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Sultry in Seattle
03:11 PM on 07/30/2011
I wonder if movement on the graph is related to the beginnings of today's globalization, the rise and use of communications technology, and increased efficiency through the introduction of workforce technology which would lessen the need for certain types of employment.
Aj Beamish
More human than you, man.
03:21 PM on 07/30/2011
It would need to show unemployment numbers for that (lessen the need for certain types of employment). The graph shows wages of the guys running the show as compared to the guys that actually do the work on the show.
03:49 PM on 07/30/2011
It coincided with Reagan becoming president and cutting taxes on the wealthy in half, raising taxes on the middle class 11 times, and making it easier to make money by investing in Wall Street then growing a business.
01:03 PM on 07/31/2011
You are either too young or terribly uninformed. I remember Ronald Reagan. During his presidency, when the Cold War was still going, interest rates went down, inflation went down, taxes went down (to 28%), unemployment went down, the price of gasoline went down, the Democrats went down (twice), the USSR went down and the US economy and dollar went up. When he left office, the national debt was only $3.2 trillion as compared to $14.5 trillion today. We were proud to be Americans.
02:57 PM on 07/30/2011
The wealthy always make more than they spend. That is why they are wealthy. The poor always spend all or more than they make. That is why they are poor. So we are now in a situation where the wealthy don't see any investment opportunities because the lower and middle classes have already been squeezed for everything they are worth. Solution: get rid of the payroll tax. Let the government run a deficit until the lower and middle class balance sheets are in a healthier state.
Aj Beamish
More human than you, man.
03:27 PM on 07/30/2011
"The poor always spend all or more than they make. That is why they are poor."

Wages have stagnated, rent has gone up, electric has gone up, food has gone up. They really don't have much of a choice but to "spend" to stay alive. You make it sound like poor people are irresponsible loathsome squatters who refuse to save the 60 cents they have left over every month after paying their bills. Right now the wealthy are wealthy because they are taking more than they make and not paying the people that are helping them make it a decent wage. The wealthy are wealthy because they've bought and paid for every government across the globe and set the rules up in their favor.
05:41 PM on 07/30/2011
I think we are saying the same thing. My point was that if you give tax cuts or subsidies to the wealthy they will just save it. So if the government runs a deficit that primarily benefits the wealthy it does not do much to increase demand. But if you run a deficit that benefits the lower income groups it will increase demand a lot.
02:55 PM on 07/30/2011
"Full unemployment delivers more broad-based gains, and this feeds back into longer, more durable, and just plain better recoveries."

"Full employment", maybe?
02:36 PM on 07/30/2011
What I find missing in this analysis is any reference to education, skill level or
innovation. The increased slope for the top began in l993, the year Congress
capped deductible executive pay at $1 million! That began the explosion in
stock option grants to bypass the cap. Add the internet boom and you have an
instantaneous growth of wealth at the top. There was no nefarious plot to
harm the middle or lower groups nor were they abused or oppressed in order
for the top to do better. Standards of living increased and the massive expansion of credit was exploited by all. The housing collapse ended the
growth and those at the bottom were hit the most. The current problem
is that the education and skill level at the middle has not shown a major
advance and high unemployment is keeping wages low. Again no nefarious
plot, just the law of supply and demand in action. In no way am I defending
Bush's profligacy or presidency, but ironically most of the policy and regulatory changes leading to the housing bubble and collapse and the income disparity occurred under Clinton. I think the only way to save ourselves is to permanently
close D.C.
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Gold standard = four paws and a tail
03:07 PM on 07/30/2011
Way too much common sense for this site. Timothy Noah wrote a series of ten articles in 2010 collectively titled "The United States of Inequality." His exhaustive research bascally agrees with your post.
Content publisher for small business marketing
04:41 PM on 07/31/2011
As many have pointed out before, Clinton was the best Republican president since Eisenhower. The problem that many seem to miss is that being poor is a very expensive way to live. The potential problems that can occur when there are few resources to fall back on makes for a tougher road to hoe. The middle class is finding out that their available resources are also diminishing with each decade. This means less employment opportunities, less working capital, less savings, less chances for advancement.

