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HappySqurriel on 15 April 2011
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mrstickball said:
Rath said:
HappySqurriel said:

Honestly, income disparity is a poor way to measure fair outcomes in an economy. Supposing the purchasing power per dollar is the same in both scenarios which is a more desireable outcome:

  • A "poor" household earns $25,000 per year, a typical (mean or median) household earns $100,000 per year, and a "rich" household earns $400,000 per year.
  • A "poor" household earns $15,000 per year, a typical (mean or median) household earns $30,000 per year, and a "rich" household earns $60,000 per year.

    • While the households in scenario 1 are all better off than their equlivalents in scenario 2, the focus on more equitable distribution would lead people to choose scenario 2.

     

    We should be discussing how we can grow the economy to ensure that the standard of living of everyone within the economy improves as much as is possible; not discussing how to create an economy where the realitive reward of success is minimized.


    Or a middle ground. Why do people only assume that one of two extremes can be chosen.

    Clearly income disparity should not be the only measure, or even the most important measure. Far more important are things like the standard of living for the lower income groups.

    The problem with income disparity though is that its effect is to reduce the standard of living of the low income groups by concentrating the wealth in the high income group - wealth within a society is a finite resource and a pool of it in one place does mean that there has to be an lack of it elsewhere.

    Rath,

    The real question shouldn't be that it reduces the standard of living, but what the standard is.

    After all, a person at the poverty line in America is going to have a car, a flat-screen TV, at least 1 video game system, a house that is at least 1,200 square feet, and has enough money to eat out 1 or 2 times a week.

    Comparatively, a person at the poverty line in India is going to have no car, no TV, no video games, a house that may be 700 square feet, and barely has access to the resources to cook with, much less go out to eat.

    The reality is that the disparity really shouldn't matter nearly as much as what the disparity brings. Please note that I've lived at the poverty level in America for about 80% of my life. Its not bad at all. I, nor anyone, should care that income disparity is at an all-time high if creature comforts for our poor are at an all-time high too.

    Finally, if you really want to fix the income disparity, taxing them - removing the fruit of their labors - is about the most retarded thing you can do. Looking at the data, there is a strong correlation between education and income disparity. I would highly suggest focusing discussion on our abysmal education system. For example, the school my wife graduated from only sees 70% of their students pass major international tests, and is the crappiest school in our county. Do you think they will help bridge the income gap? No. Most have been doomed to low-paying jobs because they weren't taught to have ambition in their careers.


    Just on your education note ...

    While 70% is a very poor indicator in general, it is not that bad when compared to many other US schools. While I don't have the statistics in front of me, there are schools and districts in the United States where the vast majority of the students do not graduate high-school, and of those students that pass many still have significant problems demonstrating that they understand the material that was covered in their education.

     

     

    On a side note, I find a lot of the discussion on the US education system bizzare ... I live in Alberta where we have one of the best education systems in the world (http://calgary.ctv.ca/servlet/an/local/CTVNews/20101207/CGY_alberta_students_101207/20101207/?hub=CalgaryHome), and I'm still regularly frustrated by how much room for improvement there is; and how many students are still being poorly served by our system. I couldn't imagine having to live in a region in the world where education was being so poorly managed where the best students were worse off than the worst students in our system.