OECD Report shows WIDENING income disparity

[jkapp]

i care about it for my son, tho. i want to leave him with a better nation than the one i inherited from my dad. i know....socialist, right?

No, I wouldn't call that socialist, but I would call it too late. The nation has already been f'ed by the previous generations. Your son will have to pay the price for previous generation's greed and careless behaviors, or he will have to pass it on to the next generation (if that's even possible anymore).

Your son will get one of the following:

1) a nation with ballooning debts and overburdened social programs, or

2) a heavily taxed nation and overburdened social programs

With government's refusal to stop overspending and people's refusal to break their dependence on government, the nation will never be better than what you inherited.

Just figure your dad, and probably yourself, had the ability to roll up your sleeves and do what you needed to do to survive - work whatever job you could find, sacrifice whatever you needed to to make ends meet, etc. Americans of today seem to have lost that bit of themselves, and I don't know how or when the culture of this nation changed so much.

Personally, I think it was the Baby Boomer generation. That generation received very little from their parents, and so for some reason thought it was a good idea to do the exact opposite for their own children and gave them everything. Now neither the boomers nor their children are willing to sacrifice at all.

[Opti]

I think two big reasons behind decling wages for low skilled workers are:

1. Global Competition
2. Technology.

I think this is true for certain skilled workers as well. Xrays are read by cheaper labor
overseas to be OK'd by fewer American workers. Also as we degenerate further into this
service economy to me means mostly retail when more and more people need to take
lesser paying jobs it changes cost structures in many businesses that feed the cycle. Health care has far more badly paying jobs than it does good ones. The facility I work for on the weekends has far more CNAs per shift than RNs and staffs no LPNs at all. Good, bad or indifferent it seems to me the number of bad paying jobs keeps increasing and I'm not really seeing increases in good paying jobs.

[Savoir Faire-Demogague in NJ]

Also as we degenerate further into this service economy to me means mostly retail when more and more people need to take lesser paying jobs it changes cost structures in many businesses that feed the cycle.

The US is the third largest manufacturing economy in the world. We are far from being a completely service oriented economy.

[formerroomate99]

i will try one more time, but i have to go to work after this. wide income disparity tends to break down the social fabric. therefore, for those of us that are interested in nations (i am not particularly one of them, for the record), there are implications in widening disparity for our society.

But does the wealth gap break down the social fabric, or is the wealth gap a symptom of an already broken social fabric? There was a time when self sufficiency and giving your children a better deal than you got were considered normal and admirable, while dependance, laziness, and ignorance were frowned upon. One reason the welfare system was set up to not give benefits to married women was because it was assumed that there would be very few women who would have a fatherless child to collect a check. Like it or not, the culture has changed for the worse in certain segments of the population, and no amount of income redistribution will correct the kind of boneheaded thinking that prompts people to reject education and hard work and spew out babies when they can't even support themselves.

[formerroomate99]

I think this is true for certain skilled workers as well. Xrays are read by cheaper labor
overseas to be OK'd by fewer American workers.

Xrays are taken by radiology techs, who earn a darn good salary for someone with a 2 year degree. That work cannot be outsourced. Interpreting X-rays, on the other hand, can and is being outsourced.

[Phoenix84]

I'm with CME, I'm not sure what the occupy movement or certain posters here are suggesting to fix this so called problem of income disparity. Should people who work hard and try and better themselves earn a better living or not? Should just take money from the wealthy and give it to people who don't work and make bad choices? How much should we take? Should everyone be equal? How much right do you have to someone else's money? Don't we respect someone's God given right to keep the fruits of their sweat, blood, and tears for themselves and their famlies? Why should someone work hard, delay gratification, and be responsible if others who don't do those things can live a lifestyle that's almost as good?

[Phoenix84]

I read an interesting article about the fastest declining inudtries in America. The two main reasons behind every one of them was technology and global competition.

[Savoir Faire-Demogague in NJ]

I'm with CME, I'm not sure what the occupy movement or certain posters here are suggesting to fix this so called problem of income disparity.

The range of income disparity has been fairly constant for a number of decades. This is not some new phenomena.

Those currently in the high earning brackets were not even there 10 years ago.

