The Disturbing Distribution of Wealth

[gb93433]

Up until 1973 the distribution of wealth was fairly equal in 20 percent increments. For example 20 percent of the US income went to the top 20 percent and those who were in the bottom 20 percent of wage earners received 20 percent of the US income.

Today the bottom 20 percent earn 5 percent of the US income and the top 20 percent receive 45 percent of the US income. The most prosperous 1/10th of the population in the US receive 29 percent of the total US income.

The average pay of a CEO in a major corporation was 11.9 million in 2000. Today 17 percent of the families in the US fall below the poverty line. The ratio between the typical rich and poor faimilies in the US is 600:1. The point is that the rich are making 600 times more than the working poor are who are making the rich richer.

It has been figured that for today the best would be about 8:1.

Is 600:1 ethical?

(Moral Issues in Business, Shaw, W.H., Berry, V. 2004, p. 131-132)

 

[StefanM]

No, it isn't.

 

[Gold Dragon]

Originally posted by gb93433:
Up until 1973 the distribution of wealth was fairly equal in 20 percent increments. For example 20 percent of the US income went to the top 20 percent and those who were in the bottom 20 percent of wage earners received 20 percent of the US income.

The math isn't making sense here. How can the top 20 percent and the bottom 20 percent both be making 20 percent of US income?

 

[just-want-peace]

Up until 1973 the distribution of wealth was fairly equal in 20 percent increments. For example 20 percent of the US income went to the top 20 percent and those who were in the bottom 20 percent of wage earners received 20 percent of the US income.

Sorry, but I read this to say that in '73 that everybody made the same. Surely this is not what you meant?!

Example:
Total income in '73 = $100,000,000.
A.-"For example 20 percent of the US income went to the top 20 percent--" therefore $20,000,000 went to 20% of the population giving each percentage $1,000,000!?
B.-"---and those who were in the bottom 20 percent of wage earners received 20 percent of the US income." therefore $20,000,000 went to 20% of the population giving each percentage $1,000,000
C.- That leaves 60%, or $60,000,000 to go to 60% of the population, or once again, $1,000,000 per percentage point!

This would be the socialists greatest achievements if truly doable!

The point is that the rich are making 600 times more than the working poor are who are making the rich richer.

Unless you are on the gov't dole, your working is also making someone richer; and if that someone decided to shut down whatever service/mfg/production that you are thusly employed in, then you would no longer be making him richer, NOR would you be earning a salary!

If you are self-employed, your customers are making you richer.

This is the problem with the nanny mindset in todays society;
"Whats yours is mine & I'm counting on Govt to give me my part of your labors!"

Not to deny there's a gross inequity, but gov't cures are usually worse than the disease, so changing man's heart is the ONLY adequate way to solve the problem

 

[Gold Dragon]

U.S. Census Bureau : Income Equality

Table IE-3. Household Shares of Aggregate Income by Fifths of the Income Distribution: 1967 to 2001

2001
Lowest fifth: 3.5
Second fifth: 8.7
Third fifth: 14.6
Fourth fifth: 23.0
Fifth fifth: 50.1
Top five percent: 22.4


1973
Lowest fifth: 4.2
Second fifth: 10.5
Third fifth: 17.1
Fourth fifth: 24.6
Fifth fifth: 43.6
Top five percent: 16.6

The divide has definitely grown.

 

[Scott J]

Originally posted by gb93433:
Up until 1973 the distribution of wealth was fairly equal in 20 percent increments. For example 20 percent of the US income went to the top 20 percent and those who were in the bottom 20 percent of wage earners received 20 percent of the US income.

As JWP alluded to, this isn't mathematically possible.

 

[Scott J]

Originally posted by Gold Dragon:
</font><blockquote>quote:</font><hr /> U.S. Census Bureau : Income Equality

Table IE-3. Household Shares of Aggregate Income by Fifths of the Income Distribution: 1967 to 2001

2001
Lowest fifth: 3.5
Second fifth: 8.7
Third fifth: 14.6
Fourth fifth: 23.0
Fifth fifth: 50.1
Top five percent: 22.4


1973
Lowest fifth: 4.2
Second fifth: 10.5
Third fifth: 17.1
Fourth fifth: 24.6
Fifth fifth: 43.6
Top five percent: 16.6

The divide has definitely grown. </font>[/QUOTE]Actually, that is remarkably stable- especially considering that the pie to be divided is much, much larger today than in 1967.

