8 ms·

Myths of the 1 Percent: What’s Putting People at the Top

113 points by tangled 9y ago

alexasmyths 9y ago
What I find interesting is that it is in the 'professions'. I would have thought it was massively wealthy equity owners/holders, hedge fund managers etc.. But yes - if we are paying doctors $1M/year then this will happen. At a nearby hospital in Canada, technology improvements have allowed doctors to diagnose using x-rays a lot faster ... but the Unions have kept pay scale the same. The doctor at the Orangevill hospital earns over a million dollars a year, and he works from home. Swipe, swipe, swipe, swipe - done. Faster tech = more money for the doctor. Savings not passed on to taxpayers. Innovators thought they were improving healthcare, but they really were throwing more surpluses onto the value chain, to be captured by those with the most power: doctors, possibly drug companies. One would think a private system would be more efficient ... but it's probably just as bad in the US.
- pdonis 9y ago
  > One would think a private system would be more efficient ... but it's probably just as bad in the US. The US health care system is not a "private system". It's a mishmash of private and public which combines the worst features of both. The reason we have it in the US is that during WW II, the government controlled wages, so businesses trying to compete for employees had to offer something else as an incentive, and they mainly picked health care benefits. Then, when the war was over and the government stopped controlling wages, instead of going back to competing on wages and dropping employer-provided health benefits, the system of employer-provided health benefits kept on growing. Which now meant it had to be regulated by the government, and so on, and so on...
  - groby_b 9y ago
    Let's not forget that health care is a great point of leverage for employers, too. Because often, your spouse is also insured on that same plan, and leaving a job is not palatable if either one is dealing with significant illness. If you wanted to create a legal equivalent of indentured servitude, company healthcare plus high healthcare cost would be a great solution. I don't think that was the plan, but it sure works out that way.
  - WalterBright 9y ago
    Employer provided health care stuck around because it was paid for with pre-tax dollars, while buying it individually was with post-tax dollars. This hugely incentivizes employer paid plans. It has become so entrenched it has more or less morphed into a "right" that employers should pay for it.
- abrichr 9y ago
  > The doctor at the Orangevill hospital earns over a million dollars a year, and he works from home. Swipe, swipe, swipe, swipe - done. What kind of doctor is this, radiologist? I'm not aware of any mobile apps in use clinically, but a radiologist's job is to look at images on a computer screen. It doesn't matter where they do it from. Very little of it is automated. > One would think a private system would be more efficient ... but it's probably just as bad in the US. Canada is one of three countries in the world in which the government has a monopoly on healthcare payment. The other two are Cuba and North Korea. The United States has the least efficient healthcare system in the G20. Canada's is second least efficient. All of the others have two tier systems.
  - diggernet 9y ago
    Interesting perspective on single-payer.
  - alexasmyths 9y ago
    My family member sits on the board of the hospital and described to me the technology advances enabling the doctors to 'do more' in the same time. The fact is he ears over $1M working from home, inspecting imaging. Doctors should probably be highly paid but this is too much.
- WalterBright 9y ago
  The AMA is empowered by government to restrict the supply of doctors. The purpose is to keep doctor compensation high. See "Competition and Monopoly in Medical Care" by Frech
hkmurakami 9y ago
>Almost all of the growth in top American earners has come from just three economic sectors: professional services, finance and insurance, and health care, groups that tend to benefit from regulatory barriers that shelter them from competition. >The groups that have contributed the most people to the 1 percent since 1980 are: physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives. Not a surprising result at all when you consider that the bottom of the top 1% has an income of high 6 figures to somewhat above $1M. That number is something very achievable for the most successful "professionals" -- doctors, lawyers, bankers (not HF managers), traders, and there are a lot of these people out there! It's a natural consequence that if you look for a large number of people earning $1M, you'll end up with highly successful "professionals" rather than outlier level wealth from business ownership, which is much more rare.
