Income gap continues to grow in US

[Duke]

The income gap between top and bottom US money earners continues to widen, leading Western nations by a large margin.

Conventional wisdom says that this means the American poor are worse off than the poor in more socially-oriented European nations. Europe is often cited by liberals as the socio-economic model the US should follow because it offers more "equality" and greater economic power for the poor.

Conventional wisdom is wrong.

 

[Zrow]

Another nail in the coffin in regard to socialists wanting income redistribution to "help the poor".

Of course, I'm waiting to hear that "it's because they don't have minimum wage!" Bah.

 

[Danoff]

People like to say "the rich are getting richer and the poor are getting poorer" because they don't understand economics. They think that economics is like poker, if someone wins, someone else loses. That doesn't work out.

It is possible (and indeed does happen) for the rich to get richer and the poor to get richer. This is particularly likely in a free, capitalist society. Generally speaking, the rich can get richer faster than the poor can get richer because they have a lot of money to invest. Rich people can make money just by investing carefully. Poor people have to make money by actually producing (lots of times, they're the ones the rich people are funding with their investments).

So the gains for the rich may outpace the gains from the poor, but that makes sense economically and isn't a bad result. People forget that the rich getting richer is a good thing. We'd be in bad shape if our rich were getting poorer. What people forget is that our "poor" are living better and better as time goes on.

In America, our poor is so well off that we've taken to importing Mexico's poor.

 

[niky]

Actually, does this mean your poor are richer? Or that less Americans are poor?

Being on the other side of the fence, I have to admit, that's a shocking statistic.

It does show Switzerland and Canada pacing the US... but Switzerland doesn't count... they're all rich ex-Nazis... (that wasn't serious, mind you...)... so not all socialism can be bad... can it?

And what do they mean by purchasing power parity? Is this based on what citizens in each country can afford, based on US prices, or according to an adjusted standard-of-living for each country?

But one thing this graph goes to show... if you want to get rich, there's no better place than the good old US of A! (no, that's not sarcasm or criticism, just plain fact.)

 

[Swift]

In America, our poor is so well off that we've taken to importing Mexico's poor.

Yep, but we need to stop that mess, yesterday!

 

[Duke]

niky: What the graph show is the 'purchasing power parity' normalized to the US having an arbitrary value of 100. So this is not the economic strength of an average European income in the US; but the equivalent purchasing power in the home country. So in other words it accounts for regional differences in, say, housing costs, and factors out differences in relative currency values.

One thing the original report does mention is that publically-funded costs such as national health care and education are not included... so some basic services are provided and not required to be purchased directly for those more socialist countries on the list.

They do not mention (one way or the other) if the value of private fringe benefits (such as company-provided health insurance) is included as 'income' or not. I suspect not - which would tend to reduce the effect described above.

 

[YSSMAN]

Very interesting indeed. I'm sure the information will be spun many different ways for each side of the political line, particularly in ways against the current administration and our long-standing social programs.

Granted, there are a few things that need changing in the system, but they aren't going to need to be drastic because the gap is getting bigger.

I'm in the middle class, so whatever... I'm either moving up or moving down, I'm not sure, but money has always been a bit tight, and thats allright... It teaches you fiscal responsibility, something that many people do not have.

 

[niky]

niky: What the graph show is the 'purchasing power parity' normalized to the US having an arbitrary value of 100. So this is not the economic strength of an average European income in the US; but the equivalent purchasing power in the home country. So in other words it accounts for regional differences in, say, housing costs, and factors out differences in relative currency values.

One thing the original report does mention is that publically-funded costs such as national health care and education are not included... so some basic services are provided and not required to be purchased directly for those more socialist countries on the list.

They do not mention (one way or the other) if the value of private fringe benefits (such as company-provided health insurance) is included as 'income' or not. I suspect not - which would tend to reduce the effect described above.

That's what I wanted to know. I kind of figured as much, RE: paragraph one, but paragraph two (publically funded items) strikes me as a sore point in the statistic, as one of the reasons that the PPP is reduced in certain countries is exactly because of the publically-funded items.

I do wonder about private fringe benefits... how much, specifically, would it reduce the effect, aren't private fringe benefits (like health care) in the US pretty high? That ought to raise your lowest percentile up, I should think.

But then again, if you include state-funded benefits, that may have the same effect for the more socialist states there.

Like all statistics, it's hard to take out of context. At the very least, it does show that in terms of general consumer power, US (and Canadian?) workers have it much better than Europeans. Which is why everybody and his mother wants to go there, to make it big. (the US is still the leading labor export market for cheap Asian labor).

 

[Max_DC]

Imo it is not really a good idea to compare two different countries like the USA and Sweden. It simply doesn't work, because both nations are so different ( history, size of country, population, national rescources, etc etc ).