Using 1996 dollars as the standard, the GNP in 1967 was $3632.1 billion. In 2003, it was $9985.4 billion.

This in conjunction with your data suggests that the bottom 20% are roughly 2.5 times more wealthy than the bottom 20% in 1967.

http://www.usc.edu/schools/sppd/research/casden/research/data_folder/us_gnp96.pdf.pdf

 

[Gold Dragon]

Originally posted by Scott J:
This in conjunction with your data suggests that the bottom 20% are roughly 2.5 times more wealthy than the bottom 20% in 1967.
http://www.usc.edu/schools/sppd/research/casden/research/data_folder/us_gnp96.pdf.pdf

Are inflation and cost of living factored in?

 

[Scott J]

Originally posted by gb93433:


The average pay of a CEO in a major corporation was 11.9 million in 2000. Today 17 percent of the families in the US fall below the poverty line. The ratio between the typical rich and poor faimilies in the US is 600:1. The point is that the rich are making 600 times more than the working poor are who are making the rich richer.

It has been figured that for today the best would be about 8:1.

Is 600:1 ethical?

This smells of bias. What is a "typical" family in either category? What constitutes a "family"?

Who says 8:1 is the best ratio... and based on what? If by squelching the investor class you were able to bring that ratio to 8:1 would you be satisfied considering that in all likelihood it would result in less wealth for the poor due to a lower GNP? In fact, we could see real poverty as in people starving in the streets.

Your example by the way works out something like this: If the "typical" poor family earned $15,000 per year then the "typical" wealthy family would earn $9,000,000. That sounds unreasonable.

Of course it depends on what you call "typical"... and what your agenda is.

 

[Scott J]

Originally posted by Gold Dragon:
</font><blockquote>quote:</font><hr />Originally posted by Scott J:
This in conjunction with your data suggests that the bottom 20% are roughly 2.5 times more wealthy than the bottom 20% in 1967.
http://www.usc.edu/schools/sppd/research/casden/research/data_folder/us_gnp96.pdf.pdf

Are inflation and cost of living factored in? </font>[/QUOTE]Yes. The statistics are derived in 1996 dollars.

This is also supported by the fact that nearly half of those living under the American poverty level own their own home (46%). Also:

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.

http://www.heritage.org/Research/Welfare/bg1713.cfm

In many respects, poor today is richer than middle class in '67.

 

[Joseph_Botwinick]

Originally posted by gb93433:
Up until 1973 the distribution of wealth was fairly equal in 20 percent increments. For example 20 percent of the US income went to the top 20 percent and those who were in the bottom 20 percent of wage earners received 20 percent of the US income.

Today the bottom 20 percent earn 5 percent of the US income and the top 20 percent receive 45 percent of the US income. The most prosperous 1/10th of the population in the US receive 29 percent of the total US income.

The average pay of a CEO in a major corporation was 11.9 million in 2000. Today 17 percent of the families in the US fall below the poverty line. The ratio between the typical rich and poor faimilies in the US is 600:1. The point is that the rich are making 600 times more than the working poor are who are making the rich richer.

It has been figured that for today the best would be about 8:1.

Is 600:1 ethical?

(Moral Issues in Business, Shaw, W.H., Berry, V. 2004, p. 131-132)

What do you think we should do? I think it is ethical for those who risk their money to start their own business, provide a service to the public, and provide jobs, health care, and other benifits to others to pay people whatever they think their service is worth and for those who work for them to do the best job they can and to accept or reject the job based on what they think their service is worth.