- danharaj 9y ago
  Im very confident the author knew this and thought this little shell game would make his calls for deregulation look convincing.
  - deleted 9y ago
    [deleted]
- pdonis 9y ago
  *> business ownership, which is much more rare. First, you're assuming that all these "professionals" are not also business owners, which is often false; doctors and lawyers earning enough to put them in the top 1% are most likely owners of or partners in a private practice. Second, if we restrict "business ownership" to those who are not "professionals", the fact that it is rare is a consequence of regulation, not an independent fact. Regulatory barriers don't just benefit "professionals" who have the requisite qualifications; they also hamstring people trying to start businesses not in those particular "professional" sectors. So the result is only "not surprising" if you take the level of regulation we have now for granted.
- 9y ago
neil_s 9y ago
This is such an interesting article, attempting to answer one of the biggest questions of the 21st century in one fell swoop. However, I'm not sure all of the reasoning and analysis holds up. For example, software engineers with salaries over 390K are far from rare in the US, and Switzerland has both large numbers of bankers per capita and private doctors with incredibly high incomes.
- mcguire 9y ago
  In terms of income, anyone with an income greater than $390,000 per year is pretty rare. Roughly 99% of the population make less, in fact.
balance_factor 9y ago
It's interesting what words are not in the article. Words like heir, inheritance, profit, interest, rentier. The word rent is there, but assumed as a tenant, not landlord. I assume the Forbes 400 richest are in the 1%. How did the Koch brothers get their $100 billion? Where did the Waltons get their $140 billion? Where did the Mars family get their $75 billion? The article makes it sound like these people became rich when they decided whether or not to go to law school. It's important to note how in the US how FIRE (Finance, Insurance, Real Estate) and health care affect the economy. But a lot of what puts people at the top is at which hospital they took their first breath.
- ameister14 9y ago
  There are millions of people in the 1%. The 400 people at the very top aren't going to come into it much.
  - hn_throwaway_99 9y ago
    But even within the 1%, the income distribution is highly skewed, i.e. those 400 people are responsible for a very sizable total of the overall wealth within the 1%.
    - MuffinFlavored 9y ago
      i'd be curious to know around what portion the 400 people are responsible for
      - llamataboot 9y ago
        "With a combined worth of $2.34 trillion, the Forbes 400 own more wealth than the bottom 61 percent of the country combined, a staggering 194 million people. The median American family has a net worth of $81,000. The Forbes 400 own more wealth than 36 million of these typical American families." http://www.ips-dc.org/billionaire-bonanza/ http://www.ips-dc.org/billionaire-bonanza/
whatyoucantsay 9y ago
Few things are sadder than seeing Britain and China post equal "gains" for the 1 percent.
tveita 9y ago
"Workers at the 90th percentile of the income distribution for professionals make 3.5 times the earnings of the typical (median) worker in all occupations in the United States. Only Mexico and Israel, which have very high inequality, compensate professionals so disproportionately. In Switzerland, the Netherlands, Finland and Denmark, the ratio is about 2 to 1." It's hard to find comparable numbers, but aren't the median wages higher in all those countries? The article vaguely makes it sound like it's just a matter of paying highly-paid professionals less, but would that lift the bottom or just concentrate the money to an even thinner slice of the population?
- Spooky23 9y ago
  That’s already happening. Remember they usually talk household income — the 90th percentile couple is two professionals. We have this massive underclass that is growing faster. The US is going to be like Brazil in 15-20 years. I’m sorry for my son’s generation.
- jopsen 9y ago