As the saying goes, it's hard to pull yourself up by your bootstraps when you no longer have any boots.
02:08 PM on 07/30/2011
Whoever God is, God loves diversity and he loves balance. For every action there's an equal and opposit reaction. One side of the equation equal the other side of the equation. Atoms are balanced. So when income gets out of balanced guess what the natural rules of the Earth gives us? It'll try to pull it back together again. The Great Depression saw the largest inequality gap of all time and the market collapsed. The rich tried getting richer and richer, stock market went back up, and then it crashed again and finally the American people voted to redistribute the wealth from the top to the bottom. It took until the 1940s to creat the balance but once balanced the economy took off. Middle class and upper class saw their wealth grow. The earth likes balance. Everything around you, everything you know says so. Earth also treats kindly those who give more than they take.
01:59 PM on 07/30/2011
Would somebody explain how the percentile lines could cross each other in this graph? My reasoning is that the 10th percentile must always have a lower index than the 95th percentile otherwise it wouldn't be the 10th percentile. I'm thinking the wage at which 10% of the population earns no more than is the 10% percentile. The wage at which 95% of the population earns nor more than is the 95th percentile.
12:41 PM on 07/30/2011
There is much truth in this, but also bad data. It's been known for a long time that for many wage earners, there is a zero-sum tradeoff between wages and benefits. In other words, workers readily accept higher benefits (e.g., health insurance employer-paid) in exchange for smaller wage increases, and the tax code favors this. These comparisons should really use total compensation, not wages.

Nevertheless, the fact remains that inequality is growing unacceptably.
Daniel Hazelwood
Free speech sure has gotten expensive.
06:12 PM on 07/30/2011
To bad benefits aren't increasing... when was the last time you ever saw 100% paid health care from your employers? Those benefits are shrinking as well.
01:05 PM on 07/31/2011
It is exactly that kind of unrealistic expectation that brought this Country to where it is today!
Citizens, Unite!
12:07 AM on 07/31/2011
If the graph measured benefits it would show an even faster decline than wages.
12:19 PM on 07/30/2011
I think your hypotheses are correct. In fact, they are no-brainers. The trouble is the Democrats continue to do a piss poor job of messaging. They cower at charges that progressive taxation is "class warfare." I am sure when you run the models you will find that changes in tax rates explain more of the variability than any other explanation. You must have progressive taxation in a capitalistic society because the benefits will always go disproportionately to those with the most capital. We just have find the right marginal rates to ensure our economy functions at its maximum capability.
Do no harm, Help others.
08:02 AM on 07/31/2011
Indeed. Also many of the tax changes were written by corporate lobbyists and given to their minions in Congress. The article is correct. While the top retains more, it naturally becomes detrimental to the middle and bottom, causing the economy as a whole to stagnate.

Content publisher for small business marketing
04:49 PM on 07/31/2011
Under Eisenhower, the top tax rage was 90% on income above 3,000,000. Kennedy/Johnson closed many of the loopholes left open during the Eisenhower administration and lowered the rates. One thing we need to understand is that our society is not free. We have to pay for our stay and therefore taxes in all forms are necessary for our social survival.
12:15 PM on 07/30/2011
These days, there seems to be a gross (willful) misunderstanding of what makes up a functioning economy. First, people in the general population, need money or resources if they are going to participate in the economy. If only one person, or 1% hold all of the wealth--well that is not a modern economy at all. Actually, that system would be called a fiefdom--presumably not something Adam Smith would have admired. Second, greed can be defined as the excessive desire for more, disproportionate to actual need. Self-interest is one thing, and there is a healthy aspect to that, of course. But greed is pathological in nature and ultimately self-destructive. Third, there is no such thing as a healthy offshore economy. Corporate greed in America is producing a centrifugal effect on the economy. An economy based on exploiting the differential between international labor costs will not sustain the American economy--no mater how many painted unicorns Thomas Friedman offers. Global corporations and wealthy individuals are capturing and dissipating our national wealth, making it impossible to generate a creative, entrepreneurial and vital economy here at home. In contrast, a centripetal American economy would be based on the “self interest” of society as a whole. It brings greater wealth toward itself--like every successful corporation. But it circulates the wealth widely an therefore empowers the broadest number of ambitious individuals to create jobs. The people will create the jobs. They always have.
becky bradshaw
"In a time of universal deceit, telling the truth
09:32 AM on 07/30/2011
Sun-girt City, thou hast been
Ocean's child, and then his queen;
Now is come a darker day,
And thou soon must be his prey.

P.B. Shelley
Sultry in Seattle
02:59 PM on 07/30/2011
Great poem!
08:48 AM on 07/30/2011
The "job creators" don't really want to create jobs they want to create wealth, for themselves. The higher the jobless rate the more leverage they have to suppress wages and thus maximize there own profits. Business creates jobs but unions create more jobs and spread the wealth to more individuals and families. As they say, proof is in the pudding.
12:31 PM on 07/30/2011
Providing jobs through capital investment is how most wealthy people get where they are. And, if they are smart, they will continue to invest and create new jobs.

