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Forums - General - Wealth Inequality in America

Mr Puggsly said:

I'm not bothered 1% of the country has so much money. But I'm very bothered a much larger chunk of our population don't make an effort to lift themselves out of poverty.


You've stated a few times that poor people choose to be poor in this very thread. If you are in fact bothered by this, then it's safe to assume that you want poor people to choose to escape poverty. If that's the case, then I must also assume that you have thought of some reasons why the poor make the absurd choices that they make. So what do you think? Why do you think the poor choose not to escape poverty? Lack of education? Low cognitive capacity? What do you think? I am interested.



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tagged interesting thread with interesting data



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sc94597 said:
SvennoJ said:

There are lots of ways to measure poverty, like this one, pretty much an upside down picture of that better life index
http://www.washingtonpost.com/blogs/worldviews/wp/2013/04/15/map-how-35-countries-compare-on-child-poverty-the-u-s-is-ranked-34th/


If anything, that shows income inequality, not destitute (poverty.) For the first graph they present, the national median (and ones distance from it) depends on the country's relative income brackets. This means that the median income in, say Estonia, could be well below the median incom of say the United Kingdom, and fewer individuals fall less than the median income in Estonia because it is more equal, yet more poor people could exist (as a proportion) in Estonia than the United Kingdom. 

As for the graph you posted, the same holds true. The relative poverty line in the U.S is much higher than many of those other countries, again a measurement of income inequality and not absolute poverty (destitute.) 

For example, from your article, the U.S' poverty line is the average disposable income of Italy, Poland, Hungary, Greece, and Czech Republic. Higher than Estonia, Portugal and Slovakia's average income. 

 Internally, the United States defines the poverty line as a family living on less than about $22,000 per year, which includes about 15 percent of Americans

From the article you linked,

The poor U.S. showing in this data may reflect growing income inequality. According to one metric of inequality, a statistical measurement called the gini coefficient, the U.S. economy is one of the most unequal in the developed world. This would explain why the United States, on child poverty, is ranked between Bulgaria and Romania, though Americans are on average six times richer than Bulgarians and Romanians.

 

Also note, that your article doesn't include welfare spending and benefits, which in the U.S while are less common in middle classe percentiles, can add up quite a lot to the bottom percentiles that get them. 


That was kind of my point. You can present the data to show almost anything you want. Most countries are too different to make direct comparisons. Different neccesities and services have vastly different prices with huge differences in social welfare.
Living off $22k a year in the US with kids can be quite a challenge, In Bulgaria you're might be well off with that.

Anyway income equality is still rising. As long as the bottom is benefitting too that's not too big of a problem, yet it seems the middle class is getting a harder time instead. Top and bottem 10% is one measurement, how is the rest of the distribution.



 

SvennoJ said:

That was kind of my point. You can present the data to show almost anything you want. Most countries are too different to make direct comparisons. Different neccesities and services have vastly different prices with huge differences in social welfare.
Living off $22k a year in the US with kids can be quite a challenge, In Bulgaria you're might be well off with that.

Anyway income equality is still rising. As long as the bottom is benefitting too that's not too big of a problem, yet it seems the middle class is getting a harder time instead. Top and bottem 10% is one measurement, how is the rest of the distribution.

 http://www.pewstates.org/uploadedFiles/PCS_Assets/2012/Pursuing_American_Dream.pdf  (2012)

Ninety-three percent of Americans whose parents were in the bottom fifth of the income ladder and 88 percent of those whose parents were in the middle quintile exceed their  parents’ family income as adults.

Eighty-four percent of Americans have higher family incomes than their parents had at the same age, and across all levels of the income distribution, this generation is doing better than the one that came before it

Fifty percent of Americans have greater wealth than their parents did at the same age

The middle quintile has the second most people with higher family incomes than their parents at the same age (the most being the bottom quintile 93% and the least being the top quintile - 70%)

Why do more Americans experience upward absolute mobility than upward relative mobility?

The rungs of the income ladder have widened during the past generation, reflecting economic growth at all levels, but especially at the top. Median income in the bottom income quintile increased by 74 percent between the two generations, compared with 126 percent in the top income quintile (see Figure 4). The difference between the size of the rungs between the two generations means that while the vast majority of Americans exceeded their parents’ family incomes, the extent of that increase—particularly at the bottom—was not always enough to move them to a different rung of the income ladder.



Jay520 said:
Why do you think the poor choose not to escape poverty? Lack of education? Low cognitive capacity? What do you think? I am interested.


I presume the biggest issue is lack of motivation. Perhaps many poor people are content with the little money they make or their government handouts. The fact is even poor people in America live pretty well compared to most people in the world.

I'm not sure what the solution is, but I'm certain most people living in poverty can pull themselves out.



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anonymunchy said:


"Not acquring the skills needed to get a decent paying job is a choice."
This is far from the truth. Not everyone is born with the same privileges. No one choses where they are born, who raises them, how they get introduced into the world, who teaches them how to live. Someone who is born into poverty may never even realise they want to get out of it. They are a product of their surroundings, just like you. Your words paint an overly simplistic picture of some very complex issues. It may have been a choice for you, it certainly isn't for everyone. Besides this, there is no guarentee that the skill you acquire is going to lead you to a decent paying job. Job markets change constantly and so do education requirements. To go even further, shouldn't "decent paying" be a requirement for all jobs? Someone needs to do the work, so someone needs to survive on what it pays.

