| sc94597 said: Topic 1: Sector-based distribution effect on inequality While I think sector-distributions do explain a part of it (which is why I originally mentioned Utah, a far less rural state than Alaska with similar sector distributions to New York), I think there is a bit unaccounted for when you look at the proportions by major sector between Alaska and New York State. They follow the trends you mentioned, but not extremely so. This was the average wage for each of those groups. In comparison, New York state's distribution. And the average wages. The biggest difference seems to be in the relative pay rates of the various sectors. Professional-managers are paid significantly higher in New York, whereas non-professional-managerial positions are paid roughly the same or higher in Alaska. Still professional-managers/knowledge workers are the most plural sector in both states. 44.5% for New York and 37.8% for Alaska. If you look at Utah, a much more urban state than Alaska, you see this: This looks a lot more like New York's, with a ratio-pay of 1.45 for (professional-managerial worker to natural-resource worker) for Utah vs. New York's of 1.55, and Alaska's 1.08. The distributions aren't that far apart either (41% professional-managerial for Utah vs. 44.5% for New York, 8.8% Natural Resources for Utah vs. 6.65% for New York.) Utah also has a worse ratio-pay between professional-managerial and service work than New York. 2.33 times the pay being a prof-manager over a service worker (for Utah) vs. 2.12 times the pay (for New York.) Yet Utah's Gini Coefficient is 44% and New York's is 51%. That is a very significant difference that can't fully be explained by sector-distributions alone, in my opinion. Especially given how little differentiation there is between the distributions of Utah and New York, unlike Alaska and New York. Also, this is irrelevant to the discussion, but if you adjusted the wages for PPP, you should probably multiply Utah's by about 1.2 and Alaska's by 1.1 to get rough "real wages" when comparing them with New York. Topic 2: Papers shared Looking at the first paper you shared I think a clarification needs to be made. I wasn't aiming to argue that in the U.S, inequality isn't growing more rapidly in large cities, but rather that this isn't some characteristic of large cities in themselves by the nature of being large or developed, but rather the effect of policy implementations since the neo-liberal era started (roughly the late 70's/early 80's) and after the New Deal era (early 30s-early 70's) ended. The paper's authors themselves note that it hasn't always been true that the largest cities in the country were the most unequal.
The paper's authors then emphasize that this is largely because the strong differentiation between so-called "skilled workers" and "lesser-skilled workers" when it came to wage-growth didn't exist in the past.
But what are the causes for why wage growth has stagnated among the so-called "lesser-skilled" workers? The paper mentions globalization, but it's hardly the only change that happened between the New Deal era and the Neo-Liberal era. Other factors that came into play are the decline of unions and collective bargaining, the flight of middle-income earners outside of urban cores, technological development shaped by state and federal grants, etc., etc. All of these are directly and indirectly caused by policies that politicians, regulatory agencies, legislatures, and judiciaries enact, enforce, and interpret.
And here they reiterate it.
Personally, I find the first paper to be a bit more rigorous than this second one. I'm skeptical of their definition of "financial development." Their definition of "financial development" is this,
This metric seems to be capturing wealth concentration more than financial development to me. By using per capita stock market wealth they are ignoring many non-stock financial devices that might reduce income-inequality rather than increase it. For example, the credit market and access to cheap credit. Also high-inequality can be the cause of a higher ratio of per capita stock market wealth to nominal per capita personal income, rather than the latter being a cause of the inequality. |
In my opinion, that data is not adequately subdivided for our purposes. Throwing 45% of the population into the same extremely broad bucket makes it difficult to really see what is going on. Unfortunately, the census data that it pulls from is subdivided to oblivion and I'm not going to do the work to pool it, so I'll be using BLS numbers for a bit (the data isn't quite Goldilocks as I would prefer a little more subdivision, but it's pretty good imo).
This is a table I made using BLS data (so let me know if you see any data entry or math errors or if you don't understand what different bits mean). I feel like this demonstrates the differences in these economies pretty well.
-Alaska has far more Mining/Logging, Construction and Government jobs (with 66x more Mining/Logging jobs than NY) which I would say tend to be pretty good jobs (which often require less education), but you aren't usually going to get rich with them.
-New York on the other hand sees double the jobs in Information and Finance and about 1.5x more in Professional/Business and Education/Health Care. These tend to be more "high skill" jobs, which require more education and often have far higher pay ceilings. This tendency towards "high skill" jobs also shows up in the educational attainment in these two states, with NY having a pretty substantial amount more individuals with Bachelors and Masters degrees.
-These trends are pushed even further when looking specifically at the NYC area (this data includes some NYC suburbs in NJ). Fewer construction jobs (this data combines Mining/Logging with Construction, which I suspect is likely because there are too few jobs in Mining/Logging to allow accurate tracking), manufacturing jobs, and Government jobs and even more jobs in Info, Finance, Business and Health Care/Education.
That said, yes, a lot of jobs exist in a common zone which I described before as the more "ubiquitous" jobs like grocery store clerk and whatnot. There's a lot of these jobs, but I wouldn't personally say they really drive an economy's character but instead exist to respond to the demands of the larger economy.
Further, when you look at the actual pay of jobs in NY/AK, you start to see some interesting trends (Note: Cost of Living Index is pretty similarly high for both NY and AK, although likely for very different reasons). You mentioned this in your post that relative pay-rates are higher in NY and I do agree with that finding. From perusing the data, it seems low pay jobs pay about the same in NY vs AK, while a lot of high pay jobs (outside of Health Care it seems) pay way more in NY than AK. This, combined with the zip code earnings data I provided earlier, indicates to me that the pay ceiling is far higher in NY than in AK, while also demonstrating that the Finance and Business jobs in NY are pulling a lot more on NY's Gini than they are pulling on AK's. If there were fewer of these high pay ceiling jobs, even without improving the conditions for those at the bottom, NY's Gini would decrease.
So, to summarize, NY (and especially NYC) has a lot more "high-skill" jobs with very high income ceilings, while AK has a lot more "laborer" jobs and government jobs which have a solid pay floor, but not the highest ceiling. NY also sees higher pay for those "high-skill" jobs which further emphasizes these differences. This contributes to an economy with a much higher Gini in NY than in AK as a result of these employment characteristics.
Now, why am I not talking about Utah? Well, first of all, I'm exhausted just talking about two states, but more than that, my point isn't that New York isn't comparable to any other state or that NY is actually doing great. My point is more akin to something you said in your post: Social science is hard. I have concern about using numbers like Gini in a broad way as there is a lot of context pulling at those numbers. I don't just mean to be pedantic in this point, because I think it reflects a very real disagreement I have with the Far-Left. I do not believe we are at a point in which the existing contexts of our economic system must be dismantled for equality's sake. I believe that we can strive to improve within existing contexts.
I don't believe it is functionally realistic to expect NYC to have a Gini as low as, say Schuyler County in NY (which, for comparison, NYC has a Gini around .6 compared to Schuyler's 0.38). I do however believe that NYC can improve it's economic inequality relative to itself in order to better provide for those at the bottom, specifically by leveraging it's strength of having a lot of high income individuals (although a lot of these changes are much easier with Federal support). Now, even if NY reaches that point where they have largely succeeded in their aims to provide stability and dignity for those in lower income brackets, they will likely still have a higher Gini than a lot of other places in the country. This isn't necessarily something to damn them for. While there are certainly lessons that can be learned from these different areas, the contexts they exist in differ so we should not necessarily expect parity, especially when it comes to Gini, which doesn't necessarily reflect the economic strength of those lower income brackets.
Last edited by sundin13 - 7 hours ago