  > It's hard to find comparable numbers, but aren't the median wages higher in all those countries? Last I looked no; the bottom 30% is where Denmark does better than the US. The median wages are similar, maybe slightly higher in the US. > The article vaguely makes it sound like it's just a matter of paying highly-paid professionals less, but would that lift the bottom or just concentrate the money to an even thinner slice of the population? Good question. Probably you have to hit the super rich 0.001% with massive taxes, or an aggressive estate tax (preventing wealth from accumulating across generations). But even with that, good regulation that facilitates competition is probably necessary. I wouldn't be surprised if that makes a bigger splash than the top 0.001%. Note: there is good and bad regulation. Denmark is heavily regulated, but a lot of it is efficient and fosters competition.
- WalterBright 9y ago
  It's necessary to be careful with such articles. The correct figures to use should be "total employee compensation", which includes the value of employee benefits. These average about 30% on top of salary in the US.
cperciva 9y ago
In the United States, the richest 1 percent have seen their share of national income roughly double since 1980, to 20 percent in 2014 from 11 percent. Not true. The highest income 1% have seen their share of national income roughly double. But the highest income 1% is not the richest 1%.
- tailrecursion 9y ago
  Is this change in distribution over time being measured using income tax returns? In the 1950s the highest marginal rate was about 90%, and there were many loopholes and special rules. How do we know those rich people back then were accurately declaring income above $250,000?
- twoodfin 9y ago
  The wording also (deliberately?) suggests that "they" in 1980 is the same as "they" in 2014, which of course is far afield of the truth. Americans enter and fall out of the 1% all the time. Some significant fraction of 1%'ers are there for the one and only year they sell their home, for example.
- maxerickson 9y ago
  It would be interesting to see how the sets overlap from year to year.
- WalterBright 9y ago
  It's normal for articles like this to conflate income and wealth whenever it's convenient to whatever point they're trying to make. For example, one might see an article complaining that some percentage of wealthy people didn't pay income tax last year. But an income tax is a tax on income, not wealth, and it's commonplace for wealthy people to have a bad year and lose money.
- mcguire 9y ago
  "Some readers wondered if the 1 percent by wealth weren’t an entirely different group of people from the 1 percent by income. But there is substantial overlap: the Fed data suggests that about half of the top 1 percent of earners are also among the top 1 percent in the net worth category." https://mobile.nytimes.com/blogs/economix/2012/01/17/measuring-the-top-1-by-wealth-not-income/?referer=android-app://com.google.android.googlequicksearchbox https://mobile.nytimes.com/blogs/economix/2012/01/17/measuri...
sigi45 9y ago
Whatever the reason was, that a family or people where able to accumulate that much wealth: I believe, there should be an upper limit. It is not okay for people like Bill Gates (i do think he is a good person) or Mark Zuckerberg to have that much power on such a small planet. It is awesome that someone like Bill Gates spends tons of money for research etc. but he should not be able to make such huge decisions in a modern democratic society. There is a good reason to allow people to accumulate wealth. Why shouldn't someone be allowed to not spend all his/her money for alcohol, party and cars or whatever and instead put the money into real estate for there children. But something like 5-10 Million per Child is still super reasonable. Perhaps that leads the way to a more fair feature where it is not necessary for anyone anymore to horde money for the familiy heritage.
- auggierose 9y ago
  I don't know. Somebody needs to make those huge decisions, and it is not always clear if that should be by democratic means (here is to you, Trump and Brexit).
  - Retra 9y ago