I don't think it is nice to be poor in the States, but if you are in the middle class or rich it is a fine country. Well I guess being rich is nice in every nation, but you know what I mean.
It is a very difficult subject since every nation can claim that their system works to a certain degree. There are advantages and disadvantages for example : It is rather easy in Europe to sit at home and get money from the government. Nice for lazy people, bad for the economy and for those who work hard. Hire and fire, oh well, again very difficult. It is ok as long as there are enough jobs I guess... Health system however is sth I don't like in America, same with the high rate of criminality. And there has to be a reason right ? I mean, in Europe almost nobody gets shot, only diehard criminals have weapons. I know so many police officers who worked 30 years and never fired their weapon. So, what I want to say is, that while the Scandinavian model or to a certain degree the middle european model is ot perfect, we live at least rather save and wealthy. Nobody has to have 5 jobs in order to survive, everybody has health insurence. And it is almost impossible to get shot... I mean, together with many many other reasons, the gap between the rich and the poor in the USA has to be reason, right ?

 

[ledhed]

I have an Income gap two days before payday , it seems every time I get paid there is always a two day gap..this every two weeks paycheck crap sucks ....

 

[FoolKiller]

this every two weeks paycheck crap sucks ....

But you get three paychecks in September.

 

[LeadSlead#2]

Imo it is not really a good idea to compare two different countries like the USA and Sweden. It simply doesn't work, because both nations are so different ( history, size of country, population, national rescources, etc etc ).

I don't think it is nice to be poor in the States, but if you are in the middle class or rich it is a fine country. Well I guess being rich is nice in every nation, but you know what I mean.
It is a very difficult subject since every nation can claim that their system works to a certain degree. There are advantages and disadvantages for example : It is rather easy in Europe to sit at home and get money from the government. Nice for lazy people, bad for the economy and for those who work hard. Hire and fire, oh well, again very difficult. It is ok as long as there are enough jobs I guess... Health system however is sth I don't like in America, same with the high rate of criminality. And there has to be a reason right ? I mean, in Europe almost nobody gets shot, only diehard criminals have weapons. I know so many police officers who worked 30 years and never fired their weapon. So, what I want to say is, that while the Scandinavian model or to a certain degree the middle european model is ot perfect, we live at least rather save and wealthy. Nobody has to have 5 jobs in order to survive, everybody has health insurence. And it is almost impossible to get shot... I mean, together with many many other reasons, the gap between the rich and the poor in the USA has to be reason, right ?

The whooooooooooole article went straight over your head.
I don't know about your "crime" thingy, I've never heard about Europe having so much less crime, in fact I've been lead to believe that it's worse.
I know cops who've never fired their weapon too.👍 Most around here don't. New York City is not America it's 17/300ths of America.
Most of America is small towns, spread out, in a geographical sense.

More importantly, what makes you think the poor are worse off in America? the article you just read stated otherwise, so if you disagree, please post a source now.

It is rather easy in Europe to sit at home and get money from the government. Nice for lazy people, bad for the economy and for those who work hard.

Do you think this doesnt exist in America?

In Europe almost nobody gets shot, only diehard criminals have weapons.

Unlike this post, I'll admit, I don't live in Europe, so I can't say firsthand what the truth is (if is) in this.
But I can say, how exactly are you an expert in American crime? And who believes almost nobody gets shot in Europe? Why do I see pictures of humvees riddled with bullets from AK-47's in Motor Trend?

I'll sit on that till I see more.....

👍 👍 Duke.👍 nice work:tup:

 

[Max_DC]

The whooooooooooole article went straight over your head.
I don't know about your "crime" thingy, I've never heard about Europe having so much less crime, in fact I've been lead to believe that it's worse.
I know cops who've never fired their weapon too.👍 Most around here don't. New York City is not America it's 17/300ths of America.
Most of America is small towns, spread out, in a geographical sense.

More importantly, what makes you think the poor are worse off in America? the article you just read stated otherwise, so if you disagree, please post a source now.

Do you think this doesnt exist in America?

Unlike this post, I'll admit, I don't live in Europe, so I can't say firsthand what the truth is (if is) in this.
But I can say, how exactly are you an expert in American crime? And who believes almost nobody gets shot in Europe? Why do I see pictures of humvees riddled with bullets from AK-47's in Motor Trend?

I'll sit on that till I see more.....

👍 👍 Duke.👍 nice work:tup:

I didn't really refer to the article, I don't know the author, but what I do know is, that you should be careful when reading statistics... of course this goes for both sides.

So what I want to say is, that comparing small scountries in Europe with the USA is very difficult and you can interprete statistics in a different way.

I don't know where to start, it is a very complex problem. Let's take the countless illegal immigrants for example. Taxes, prices etc etc alomst everything is different if you compare the Scandinavian countries and the States.

Crime rate : Well Europe is big and East Europe is not the middle of Europe.
Germany, Austria, Scandinavian countries, BeNeLux : I'd say it is safer to live these countries than in most places in the USA ( NY,LA,SF vs Berlin Stockholm Vienna etc, small villages are safe almost anywhere in the western world.)

I'm too tired to get to deep into all this now, the point is, that being shot in central Europe is almost impossible, of course you can go to the mafia, but whatever... I mean not just because of the income gap, there are so many other reasons, well, for example the small amount of firearms we have.

I am no expert in American crime and I don't get all my information from the internet, newspapers, TV etc

Ah I am really tired, maybe I post more tomorrow...

 

[ledhed]

Statistics are useless they can be used to prove anything .