferred to the wealthier. The concentration of wealth in this country clearly documents that’s where the real redistribution is happening. The rich want my money way more than the poor do (greed begets greed, and the rich are simply projecting their own onto the poor) and they have the power to make it happen. From our health care system to Wall Street to defence spending, the middle class and the poor are supporting the wealthy.

  • Tom F.

    DLS: I respond in kind: why would I respond in a complex way to your simple little jabs? If you would like a more complex question, make more complex comments.

    Robin: So you would say that you are okay with some forms of unequal opportunity than? Wouldn’t you say that means that later, when those unequal opportunities lead to different economic outcomes (i.e., poverty), than it isn’t appropriate to blame those individuals who ACTUALLY had a different set of opportunities than those who ended up successful?

  • Diane

    Robin,

    Once again, I want to thank you for your always civil and fact-based conversation. I believe your politics are more right-wing than mine but I appreciate the opportunity to have a reasonable dialogue with you. You are far persuasive to me than a person constantly bashing the other side. I wish we could elect a bunch of yous to government. You seem open to new information.

  • http://LostCodex.com DRT

    Diane, I too appreciate Robin, though I shake my head at his values, I think he is consistent in his approach.


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