    Trump and Brexit are the result of people with too much money making terrible decisions for the rest of us. They're not evidence that rich people should have more power. But incidentally, someone's ability to make a lot of money (or worse: inherit it) doesn't imply that they have any preferential ability to spend it in a way that benefits society. And when someone has the unchecked power to spend massive sums of money on themselves in ridiculous and frivolous ways, it's pretty clear that they have too much power. Because whoever should be making those decisions should certainly not be doing that. Bill Gates rented a yacht for $5M/week. How is this not a clear waste? How much suffering could have been avoided at that cost? At least put it in some kind of public trust where such behavior can be properly considered corruption.
    - heylook 9y ago
      > Bill Gates rented a yacht for $5M/week. How is this not a clear waste? Those $5M don't just get lit on fire. They transfer to some other set of people who can then decide what to do with it, and then onto some other set of people. Maybe the yacht's owner donates all proceeds to feed starving children.
Mitchhhs 9y ago
Is inequality a feature or a bug of capitalism? Seems like the general thinking is that its a feature in-so-much as it encourages innovation, entrepreneurship, etc. It seems like it becomes a bug when it reaches a level in which it creates a positive feedback loop of more inequality. As with anything, i've noticed the discussion is really about how much, not should it exist at all. Almost every debate in American politics is painted as black and white, whereas the actual debate is where we fall on a spectrum. It seems like everyone disagrees so much, but really I think we are haggling over a slight deviation to the right or to the left and because we have to talk about everything in such black and white terms, the real discussion gets lost. We all agree on much more than we disagree on.
- jabretti 9y ago
  It's a feature, not of capitalism, but of human interactions in general. (It should not have escaped our attention that any time an "alternative to capitalism" is tried it inevitably winds up with wealth and power even more heavily concentrated, this time in the hands of the people whose job it was to ensure that wealth and power were shared fairly.) And, to a large extent, of animals. I suppose there are some animal species where all members are more or less equal, but they're probably mostly solitary animals which rarely interact with each other. In social species, massive inequalities, particularly between males, are the norm.
  - humanrebar 9y ago
    Good point. Pointing out the flaws of the current system and actually realizing improvements are two different things.
- aantix 9y ago
  "Human beings are born with different capacities. If they are free, they are not equal. And if they are equal, they are not free." -- Aleksandr Solzhenitsyn
  - fallingfrog 9y ago
    “Alike and equal are not the same thing at all.” ― Madeleine L'Engle, A Wrinkle in Time
vtange 9y ago
I'm surprised the words "capital gains" are not mentioned at all in the article. It's already well known that the richest of the 1% did not get there purely through a high wage/salary. Some might blame loose monetary policy for providing easy money for the 1% in the USA (if you can borrow money and speculate for free, why not, after all), but if that's the case Japan really stands out; they've been QE'ing since their '80s bubble popped and they've managed to keep a relatively good Gini coefficient relative to the rest of the developed world (they're more egalitarian than their East Asian peers). You'd think that having two lost decades with your economy stuck in neutral, the Japanese 1% would just leave their country in the dust.
- jopsen 9y ago
  > It's already well known that the richest of the 1% did not get there purely through a high wage/salary. This talks about the 1%, not the few super rich, which is less than 1 out of 100. It's confusing because often when people say "the 1%" they actually mean multi-millionaires; which is less than 1%. Most 1%'ers are elite professionals. And this articles argues they make more money because of regulation that creates barriers to competition. The super rich multi-millionaires and billionaires is a different story.
  - mcguire 9y ago
    The threshold of the top 1% by wealth is $8.4 million in the US. https://mobile.nytimes.com/blogs/economix/2012/01/17/measuring-the-top-1-by-wealth-not-income/ https://mobile.nytimes.com/blogs/economix/2012/01/17/measuri...
200x0 9y ago
Funny to see you people discussing petty caviar-allowance inequality so fervently within your own arbitrary Western borders yet never giving much mindshare to the rampant "developing" country exploitation that is the very source of your general prosperity. I'm a citizen of third-world country that is being sucked dry by the West for its resources and getting its people shackled to the ground by direct support for the ruling dictatorial regime. I don't even know why I'm writing this..
