Is Income Inequality Leading To A Crisis For Capitalism?

[kiwiman127]

Why have middle-class wages in the US stagnated since the 1970s while US productivity has doubled?

They haven't.

If you have a point, why do you need to use falsehoods?

Is it a falsehood? Facts show otherwise.

Chart 1 is the levels of income after inflation. (Census Bureau)
http://www.advisorperspectives.com/dshort/updates/Household-Income-Distribution.php

Chart 2 is the productivity levels. (Department of Labor)
http://www.bls.gov/lpc/prodybar.htm

 

[Uncensored2008]

Is it a falsehood? Facts show otherwise.

Chart 1 is the levels of income after inflation. (Census Bureau)
U.S. Household Incomes: A 43-Year Perspective

Chart 2 is the productivity levels. (Department of Labor)
Productivity Growth by Major Sector, 1947-2011. Bar Chart

The chart is utterly meaningless.

At minimum wage, how many hours did a person need to work to buy a new car in 1970? (Say the Pinto - $2,000)

At minimum wage, how many hours did a person need to work to buy a median priced 1500 sq ft home in 1970?

At minimum wage, how many hours did a person need to work to buy color television in 1970?

At minimum wage, how many hours did a person need to work to buy a gallon of milk in 1970?

When you get those answers, contrast it to the corresponding questions for 2011.

 

[kiwiman127]

Is it a falsehood? Facts show otherwise.

Chart 1 is the levels of income after inflation. (Census Bureau)
U.S. Household Incomes: A 43-Year Perspective

Chart 2 is the productivity levels. (Department of Labor)
Productivity Growth by Major Sector, 1947-2011. Bar Chart

The chart is utterly meaningless.

At minimum wage, how many hours did a person need to work to buy a new car in 1970? (Say the Pinto - $2,000)

At minimum wage, how many hours did a person need to work to buy a median priced 1500 sq ft home in 1970?

At minimum wage, how many hours did a person need to work to buy color television in 1970?

At minimum wage, how many hours did a person need to work to buy a gallon of milk in 1970?

When you get those answers, contrast it to the corresponding questions for 2011.

You do understand inflation adjusted income in Real Dollars (constant dollar) don't you?

 

[itfitzme]

Why have middle-class wages in the US stagnated since the 1970s while US productivity has doubled?

They haven't.

If you have a point, why do you need to use falsehoods?

Is it a falsehood? Facts show otherwise.

Chart 1 is the levels of income after inflation. (Census Bureau)
U.S. Household Incomes: A 43-Year Perspective

Chart 2 is the productivity levels. (Department of Labor)
Productivity Growth by Major Sector, 1947-2011. Bar Chart

You are, of course, correct in presenting actual data. The data itself is correct. Income data is available from the IRS and the Census Bureau. Productivity data is available from the BEA and Department of Labor. And, it's way easier when someone else combines it into a nice graph. Thank you for posting them.

You present objective data. Someone replies with opinion, changing the subject from the data to you. At that point, the subject changes from objective positive economics to the psychology of dysfunctional reasoning. What they post is all they know. They don't have anything more to present than simply, "They haven't." That is it.

The only question you have to ask yourself is "What good is the response to me?"

 

[usmcstinger]

What source did you use to make your statement? Income redistribution is a key element of Socialism and Communism. How have those types of government done?

Too many settle for the jobs they are in and then complain. People who do well have a strong work ethic, willing to sacrifice, get a good education and / or learn every thing they can about the business they want to start or join. Those who do not do this have no one to blame but themselves.
I was middle class and was able to double my salary within 9 years.
Stop the complaining and better your self. It is not the job of government to do it for you.

 

[itfitzme]

Point out the direct connection between productivity and job creation that capitalism provides.

its very very simple really. The more productive workers are the more they must be paid [thanks to competition], the more they can buy, and the more jobs created to supply them.

Why have middle-class wages in the US stagnated since the 1970s while US productivity has doubled?

1900 was the beginning of the age of mechanization which has resulted in continuous improvements in efficiency. In 1940, a bit less than ten percent of the labor force could produce enough food for everyone. By 2010, one percent of the workforce could produce enough for everyone.

The same thing is true across all markets. This is apparent, even at the grocery store, where fewer cashiers are needed. Mechanization had improved efficiency to a level that there is always an excess of labor.

It is very very simple, really. Over all, the competition for jobs in the labor market have continued to drive wages down.

The data is available from the BLS at ftp://ftp.bls.gov/pub/special.requests/lf/aat1.txt

I posted a longer version of this at Agricultural Efficiency 1940 to present: Quick Data « Itfitzme's Blog

 

[ilia25]

What source did you use to make your statement? Income redistribution is a key element of Socialism and Communism. How have those types of government done?

Income is being redistributed in every single modern country. That is not what brought down the USSR.

 

[Uncensored2008]

I understand that this is awfully hard for a conservative, but could you at least entertain a possibility that we are not living in 18 century anymore?

Can you entertain the idea that this isn't 1917 in Moscow?

 

[ilia25]

I understand that this is awfully hard for a conservative, but could you at least entertain a possibility that we are not living in 18 century anymore?

Can you entertain the idea that this isn't 1917 in Moscow?