[fairlycrazy23]

Dec 6, 2011 12:50:10 GMT -5 djAdvocate said:

Dec 6, 2011 12:47:35 GMT -5 fairlycrazy23 said:

Does income inequality matter, or put a another way does producing wealth create poverty.

those are not the same question at all.

i have already answered the first one.

the answer to the second one is NO.

Yes, they really are, If you have 3 people (Mr's X,Y,Z) each earning 1000, for a total income of $3000, each person has about 33% of the total income, we have income equality. If next year Mr's X and Y earn 2000 each, and my Z earns 5000 for a total income of 9000
So Mr's X and Y each only have 22% of the income vs Mr Z's 56% and even combined X&Y only have 44% ; So now you can argue that X&Y have been made impoverished by Mr Z, even though more income has been created and everybody got richer.

And that doesn't go to the issue that 10 years later it might be MR X who is the top earner and Mr Z has moved down.

[Deleted]

There are certainly serious problems with our education system. It is hardly the worst in the world though."

We graduate some (but not all of course) people that can't read & many don't have basic math skills. Maybe not the worst in the world but we certainly aren't getting what we pay for nor are we getting what our child deserve. Wasting time trying to "rank" it with other countries is just that....a waste of time. We need to get on the stick & improve it.

Oh & for those that want to rank it, there's a pretty simple way to do it. Put a dot on a piece of graph paper at where we used to be & then put a dot on it where we are now. Then draw a line between the 2 dots. My guess is that if you continue that line far enough you will end up in China (or at least in the floor).

[mmhmm]

Thing is, the OP cites an article that stresses income disparity worldwide, not just in the US. It's important, I think, to look at it from that perspective rather than insist on being so insular that we see only our own nest. Income disparity in the US has been discussed at length. This thread is trying to focus (judging by the article cited) on the situation in developed countries all over the world ... a much broader perspective.
.

[djAdvocate]

Dec 6, 2011 16:03:43 GMT -5 formerroomate99 said:

i will try one more time, but i have to go to work after this. wide income disparity tends to break down the social fabric. therefore, for those of us that are interested in nations (i am not particularly one of them, for the record), there are implications in widening disparity for our society.

But does the wealth gap break down the social fabric, or is the wealth gap a symptom of an already broken social fabric?

i happen to think that it is the former. and as evidence to bear, i would bring 1000 years of fuedal societies, plus the many modern examples. it was not a case in those systems that lazy people created the disparity. the disparity was created and maintained by coercion, force, and brutality.

[djAdvocate]

Dec 6, 2011 16:39:52 GMT -5 fairlycrazy23 said:

Dec 6, 2011 12:50:10 GMT -5 djAdvocate said:

those are not the same question at all.

i have already answered the first one.

the answer to the second one is NO.

Yes, they really are, If you have 3 people (Mr's X,Y,Z) each earning 1000, for a total income of $3000, each person has about 33% of the total income, we have income equality. If next year Mr's X and Y earn 2000 each, and my Z earns 5000 for a total income of 9000
So Mr's X and Y each only have 22% of the income vs Mr Z's 56% and even combined X&Y only have 44% ; So now you can argue that X&Y have been made impoverished by Mr Z, even though more income has been created and everybody got richer.

you just made the OPPOSITE case from the one you proposed earlier, namely that wealth is a zero sum game, and that if one benefits than the other loses. so, in defense of the earlier remark, you have actually contradicted it, and agreed with me.

[djAdvocate]

Dec 6, 2011 21:10:23 GMT -5 mmhmm said:

Thing is, the OP cites an article that stresses income disparity worldwide, not just in the US. It's important, I think, to look at it from that perspective rather than insist on being so insular that we see only our own nest. Income disparity in the US has been discussed at length. This thread is trying to focus (judging by the article cited) on the situation in developed countries all over the world ... a much broader perspective.
.

i think the macro trends are much more interesting. but furthermore, if the same pattern exists in two wildly different nations that just happened to adopt the same policies of, say, taxation- that would lend a lot of credit to the idea that there might be correlation there. it is hard to do that when you are only looking at ONE economic system.