- lovich 9y ago
  I see what you mean and it is bad. Until we have nations merge however, there's nothing we can do even when the system is working at it's theoretical perfection. Our people live in demarcated areas with separate rule sets. When it comes to the rich vs poor in Western society we are ostensibly equal and many people are upset because reality doesn't reflect that. When it comes to the US vs say Burkino Faso, what would the correct course of action be? There's exploitative actions being taken by individuals and companies against developing nations that could stop, but then what happens? I don't think sweatshops are good but no western company is going to source goods from them if they aren't cheap as the quality isn't the same. We could try to help other nations get to the same quality of life, but many have made it explicitly clear that they don't want interference from foreign powers. Do we act paternalistic and do what we think is right for other people which removes their autonomy? Do we avoid that and avoid exploiting them, but leave them in the dust because they have nothing we want or need if they are using regulation and price arbitrage to gain business? Do we continue as we currently do which sends money into these countries which should help them develop, but tends to be spread unevenly and causes a lot of human despair? I can't tell what the right answer is, I can't tell if there even is a right answer
  - 200x0 9y ago
    1. Exploitative actions taken by individuals and companies are nothing compared to the ones taken by your governments. Europe is running cheap education improvement programs here as we speak, and other such show-tell crap, but they also sign exploitative deals and house corrupt blood money of my dictator in your banking systems - giving him free-pass to do as he likes, as long as the deals are signed and people are silenced. It's realpolitik all the way down. 2. We do want interference, interference against your current interference. 3. Just let us establish our own instutitions, stop helping and making deals with criminals, stop putting on the mask of being humanitarian and then exploiting the living shit out of us. 4. Work visas - please make them available for the skilled and offer us some channel for escape. We are majorly landlocked because our passports don't even grant us a tourist visas to anywhere other than bumhole Somalia or Afghanistan. I could go on for ages but you people have so vastly different view on these issues I don't even feel like it would be worth my time.
candiodari 9y ago
TLDR: the public secret is that if you take away the top 0.01% who started businesses like Amazon, Microsoft, Google, etc, the big driver of inequality is not capitalism/economy/... The big driver of inequality ( 0.01% to 1% ) is ... government regulation. Directly, as in the government hires tens of thousands of highly paid people. And, more offensive at least to me, government regulation giving massive advantages to specific businesses (most recent "wtf" example I think would be equifax, with the government rallying behind them and (worst of all) effectively forcing large banks to buy from them). Businesses pushed like this by governments include Boeing, Oil companies, Tesla, SpaceX, ... But this is only the very upper layer. There is a huge "second" layer that includes large parts of the legal space, the health care space, the education space, where hundreds of thousands of people make $400k+ per year because ... well because the government says so. Which of course very much opposes most of the viewpoints taken on this site. Given that this is what gives over half of the 1% owes their wealth directly or indirectly to taxes (or in the case of things like equifax "hidden taxes". Taxes, as in government forces you to pay, but you pay in your mortgage bill, you pay in charges on your bank account, etc ...) ... there is a strong case to be made that more taxes ... will increase inequality. At least as long as the government doesn't slim down a LOT.
squozzer 9y ago
>the political causes of the 1 percent’s rise are directly under the control of citizens. Patently false. The political causes are directly under the control of the US state and federal legislatures, which are populated by whom?

