Julian658 wrote:The income gap is a poor method to asses poverty. Choosing the top 1% to determine or analyze the fortunes of everyone else makes no sense. Next to Bill Gates or Jeff Bezos I am dirt poor, but there are very few Bill Gates and Bezos in the world. This is a very unrealistic standard of reference. What matters to me is that my standard of living is rising. I could care less than billionaires make more than I do.
Furthermore the income of the rich increases more than the income of the poor even if the poor are earning more than in the past. Simple math can explain this.
How about this example:
Person A earns 100K a year
Person B earns 10K a year
That is an income gap of 90K
Put another way, this is a gap of 900%.
Both get a 10% salary increase and now:
Person A earns 110K a year
Person B earns 11K a year
That is an income gap of 99K
If we put this the same other way, this is still a gap of 900%.
Even tough the rate of growth is the same for both the income gap widens.
But, put in the other way it didn't widen. It is still 900%.
But, what really matters is that the person earning 10k now earns 11K. He has improved regardless of how the rich person did.
However, here you are calculating the dollar amount of the gap. The graphs you were responding to were not in dollar amount. They were in percentages. That is, they were done in the other way way I just used above.
. . Your calculations showed that the percentages stayed the same when both got a 10% increase. But, the graphs showed that the percentages DID NOT stay the same.
. . Therefore, your reply proves the opposite of what you wanted to prove.
I get it! People pay more attention to relative poverty than absolute poverty and this causes a lot of stress for the poor.
Your calculations, also, assumed that there was no inflation or that your income numbers were adjusted for inflation. However, there was inflation. This is one reason thinking of the gap in percentage terms makes more sense.
The current systems of calculating inflation are not accurate. Inflation is really higher for workers than the official number. So, when inflation adjusted incomes are flat for 3 decades, it really means their real incomes have done down for 3 decades.
. . I'm guessing that you, personally, earn in the top 10% to 20% of incomes. That slice of the income distribution has seen its incomes go up slightly for the last 3 decades {even when we leave out the top 1% who's incomes are so huge it skews the data}. So, if my assumption is correct, then your personal income has gone up faster than inflation.
. . You said there you don't care if a few billionaires got much more as long as you do better. What you don't see is that
you are not typical. At least 60% of households have seen their living standards fall for 3 decades, if we leave out the increase in debt they have accumulated. For example, student loans are debt that a family has now that it didn't accumulate 30-40 years ago.
. . Growing private debt is not sustainable. There is a mathematical reason that it must keep growing. If aggregate growth in debt stops growing {but does not fall} that means spending starts falling, which means GDP growth stops growing and starts falling, which means layoffs, which means income loss, which means more GDP loss, which means a recession and a Depression if the Gov. doesn't step in and spend to stop it.
With all due respect, you said that you don't care if billionaires do great as long as you see an improvement. Is it fair for me to say that you also don't care if 60% of house holds have gone backwards as long as you see an improvement? [I think maybe not, but maybe.]
. . I know, you didn't think they have gone backwards. You believed the lies that economists tell you. Well, open your eyes. I'm telling you that 60% or more of households have gone backwards for 3 decades. Can you see now that they have gone backwards? And then, do you care?