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To: A. Pole; All
According to the Congressional Budget Office, from 1979 to 2001, the after-tax income of the top 1 percent of U.S. households soared 139 percent, while the income of the middle fifth rose only 17 percent and the income of the poorest fifth climbed just 9 percent.

Any economic analyses based on measurements of household income (as opposed to personal income) are meaningless. The single biggest factor in the stagnation of household income in lower-income groups has been the decline in size of U.S. households. Low-income households today are far more likely to be headed by a single parent than middle-income or upper-income households. And low-income households today are far more likely to be headed by a single parent than low-income households 25 years ago.

So the problem with stagnating income among these groups is not so much an economic issue as it is a social/behavioral issue.

19 posted on 09/20/2006 8:02:28 AM PDT by Alberta's Child (Can money pay for all the days I lived awake but half asleep?)
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To: Alberta's Child
Excellent point. There is also the fallacy of "groups over time": the "top 1%" of any group in 1979 was not the same group of people in 1980 - much less 1985 or 1990. Using quintiles or quartiles enhances the error, as people regularly move in and out of artificially-designated groupings. In terms of income, mobility is largely upward in the US, with lower-income people regularly replaced by new immigrants and young first-time workers.

Socialists love artificial statistics because they allow them to ignore real world observations. "Poor" people in the US tend to own cars, refrigerators, microwaves, entertainment systems, computers, etc., and live in heated apartments or houses. In Africa and Asia, "poor" people fight over scraps of food and live in mud huts. And there are many millions of them because their governments are dictatorships and their economies are socialist.

28 posted on 09/20/2006 8:14:56 AM PDT by andy58-in-nh
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To: Alberta's Child; A. Pole
The increasing economic inequality within the countries of these regions combined with the increasing economic inequality between these regions and the rest of the world has generated vast reservoirs of resentment toward the globalization process, toward the West, and especially toward that arch-promoter of globalization, the United States.

This statement is simply false, if we measure "inequality" as we should -- among individuals rather than among the average income in various countries. The latter method means that a tiny country where the average income has declined is weighed the same as gigantic China or India. The absolute number of people in the worst poverty (one dollar a day) peaked in 1980, and has been declining since; the percentage of people in the worst poverty has been declining for even longer. Individual income inequality -- measured by what economists call the Gini coefficient -- had been rising since the beginning of the Industrial Revolution, for the same reason that inequality in distance traveled rises at the beginning of a race before declining to zero at the end. The global Gini coefficient (which rises as inequality rises) reached its peak around 1970; it has been declining since. The combination of rising average income and declining global inequality is one we have never seen in human history, and it coincides quite nicely with the globalization era.

So the problem with stagnating income among these groups is not so much an economic issue as it is a social/behavioral issue.

You are right here, and you can add to that that many households are now single people with no children at all, people who used to live with their parents. That they can afford to live alone now is also part of the story. "Household income" is one of the least informative statistics the government publishes.

A final issue that as far as I know no one has studied is what Herrnstein and Murray notoriously called "cognitive stratification" -- the increasing tendency of people to mate with people very close to them in the cognitive distribution. Presumably, the more this occurs, the greater income inequality among their offspring will be. This may be a part, even a big part, of increasing income equality, not just in the US but in most industrial societies, but AFAIK (which, admittedly, is not very F) the literature never standardizes for this effect.

44 posted on 09/20/2006 8:27:38 AM PDT by untenured
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To: Alberta's Child
Any economic analyses based on measurements of household income (as opposed to personal income) are meaningless. The single biggest factor in the stagnation of household income in lower-income groups has been the decline in size of U.S. households. Low-income households today are far more likely to be headed by a single parent than middle-income or upper-income households. And low-income households today are far more likely to be headed by a single parent than low-income households 25 years ago.

I see where you're coming from, but the ratio between the income growth quoted for the top 1% and the bottom 20% is over 19 to one, and I doubt that rich households have 19 times as many people as poor households.

94 posted on 09/20/2006 10:56:38 AM PDT by Michamilton
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To: Alberta's Child
And low-income households today are far more likely to be headed by a single parent than low-income households 25 years ago.

Twenty-five years ago you were more likely to find households with one wage earner, now for most people in most areas, its commonly accepted that it takes two wage earners to support a family.

117 posted on 09/20/2006 11:55:51 AM PDT by lucysmom
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