Sure, they're out for themselves, but in the process, others are winning, too.

As for unions, they don't create jobs. They simply create more burden on employers. The Rust Belt is a testament to that.
02:58 PM on 07/30/2011
Explain Germany.
Citizens, Unite!
12:11 AM on 07/31/2011
These so-called "job creators" were the very people who laid off one out of every nine wage earners two years ago. There are no "job creators" in America. It is a myth.
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08:08 AM on 07/30/2011
if you make $1,000,000 in a year you get

$114 per hour ..ever hour of ever day of the year

$19230 per week

$83333 a month

my point is those that make these amounts of money can afford to pay some hefty taxes and still have more than enough left for their million dollar homes..not home but homes..BMWs mercedes...ect ect ect....

yet the gop thinks they shouldnt have to pay anything what so ever...
Sultry in Seattle
03:04 PM on 07/30/2011
The majority of the people voting for the GOP make less than $70k per yr. The problem is that the billionaires at the top spend a ton of money convincing the middle and lower middle classes that their hardhsips are caused by liberals, sociolists, gays, and immigrants who are out to spend their tax dollars. The harder it gets for the middle the more they close ranks and point fingers at the wrong people. Its great propaganda.
10:53 PM on 07/30/2011
Perfectly correct. When is the revolution scheduled, I don't want to miss it...
01:13 PM on 07/31/2011
Here is something for you to consider. How much someone else makes is none of your business and it's not the government's business. Just because someone is industrious you have no right to force them to pay disproportionate taxes. According to the IRS, even with the Bush tax cuts in place, the upper 10% income brackets (the rich?) pay 71% of all Federal income taxes. The bottom 47% of income brackets (the poor?) pay ZERO Federal income taxes. The remaining 43% of income brackets (the middle class?) pay 29% of all Federal income taxes. Who is not paying their fair share? How can we continue to be a free and democratic society when a small percentage of the population have to carry the cost of the entire society, while the majority get most of the "entitlements"?
02:04 PM on 07/31/2011
And just what do we call subsidies, BLM auctions wherein lands with proven oil reserves under them are sold at $125 an acre (and would've been sold at $12 an acre had a truly patriotic person not intervened), etc. These are not 'entitlements'? The reaction from the wealthy when such things are threatened sure looks to me like they feel 'entitled'.
Content publisher for small business marketing
05:00 PM on 07/31/2011
Here is something for you to consider. How much someone makes in America is based on the amount of resources they are able to utilize. Those resources are regulated and protected by "We the People". If someone feels that they do not hold allegiance to this country and is not willing to pay their fair share, they should leave and go elsewhere to live. Capitalists do not employ people, they use money to make more money. Industrialists and entrepreneurs employ people to increase production to meet demand. Without demand we do not ever seek to employ more people.

Wealth has very little to do with industry. The hardest working people in this country will never see a million dollars in their entire life. Instead of denigrating the working people of this country why not seek ways to elevate the income of the rest of the 90% so that they can have the pleasure of paying more Federal taxes? By the way, I'm a real job creator because I employ people to produce something of value for my clients.
07:48 AM on 07/30/2011
It's interesting that you have not shown the 60% or 70% line. Was this deliberate because it would clearly show that only the top 20% of this country has benefitted from Republican policy since 1980.
07:41 AM on 07/30/2011
The graph also repudiates the claim that Americans did great during the Reagan years. It's clear from the graph that wages during the Reagan years for the bottom 50th percentile actually fell; that wages for those above the 50th percentile rose slightly; and, that a significant upward trajectory of wages for all workers didn't begin until about 1993 - more than four years after Reagan left office.
A poor old country mouse.
07:22 AM on 07/30/2011

The graph which informs your comments is deserving of study. Several questions come immediately to mind:

1. The selection of 1973 as the initial year in effect 'normalizes' wages at that specific point. To what extent does this affect the distribution? In other words, what would be the effect of setting 1980 as the initial year? 1985? 1990?

2. The time period 1970-1980 warrants more study, seeking specifically those factors which would cause the fanning out of the distribution in later years.

3. Your comment regarding the effect of full employment vs. distribution, "... and especially lower unemployment was inequality-reducing," can be tested by the data.

4. The period 1996-2002 was a period in which there was little spread in the existing distribution. [Setting 2002 as a starting point will demonstrate this graphically.] What were the characteristics of those years? What were the changes in factors in the year(s) immediately preceding 1996 which stopped the increase in the spread?

You are quite right, by the way, in noting that there is much work to be done in understanding the forces which have driven [and are driving,] the graph's data. It would be nice to know that someone has decided to do this.