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Forums - Politics Discussion - What REALLY is causing the Gini coefficent increase in the United States.

It might surprise you... what's interesting is looking at a graph of all 3 measured gini coefficents.

 

What's interesting is that INDIVIDUAL Gini coefficent is actually LOWER then it was in 1994... while the other two are higher.

 

In otherwords, when talking about individuals, the rich haven't gotten richer in gini coefficent numbers.  Only when put into the context of households or families is this the case.  In fact, according to the gini coefficent, that number is shrinking. (slightly.)

 

What has changed since 1994?  More single parent families, more dual parent families and people marrying far more often in their "economic bracket".

Single parent families are more likely to be poor, essentially by splitting them up into a case of "two".

Lets say you take a gini coefficent reading of eight couples who each make 50,000.  Your gini coefficent would be 0.

Now lets say two of those families gets a divorce, now you have two households who make 25,000 and six that makes 50,000. 

Your new household gini coeffcient is .375.  Even though everyone is actually making the same amount of money as before.

 

It's plain to see where dual earner families come in, essentially they increase gini coefficent by the opposite result.  They lower the number of households while increasing said household's wealth. 

While marrying within your own Class, well that's obvious again.  

Two couples, both make 10,000 a year, but they decide to swap partners, one problem though... they weren't making equal salaries.  So instead of 10,000 you've got the "rich" couple bringign in 8,000 a piece at 16,000 while the poor couple only comes in at 4,000.



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spurgeonryan said:
I hope to totally understand this by the time this thread gets to 30 posts. Are you saying that across the board everyone is getting poorer? Is that what I got out of the gini coefficient which I have only heard of before in the Homeless thread.


oooh, no it's nothing like that at all.

The Gini-coefficent is a measurement of income inequality in a country.

The closer the number is to 0, the closer were to everyone earning the same amount of money.  (Whether it be high or low is irrelevent.)   The closer it is to 1, the more likely it is that 50% of the country own all the wealth, and the other 50% have absolutely zero money.

 

Essentially the Ginicoefficent between indiduals has shrunk.  Which means treating everyone as their own person, fathers and mothers as seperate etc, income inequality has shrunk.

When taken in the context of people living under the same roof, or families, it's grown.

So the current driver in income equality isn't due to the rich getting richer so much as the rich, marrying richer, single parents being on the rise and the rise of the dual income worker. 

Although part of the rich are getting richer,  really when it comes to income equality the bottom 50% and top 1% are actually both doing well.  With the 49% of the top being the ones getting "screwed."



BasilZero said:
The last sentence is bothering me a bit, couple swapping and 10,000-16,000 earnings considered rich...? Is that just an example or....o.O.

10,000 would be considered rich in a lot of countries.  In Afghanistan per capita income is $909.

Though yeah it was a theoretical example of a society of 4 people with a total GDP of 20,000.

Which is another thing to note about the Gini coefficent, it only measures relative wealth.

If everyone in Afghanistan made $909, they'd have a lower gini coefficent then us.  (It'd be 0 actually.)



It makes sense. As it stands, single parent households (which have increased astronomically in the US) are the leading indicator of poverty in America. Ergo, the more there are, the more families (mom + child) are in poverty.

Given the fact my wife and I just had a child, it makes too much sense. Having a child is a HUGE undertaking. I cannot fathom how a single mom could do it, and maintain any modicum of economic opportunity. Comparatively then, you have families which are vastly more stable and secure in maintaining a decent income - as you'll generally have a husband that can work and advance his career significantly, while the woman can maintain child rearing and a strong household, ensuring finances aren't being spent on tasks that are outsourced to others in single parent families (food, nursery, ect). Those things can really add up and destroy wealth, as the monies are transferred to others as low-income jobs.



Back from the dead, I'm afraid.

Oh, and here are some charts for marriage and GINI co-efficients:

 

And marriage rates:

 

 

The interesting thing I didn't think of is that the south has the highest concentration of low marriage rates in the country. I always assumed that due to values, it'd be higher. Instead, its not and correlates notably with its poor GINI track record.



Back from the dead, I'm afraid.

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mrstickball said:

Oh, and here are some charts for marriage and GINI co-efficients:

 

And marriage rates:

 

 

The interesting thing I didn't think of is that the south has the highest concentration of low marriage rates in the country. I always assumed that due to values, it'd be higher. Instead, its not and correlates notably with its poor GINI track record.

 

The Gini coefficent map made me remember the other big gini coefficent issue.  Illegal Immigration, hence why Texas' gini coefficent is so high despite marriage being at good levels.



Kasz216 said:
mrstickball said:

Oh, and here are some charts for marriage and GINI co-efficients:

 

And marriage rates:

 

 

The interesting thing I didn't think of is that the south has the highest concentration of low marriage rates in the country. I always assumed that due to values, it'd be higher. Instead, its not and correlates notably with its poor GINI track record.

 

The Gini coefficent map made me remember the other big gini coefficent issue.  Illegal Immigration, hence why Texas' gini coefficent is so high despite marriage being at good levels.


Right. If your adding high amounts of unskilled labor, your going to create more inequality. Probably one of the secret reasons behind lower inequality among contries with a very homogenous populace.



Back from the dead, I'm afraid.

mrstickball said:
Kasz216 said:
 

 

The Gini coefficent map made me remember the other big gini coefficent issue.  Illegal Immigration, hence why Texas' gini coefficent is so high despite marriage being at good levels.


Right. If your adding high amounts of unskilled labor, your going to create more inequality. Probably one of the secret reasons behind lower inequality among contries with a very homogenous populace.

Well skill level is actually irrelevent anyway.  One of the saddest things about illegal immigration is all the children of illegal immigrants who go to college (More soon thanks to some of the DREAM acts put in place.)

Ones that weren't born here that is.   They go to college expecting a better life like everyone else, but you can't get a real job without a social security number.  So they end up getting big expensive degrees... and working with their parents in whatever illegal alien under the table work they are doing.  Not many under the table proffessor jobs or nuclear engineers or anything involving a degree.

It's why basically anyone with any common sense should be against the Dream acts.  It's diverting money from degrees that actually could have uses, to degrees that are nothing but a waste of money... even from an employment point of view.

You'll see the college degree unemployment rates rise because of this eventually.