http://www.boston.com/business/articles/…
The gap between rich and poor has widened substantially in Massachusetts over the past two decades, according to a new study by the University of Massachusetts. Only those earning the highest incomes benefited from gains in technology, productivity, and globalization,
Someone please tell this to my $10/hour fulfillment folks, who listen to iPods, talk on cellphones, and surf youtube during their lunch breaks.
“Our economy remains very productive, but it shares the gains with only a small slice,” said Rebecca Loveland, a coauthor of the study and research manager at the UMass Donahue Institute, a research and economic development unit of the university.
“It” “shares” “the gains” ?
Huh?
Look, “our” economy did not become larger, and then “decide” where to allocate the profits.
Certain individuals started creating more value, and they then took home some (but not all) of that increase in value in their paychecks.
Period.
End of story.
That, plus the fact that income quintiles are as much about individuals moving through the quintiles as they age, as they are about different people each in separate quintiles, and this becomes another non-story that’s obfuscated in very specific ways in order to generate very specific policy proposals.
…proposals which, in enacted, would slash the standards of living of everyone.
As highly paid, highly skilled workers spend, prices can rise across the board, putting most of the squeeze on lower-income groups.
Prices for everyone have deflated over the last two decades, but for the poor especially, thanks to globalization, Wal-mart, etc.
When the rich bid up the price of a piece of art, or a lot on Martha’s Vineyard, this really isn’t affecting the price that the poor pay for a 24 pack of muffins at the Wal-Mart bakery, or six pounds of ground beef and a 50 pound sack of rice.
…however, things like government ethanol programs, wasteful spending on New Orleans “victims”, etc. certainly are helping to raise prices on the things that the poor buy.
Annette Jones, 60, of Dorchester, earns $25,000 a year as a receptionist, but had to pay more than $1,500 a month to get an apartment big enough for her and two children. Her 18-year-old daughter is autistic and receives disability payments, which helps Jones make ends meet.
But that’s getting harder to do, Jones said. A divorced single mother…
Questions:
- who initiated the divorce?
- has she looked for a job in a new location, where rents are cheaper?
- what new skills has she taught herself over the last four years to help her get a higher paid job?
She’s squeezed her food budget by buying in bulk, has cut out roller skating trips with her children, and expects another winter with the thermostat set no higher than 65 degrees.
Oh, boo hoo.
This is basically my childhood, which was basically middle class and basically pleasant: house always a bit cool with kids wearing sweaters, very very few thrills (we got a take-out pizza perhaps twice a year, and began eating one meal out at restaurants per year when I was about 13), etc.
“Everything is going up except my paycheck,” she said.
That, and her creation of value, which is likewise identical to what it was five years ago.
and…hey, wait! … these two facts are not unconnected.
Certainly, said Loveland, many people move up the income ladder, but it’s unlikely income mobility has increased as fast as inequality. Those at the bottom also have much further to go.
In 1979, for example, the inflation-adjusted median income for the bottom 20 percent was about $21,000, compared to $130,000 for the top 20 percent, a difference of $109,000, according to the UMass study. By 2006, the gap had grown to $156,000 as earnings at the top of income scale grew to about $176,000, but fell to $20,000 at the bottom.
Oh noz!
Inequality is “worse” because … wait for it … incomes of $176,000 are now available not just to the top 5% of the population, but to the top 20% of the population.
Seriously, think about that:
Imagine if one person in a thousand has a private spaceship. Meaning that the top 200 people have, on average, 1/200th of a spaceship each.
Then, because of hard work, technological change, etc., we get to the point where 200 people in a thousand have private spaceships. Meaning that the top 200 people have, on average, 1 private spaceship each.
According to the academic Loveland, this is horrible because inequality has just gotten worse: the gap between the bottom 80%, who have 0.0 spaceships, and the top quintile has grown from a delta of 0.005 spaceships by a factor of 200 to a huge gap of 1.0 spaceships.
Idjit.
Andrew Sum, director of the Center for Labor Market Studies at Northeastern University, said there’s increasing danger the gap will widen.
Why is a gap of, say $80k/year between top and bottom quintiles perfect, and a gap of $150k/year not so good, and a gap of $250k/year horrible?
It seems to me that the ideal might be a gap of $1 million per year: the bottom quintile are free to not work at all, and get all the protein pap they want out of a dispenser, and all of the information-pap they want from the MSM, while at the high end, the top quintile produces $1 million of value per year.
Why is that a danger?
Of particular concern, he said, is the increase in the number of single-parent households
Who creates single-parent households?
Does the government go around at gun point forcing families to divorce, and/or forcing single women to have sex with out birth control, have kids, and keep them?
No.
Every single parent household is created by at least one decision of the principles involved, often more.
which typically earn much less than those with two parents and have a far more difficult time moving up the ladder.
Oh, boo hoo.
This is like saying that “inequality in driving outcomes has increased over the last two decades, because of the number of drivers who don’t wear seat belts and clutch steak knives to their throats as they do 70 mph down residential streets … and this inequality must be addressed by government programs that take cash from the families of those who drive safely and redistributing it to those who drive with steak knives”.
Look, here’s a radical idea:
don’t do that.
Don’t drive with steak knives held to your throat.
Don’t get pregnant outside of marriage.
Don’t get divorced.
Don’t stagnate in your job.
Always be learning.
Always be growing.
Always aspire to be richer than you are.
…which means aspiring to be more productive.
Ask your boss “how can I deliver more value here, so that I’m worth more money”.
If he doesn’t have a compelling answer, go ask someone who is not yet your boss “how could I deliver more value here, if I hopped?”
Gah.
This isn’t rocket science.