Besides some Scandinavian countries I've never heard of a government actually given money to people to go to college. The idea of getting into debt with the government without job security doesn't sound very appealing to me neither.

Not sure whether or not my point will come across, but it's the best I can do right now.

You're making excuses for the people that choose not work towards something better than they're born into. You're basically saying people are ignorant to a better life than poverty, but I feel many are simply content with their situation. A poor American lives a better life than most people in the world.

Many people don't even make the effort to finish High School and that's free. That's a great example of how unmotivated a large number of people are in this country.

Are you aware the US gives money to people so they can go to college? I'm not talking about loans, its free money for people that don't have much money. Many people don't even bother to take advantage of it because they're too damn lazy.



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Mr Puggsly said:
Jay520 said:
Why do you think the poor choose not to escape poverty? Lack of education? Low cognitive capacity? What do you think? I am interested.


I presume the biggest issue is lack of motivation. Perhaps many poor people are content with the little money they make or their government handouts. The fact is even poor people in America live pretty well compared to most people in the world.

I'm not sure what the solution is, but I'm certain most people living in poverty can pull themselves out.


Sorry, but the big picture math doesn't support that argument.  You can look at an individual and say "you can get yourself out of poverty" and the statement is often true.  But if look at the big picture, and say "you can ALL get yourselves out of poverty," that statement is false.  The proportion of low-paying jobs to decent jobs is bad and getting worse.  And it's not because people decided they WANTED low-paying jobs.  The good jobs went away, and people took what they could get to support themselves or their families.  When a pressing economic need exists - like a health problem or mouths to feed - a person can easily become trapped in the only job they find themselves qualified for.

It used to be a good attitude, work ethic, and willingness to learn and improve yourself (and a high school education!) was enoguh for a stable career.  That's not the case anymore.  All that can get you is a dead end service-industry job.

It's EASY to blame the poor their situation, and so many people take the EASY way out and say "it's their fault."  It's not.  The situation is so much more complicated, but those with comfortable lives don't want to even think about it, so they blame the poor for being poor.  The number of people who want better opportunities far outnumber the amount of opportunities available.  Telling people to just get better jobs will not, and cannot solve the problem.  Even if, I should say ESPECIALLY if, they all DO try to get better jobs.



There is a pretty obvious reason for the income gap if you ask me. It's simply human nature. It's the same reason Communism doesn't work. Humans must grow and consume, capitalism fulfills that need. That's the same reason we have a growing income inequality problem. There are not the necessary checks in place to keep it from growing until it totally consumes it's resources. Sort of like humans as a species.

Not to bag on capitalism or humans. But we are a species of constant (and sometimes destructive) growth. It's who we are and it will no doubt be the end of us.



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sc94597 said:
Pristine20 said:


What you have done is commendable no doubt but the vast majority are going to be stuck in whatever bracket their parents are in. 

This is incorrect. 

http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf

http://www.frbsf.org/economic-research/publications/economic-letter/2013/march/us-economic-mobility-dream-data/

58% of households in the lowest quintile in 1996 were in a higher quintile in 2005. 

57% of households in the top 1% in 1996 were no longer in the top 1% in 2005. 

One problem with popular portrayals of the income gap is that they show income distribution at a single point in time. But for many households, income changes over time. The low-paying jobs from high school days usually give way to better-paying jobs later in life. Figure 1A shows the percentage of households that moved to a higher income quintile from 1996 to 2005. For example, nearly 58 percent of the households in the lowest income quintile in 1996 moved to a higher category by 2005. The reverse also happens, as shown in Figure 1B. Of those households that were in the top 1 percent in income in 1996, for example, more than 57 percent dropped to a lower income group by 2005.

Granted it was 1996 - 2005, but the "Great Recession" hasn't changed things much, based on recent studies (I chose this one, despite its age, because the source for the data is the U.S Treasury.) 

For other studies: 

http://www.businessinsider.com/inequality-and-mobility-in-the-united-states-2013-7

 

 

 

Only 22%-25% stay in the same bracket as his father whether his father was in the top 10% or the bottom 10%. Oddly enough, around 7% go from the bottom to the top. So for every 100 men born in the bottom 10% of fathers, there are seven who went to the top, 2 who went to the 90 percentile, 5 who went to the 80 percentile and 5 who went to the 70th percentile, 11 who went to the 60th percentile and 11 who went to the 50th percentile, 10 who went to the 40th percentile and 10 who went to the 30th percentile, and 17 who went to the 20th percentile. About 51% of men who were born at the bottom moved to the upper 50% of the population. 


Could've sworn I read a forbes article that made the point I posted but I can't find it now. Your article seems solid. I certainly didn't see that one coming. Interestingly though, as some move up, others move down. I guess some people just have to be poor  for others to be rich both literarily and figuratively i.e if everyone had 1 mil in the bank, 1 mil wont be considered rich anymore. There are limited resources so there will always be unequal distribution.

Equality is only truly achieved in death as per the great quote in my sig.



"Dr. Tenma, according to you, lives are equal. That's why I live today. But you must have realised it by now...the only thing people are equal in is death"---Johann Liebert (MONSTER)

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It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

There should be a crazy tax bracket for the ubber rich did you make a billion this year if yes please deposit 60 in the irs fund right now.