[djAdvocate]

Dec 6, 2011 16:18:33 GMT -5 Savoir Faire-Demogague in NJ said:

I'm with CME, I'm not sure what the occupy movement or certain posters here are suggesting to fix this so called problem of income disparity.

The range of income disparity has been fairly constant for a number of decades. This is not some new phenomena.

Those currently in the high earning brackets were not even there 10 years ago.

again, you are conflating income mobility with economic disparity. they are not the same thing. at all. period.

[Deleted]

"To reverse the trend, the report said, countries should implement tax and social policies that extract more from top earners while offering more support to those at the bottom."

Somehow, I suspect they had the "solutions" in mind before they even did the study. So inequality has increased slightly in the past 30 years. How much has the standard of living of the non-wealthy increased in the same time? I'd bet that has increased much faster. Coincidence? I think not.

"Meanwhile, the top federal income tax rate has fallen from 70 percent in 1981 to 35 percent, the report said."

And yet the effective tax rate paid by the top has not changed much. In fact, there were years during the Clinton administration, when they paid as much or more. Hard to take this report seriously. While the data may be real, the "solutions" seem pretty idealistic and not based in reality.

I suspect this report is nothing but an attempt to further an agenda.

[mmhmm]

Dec 6, 2011 21:48:00 GMT -5 djAdvocate said:

Dec 6, 2011 21:10:23 GMT -5 mmhmm said:

Thing is, the OP cites an article that stresses income disparity worldwide, not just in the US. It's important, I think, to look at it from that perspective rather than insist on being so insular that we see only our own nest. Income disparity in the US has been discussed at length. This thread is trying to focus (judging by the article cited) on the situation in developed countries all over the world ... a much broader perspective.
.

i think the macro trends are much more interesting. but furthermore, if the same pattern exists in two wildly different nations that just happened to adopt the same policies of, say, taxation- that would lend a lot of credit to the idea that there might be correlation there. it is hard to do that when you are only looking at ONE economic system.

Precisely, dj. It's sometimes difficult to get people to look at the big picture. They tend to focus on their own backyards. Yet, until we study the problem with a worldwide focus, we deny ourselves the opportunity to learn and, possibly, to find a real solution to the problems we're facing.

[djAdvocate]

Dec 6, 2011 21:56:12 GMT -5 @investorbob said:

"To reverse the trend, the report said, countries should implement tax and social policies that extract more from top earners while offering more support to those at the bottom."

Somehow, I suspect they had the "solutions" in mind before they even did the study. So inequality has increased slightly in the past 30 years. How much has the standard of living of the non-wealthy increased in the same time? I'd bet that has increased much faster. Coincidence? I think not.

"Meanwhile, the top federal income tax rate has fallen from 70 percent in 1981 to 35 percent, the report said."

And yet the effective tax rate paid by the top has not changed much. In fact, there were years during the Clinton administration, when they paid as much or more.

on what basis? absolute? of course! that is because incomes have risen. on a GDP basis? NFW. it is now the lowest it has been since before WW2.

Hard to take this report seriously. While the data may be real, the "solutions" seem pretty idealistic and not based in reality.

I suspect this report is nothing but an attempt to further an agenda.

oh dear lord. please tell me you are not a supply sider, ib.

[Deleted]

"oh dear lord. please tell me you are not a supply sider, ib."

What is causing the growing middle class in China and India? If it's not trickling down, where is it trickling from?

In any case, my main point was that the report, while it uses real data, is clearly biased. These sorts of reports always describe a problem and then just make assumptions about what the solutions are.

[djAdvocate]

Dec 6, 2011 22:16:12 GMT -5 @investorbob said:

"oh dear lord. please tell me you are not a supply sider, ib."

What is causing the growing middle class in China and India? If it's not trickling down, where is it trickling from?

outside

In any case, my main point was that the report, while it uses real data, is clearly biased. These sorts of reports always describe a problem and then just make assumptions about what the solutions are.

i am not sure how "clearly biased" it is. there seems to me to be a pretty clear relationship between top incremental tax rates and the degree of income disparity in a society, and intuitively, this makes sense. if you disagree, then go ahead and demonstrate that there is either no correlation, or one that is inverse to the one proposed.