You must be fool if you think that rising top marginal rates was on Bolshevik's agenda.

 

[Uncensored2008]

That is a total bullshit -- a notion that increasing government spending by $1 always reduces private sector spending by $1.

Government spending has a geometric impact on productive spending by the private sector. $1 spent on "stimulus' by the government will reduce private spending by about $4.

Why? Because to pump $1 into the economy by the government costs about $4. We need to pay politicians and media demagogues to create and hype increases. We need to bribe public sector unions to motivate the public sector workers to action. We need to pay a thousand agencies from the tax collectors to the ones doing impact studies on how spending increases affect the sex lives of tutsi flies in Bora-bora. Then the funds for 98% highest paycheck pensions after 20 years of service. So to pump $4 trillion in "stimulus," $16 trillion needs to be extracted from the private sector.

No worries though, we'll just borrow it so no one can trace the crumbling economy back to the deficit spending.

That may be true in boom times, but not in a recession, when private sector cuts on spending in order to reduce its debt. There are tons of idle capital in the economy.

That is the most idiotic thing I've ever heard - even from a leftist.

No, there is NOT idle capital in the economy. When you pay Paul, you ARE robbing Peter.

That is why it the government can stimulate the recovery by borrowing those idle money and spending it.

Hmmm, funny that all the borrowing didn't actually stimulate the economy, then.

Do you know who John Maynard Keynes was?

Nah, of course you don't...

 

[Uncensored2008]

You do understand inflation adjusted income in Real Dollars (constant dollar) don't you?

You do understand purchasing power per hour of labor, don't you?

 

[uscitizen]

Is Income Inequality Leading To A Crisis For Capitalism?

Yep.

If the masses cannot afford to buy the products...
Not to mention riots, etc.

 

[Uncensored2008]

SNIP
It is very very simple, really. Over all, the competition for jobs in the labor market have continued to drive wages down.

Ahh.

That explains why people live in smaller homes, own less TV's, cars, designer shoes and eat out less than they did in 1970.

You leftist sure are smart.....

 

[sealybobo]

What source did you use to make your statement? Income redistribution is a key element of Socialism and Communism. How have those types of government done?

Too many settle for the jobs they are in and then complain. People who do well have a strong work ethic, willing to sacrifice, get a good education and / or learn every thing they can about the business they want to start or join. Those who do not do this have no one to blame but themselves.
I was middle class and was able to double my salary within 9 years.
Stop the complaining and better your self. It is not the job of government to do it for you.

Income distribution is a key factor in capitalism too. Whenever the gap between the rich and poor becomes too wide, the system falls apart. Unregulated free market capitalism has produced horrible results. It caused the Great Recession and the Great Depression. FDR's New Deal and Obama's Consumer Protection Department headed by Elizabeth Warren are two great democratic programs that allow us to remain a capitalist society but also protects the citizens from the free market capitalists who want to pit the American middle class against chinese and mexican wages.

 

[Uncensored2008]

You must be fool if you think that rising top marginal rates was on Bolshevik's agenda.

The 10 planks of the Communist Manifesto, per Herr Marx

1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.
6. Centralisation of the means of communication and transport in the hands of the State.
7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c.

 

[Uncensored2008]

Is Income Inequality Leading To A Crisis For Capitalism?

Yep.

If the masses cannot afford to buy the products...
Not to mention riots, etc.

Yep, the "masses" have less than ever..

Look at all those emaciated Americans, starving for want of a decent meal....

You leftists sure are smart.....

 

[usmcstinger]

Name every country that uses income redistribution. Please provide a viable source that backs your statement. Cuba is a communist disaster. European Socialism and the Nanny State has really worked out well?

 

[ilia25]

You must be fool if you think that rising top marginal rates was on Bolshevik's agenda.

The 10 planks of the Communist Manifesto, per Herr Marx

1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.
6. Centralisation of the means of communication and transport in the hands of the State.
7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c.

Progressive taxation looks equally out of place in the communist manifesto. If there are no people earning high incomes (and there were none in USSR), then why would you even worry about their tax rates?

On the other hand, every modern country has a progressive tax system, including the US, they bear little resemblance with a communist hell.

 

[Uncensored2008]

Progressive taxation looks equally out of place in the communist manifesto.

That's because as is the case with most leftists, you have no grasp of the source of the slogans you chant.

If there are no people earning high incomes (and there were none in USSR), then why would you even worry about their tax rates?

There was no income disparity in the USSR?

You make up some interesting facts.

On the other hand, every modern country has a progressive tax system, including the US, they bear little resemblance with a communist hell.

Progressive taxation has it's roots in Marxism. Confiscatory taxation has it's root in stupidity.

 

[EdwardBaiamonte]

Point out the direct connection between productivity and job creation that capitalism provides.

its very very simple really. The more productive workers are the more they must be paid [thanks to competition], the more they can buy, and the more jobs created to supply them.

Why have middle-class wages in the US stagnated since the 1970s while US productivity has doubled?

Its very very simple really. There is no stagnation but problems having a lot to do with liberal anti-business policies and a billion or so new workers competing with them plus the end of the virtual business monopoly we enjoyed after WW2 as the only economy left standing.