113 points by tangled 9y ago

What I find interesting is that it is in the 'professions'. I would have thought it was massively wealthy equity owners/holders, hedge fund managers etc.. But yes - if we are paying doctors $1M/year then this will happen. At a nearby hospital in Canada, technology improvements have allowed doctors to diagnose using x-rays a lot faster ... but the Unions have kept pay scale the same. The doctor at the Orangevill hospital earns over a million dollars a year, and he works from home. Swipe, swipe, swipe, swipe - done. Faster tech = more money for the doctor. Savings not passed on to taxpayers. Innovators thought they were improving healthcare, but they really were throwing more surpluses onto the value chain, to be captured by those with the most power: doctors, possibly drug companies. One would think a private system would be more efficient ... but it's probably just as bad in the US.

pdonis 9y ago
> One would think a private system would be more efficient ... but it's probably just as bad in the US. The US health care system is not a "private system". It's a mishmash of private and public which combines the worst features of both. The reason we have it in the US is that during WW II, the government controlled wages, so businesses trying to compete for employees had to offer something else as an incentive, and they mainly picked health care benefits. Then, when the war was over and the government stopped controlling wages, instead of going back to competing on wages and dropping employer-provided health benefits, the system of employer-provided health benefits kept on growing. Which now meant it had to be regulated by the government, and so on, and so on...
- groby_b 9y ago
  Let's not forget that health care is a great point of leverage for employers, too. Because often, your spouse is also insured on that same plan, and leaving a job is not palatable if either one is dealing with significant illness. If you wanted to create a legal equivalent of indentured servitude, company healthcare plus high healthcare cost would be a great solution. I don't think that was the plan, but it sure works out that way.
- WalterBright 9y ago
  Employer provided health care stuck around because it was paid for with pre-tax dollars, while buying it individually was with post-tax dollars. This hugely incentivizes employer paid plans. It has become so entrenched it has more or less morphed into a "right" that employers should pay for it.
abrichr 9y ago
> The doctor at the Orangevill hospital earns over a million dollars a year, and he works from home. Swipe, swipe, swipe, swipe - done. What kind of doctor is this, radiologist? I'm not aware of any mobile apps in use clinically, but a radiologist's job is to look at images on a computer screen. It doesn't matter where they do it from. Very little of it is automated. > One would think a private system would be more efficient ... but it's probably just as bad in the US. Canada is one of three countries in the world in which the government has a monopoly on healthcare payment. The other two are Cuba and North Korea. The United States has the least efficient healthcare system in the G20. Canada's is second least efficient. All of the others have two tier systems.
- diggernet 9y ago
  Interesting perspective on single-payer.
- alexasmyths 9y ago
  My family member sits on the board of the hospital and described to me the technology advances enabling the doctors to 'do more' in the same time. The fact is he ears over $1M working from home, inspecting imaging. Doctors should probably be highly paid but this is too much.
WalterBright 9y ago
The AMA is empowered by government to restrict the supply of doctors. The purpose is to keep doctor compensation high. See "Competition and Monopoly in Medical Care" by Frech

hkmurakami 9y ago

>Almost all of the growth in top American earners has come from just three economic sectors: professional services, finance and insurance, and health care, groups that tend to benefit from regulatory barriers that shelter them from competition. >The groups that have contributed the most people to the 1 percent since 1980 are: physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives. Not a surprising result at all when you consider that the bottom of the top 1% has an income of high 6 figures to somewhat above $1M. That number is something very achievable for the most successful "professionals" -- doctors, lawyers, bankers (not HF managers), traders, and there are a lot of these people out there! It's a natural consequence that if you look for a large number of people earning $1M, you'll end up with highly successful "professionals" rather than outlier level wealth from business ownership, which is much more rare.

danharaj 9y ago
Im very confident the author knew this and thought this little shell game would make his calls for deregulation look convincing.
- deleted 9y ago
  [deleted]
pdonis 9y ago
*> business ownership, which is much more rare. First, you're assuming that all these "professionals" are not also business owners, which is often false; doctors and lawyers earning enough to put them in the top 1% are most likely owners of or partners in a private practice. Second, if we restrict "business ownership" to those who are not "professionals", the fact that it is rare is a consequence of regulation, not an independent fact. Regulatory barriers don't just benefit "professionals" who have the requisite qualifications; they also hamstring people trying to start businesses not in those particular "professional" sectors. So the result is only "not surprising" if you take the level of regulation we have now for granted.
9y ago

neil_s 9y ago

This is such an interesting article, attempting to answer one of the biggest questions of the 21st century in one fell swoop. However, I'm not sure all of the reasoning and analysis holds up. For example, software engineers with salaries over 390K are far from rare in the US, and Switzerland has both large numbers of bankers per capita and private doctors with incredibly high incomes.

mcguire 9y ago
In terms of income, anyone with an income greater than $390,000 per year is pretty rare. Roughly 99% of the population make less, in fact.