[Deleted]

"there seems to me to be a pretty clear relationship between top incremental tax rates and the degree of income disparity in a society, and intuitively, this makes sense"

Of course it makes sense. But that doesn't mean raising taxes to reduce income disparity is a good thing. That's the spot where people are making a leap of faith.

[djAdvocate]

Dec 6, 2011 22:39:49 GMT -5 @investorbob said:

"there seems to me to be a pretty clear relationship between top incremental tax rates and the degree of income disparity in a society, and intuitively, this makes sense"

Of course it makes sense. But that doesn't mean raising taxes to reduce income disparity is a good thing. That's the spot where people are making a leap of faith.

sorry....where did they say it was a good thing? i must have missed that. i thought they just said there was a correlation.

[Deleted]

Huh? It's in bold in the OP. The OECD says that we need to reverse the trend of growing income disparity by taking money from the rich and giving it to everyone else.

The part they never investigate is whether there is a corellation between growing income disparity and a rising global standard of living. Income disparity is up a little bit. Standard of living is up a lot. I don't know about you, but I'm OK with that.

[djAdvocate]

Dec 6, 2011 22:45:28 GMT -5 @investorbob said:

Huh? It's in bold in the OP. The OECD says that we need to reverse the trend of growing income disparity by taking money from the rich and giving it to everyone else.

you must be using the same reading glasses that hootie uses. try reading it again and see if you can find the word "need" or "good" in the bold part of the article. i can't.

[Deleted]

If it's not good, it's either bad or pointless. Why would they recommend actions that do not do good? Of course they believe their recommended actions will do good. Otherwise, they wouldn't make the recommendation.

I mean, their motto is "BETTER POLICIES FOR BETTER LIVES". So I assume that the policy changes they are recommending are meant to make "better lives", which would be "good".

[djAdvocate]

Dec 6, 2011 22:59:02 GMT -5 @investorbob said:

If it's not good, it's either bad or pointless. Why would they recommend actions that do not do good? Of course they believe their recommended actions will do good. Otherwise, they wouldn't make the recommendation.

i read that as a conditional statement. they said IF you want to do "X", then we recommend you try "Y". they didn't actually say whether "Y" was desirable or not, and i would argue that in certain circumstances it is not. for example, if your GINI index were already quite near to zero, i can't imagine why you would want to make things "more equal".

i have already stated, earlier in this thread, that where you fall in this spectrum very much depends on how much value you give the idea of "nation" -vs- how much you give "individual". i don't actually value "nation" very much, so i am comfortable with higher GINI indexes. i think the idea of ignoring income disparity, however, is utter foolishness. others may feel differently, of course.

[djAdvocate]

Dec 6, 2011 22:59:02 GMT -5 @investorbob said:

I mean, their motto is "BETTER POLICIES FOR BETTER LIVES". So I assume that the policy changes they are recommending are meant to make "better lives", which would be "good".

LOL! i didn't note that. but again, i was just asking where they literally said that it is "good", and you answered that question. thanks.

[formerexpat]

I don't trust organizations that have a history of anti-American views. You know taxing and social policy was the conclusion before they even started the damn study. Kind of like global warming.

[djAdvocate]

Dec 6, 2011 23:11:07 GMT -5 formerexpat said:

I don't trust organizations that have a history of anti-American views. You know taxing and social policy was the conclusion before they even started the damn study. Kind of like global warming.

the use of the term "anti" in front of nations is incompatible with my conception of a democracy, and should only be used for totalizing systems. in other words, it is totally appropriate to say "anti Nazi" or "anti Soviet" but it is completely inappropriate to say "anti American". can you imagine that tag being used in a place like, say, Sweden? or Crete? people might do it as a joke, but it is simply not to be taken seriously.

no, the OECD can make remarks critical of the US, and i am perfectly OK with it. if we can't defend ourselves against the criticism, we should change. if we can, we shouldn't. but nobody was ever made better by ignoring criticism. they were only made into unbearable narcissists.

[Deleted]

"LOL! i didn't note that."

I didn't either until I had to defend myself against your ruthless assault.

I also didn't dig deeply into the report (on a laptop in a hotel with a slow internet connection), but I've seen these sorts of studies before. With studies like this, the conclusions are known before the study. The data is just a means to advance the agenda.