Joseph Botwinick

 

[Gold Dragon]

Originally posted by Scott J:
</font><blockquote>quote:</font><hr />Originally posted by Gold Dragon:
</font><blockquote>quote:</font><hr />Originally posted by Scott J:
This in conjunction with your data suggests that the bottom 20% are roughly 2.5 times more wealthy than the bottom 20% in 1967.
http://www.usc.edu/schools/sppd/research/casden/research/data_folder/us_gnp96.pdf.pdf

Are inflation and cost of living factored in? </font>[/QUOTE]Yes. The statistics are derived in 1996 dollars. </font>[/QUOTE]Are you saying that the aggregate income of the bottom fifth is 2.5 times larger? Did you divide by the number of households in each quintile?

 

[Scott J]

See my edit for further info.

It isn't necessary to divide the number of incomes... the division into 20% sectors makes it unnecessary.

 

[Gold Dragon]

Originally posted by Scott J:
See my edit for further info.

It isn't necessary to divide the number of incomes... the division into 20% sectors makes it unnecessary.

It does matter because the GNP and quintile numbers are aggregates while you are making a statement about a single household.

 

[Scott J]

Originally posted by gb93433:


Is 600:1 ethical?

Yes. If they take the risks, they deserve the rewards... especially when they bring wealth to those who work for them that they wouldn't have had otherwise.

 

[Gold Dragon]

Why don't we just use the U.S. Census numbers who do all the calculations for us. I selected the numbers adjusted to the 2003 dollar and the Consumer Price Index.

U.S. Census Bureau : Historical Income Tables - Households

Table H-3. Mean Household Income Received by Each Fifth and Top 5 Percent

All Races: 1967 to 2003

(Households as of March of the following year. Income in current and 2003 CPI-U-RS adjusted dollars28/)

2003 Dollars

2003
Lowest fifth : $9996

1967
Lowest fifth : $7589

 

[Scott J]

Originally posted by Gold Dragon:
</font><blockquote>quote:</font><hr />Originally posted by Scott J:
See my edit for further info.

It isn't necessary to divide the number of incomes... the division into 20% sectors makes it unnecessary.

It does matter because the GNP and quintile numbers are aggregates while you are making a statement about a single household. </font>[/QUOTE]The bottom 20% possesses 2.5 times more wealth. The data gives us no way of determining any single household.

 

[Gold Dragon]

Originally posted by Scott J:
The bottom 20% possesses 2.5 times more wealth.

As a whole.

Originally posted by Scott J:
The data gives us no way of determining any single household.

Which makes statement like this decieving.

Originally posted by Scott J:
This in conjunction with your data suggests that the bottom 20% are roughly 2.5 times more wealthy than the bottom 20% in 1967.

 

[Scott J]

Originally posted by Gold Dragon:
Why don't we just use the U.S. Census numbers who do all the calculations for us. I selected the numbers adjusted to the 2003 dollar and the Consumer Price Index.

</font><blockquote>quote:</font><hr /> U.S. Census Bureau : Historical Income Tables - Households

Table H-3. Mean Household Income Received by Each Fifth and Top 5 Percent

All Races: 1967 to 2003

(Households as of March of the following year. Income in current and 2003 CPI-U-RS adjusted dollars28/)

2003 Dollars

2003
Lowest fifth : $9996

1967
Lowest fifth : $7589

</font>[/QUOTE]According to that link, the top 5% average income was $253,239. The resulting ratio is about 25:1, not 600:1.

Also, gb's contention wasn't built on the lowest and highest fifths but rather 20% blocks.

Also, the ratio in 67 was 17.6:1.

Finally, there is no indication of whether those bottom 5% figures represent the working young or not, ie. college students that have other sources of support.

 

[Scott J]

Originally posted by Gold Dragon:
</font><blockquote>quote:</font><hr />Originally posted by Scott J:
The bottom 20% possesses 2.5 times more wealth.

As a whole.

Originally posted by Scott J:
The data gives us no way of determining any single household.

Which makes statement like this decieving.

Originally posted by Scott J:
This in conjunction with your data suggests that the bottom 20% are roughly 2.5 times more wealthy than the bottom 20% in 1967.

</font>[/QUOTE]It isn't deceiving at all. You might have not understood but that doesn't make me deceptive.

"the bottom 20%" is an aggregate is it not? My statement was about a group, right?