balance_factor 9y ago

It's interesting what words are not in the article. Words like heir, inheritance, profit, interest, rentier. The word rent is there, but assumed as a tenant, not landlord. I assume the Forbes 400 richest are in the 1%. How did the Koch brothers get their $100 billion? Where did the Waltons get their $140 billion? Where did the Mars family get their $75 billion? The article makes it sound like these people became rich when they decided whether or not to go to law school. It's important to note how in the US how FIRE (Finance, Insurance, Real Estate) and health care affect the economy. But a lot of what puts people at the top is at which hospital they took their first breath.

ameister14 9y ago
There are millions of people in the 1%. The 400 people at the very top aren't going to come into it much.
- hn_throwaway_99 9y ago
  But even within the 1%, the income distribution is highly skewed, i.e. those 400 people are responsible for a very sizable total of the overall wealth within the 1%.
  - MuffinFlavored 9y ago
    i'd be curious to know around what portion the 400 people are responsible for
    - llamataboot 9y ago
      "With a combined worth of $2.34 trillion, the Forbes 400 own more wealth than the bottom 61 percent of the country combined, a staggering 194 million people. The median American family has a net worth of $81,000. The Forbes 400 own more wealth than 36 million of these typical American families." http://www.ips-dc.org/billionaire-bonanza/ http://www.ips-dc.org/billionaire-bonanza/

whatyoucantsay 9y ago

Few things are sadder than seeing Britain and China post equal "gains" for the 1 percent.

tveita 9y ago

"Workers at the 90th percentile of the income distribution for professionals make 3.5 times the earnings of the typical (median) worker in all occupations in the United States. Only Mexico and Israel, which have very high inequality, compensate professionals so disproportionately. In Switzerland, the Netherlands, Finland and Denmark, the ratio is about 2 to 1." It's hard to find comparable numbers, but aren't the median wages higher in all those countries? The article vaguely makes it sound like it's just a matter of paying highly-paid professionals less, but would that lift the bottom or just concentrate the money to an even thinner slice of the population?

Spooky23 9y ago
That’s already happening. Remember they usually talk household income — the 90th percentile couple is two professionals. We have this massive underclass that is growing faster. The US is going to be like Brazil in 15-20 years. I’m sorry for my son’s generation.
jopsen 9y ago
> It's hard to find comparable numbers, but aren't the median wages higher in all those countries? Last I looked no; the bottom 30% is where Denmark does better than the US. The median wages are similar, maybe slightly higher in the US. > The article vaguely makes it sound like it's just a matter of paying highly-paid professionals less, but would that lift the bottom or just concentrate the money to an even thinner slice of the population? Good question. Probably you have to hit the super rich 0.001% with massive taxes, or an aggressive estate tax (preventing wealth from accumulating across generations). But even with that, good regulation that facilitates competition is probably necessary. I wouldn't be surprised if that makes a bigger splash than the top 0.001%. Note: there is good and bad regulation. Denmark is heavily regulated, but a lot of it is efficient and fosters competition.
WalterBright 9y ago
It's necessary to be careful with such articles. The correct figures to use should be "total employee compensation", which includes the value of employee benefits. These average about 30% on top of salary in the US.

cperciva 9y ago

In the United States, the richest 1 percent have seen their share of national income roughly double since 1980, to 20 percent in 2014 from 11 percent. Not true. The highest income 1% have seen their share of national income roughly double. But the highest income 1% is not the richest 1%.

tailrecursion 9y ago
Is this change in distribution over time being measured using income tax returns? In the 1950s the highest marginal rate was about 90%, and there were many loopholes and special rules. How do we know those rich people back then were accurately declaring income above $250,000?
twoodfin 9y ago
The wording also (deliberately?) suggests that "they" in 1980 is the same as "they" in 2014, which of course is far afield of the truth. Americans enter and fall out of the 1% all the time. Some significant fraction of 1%'ers are there for the one and only year they sell their home, for example.
maxerickson 9y ago
It would be interesting to see how the sets overlap from year to year.
WalterBright 9y ago
It's normal for articles like this to conflate income and wealth whenever it's convenient to whatever point they're trying to make. For example, one might see an article complaining that some percentage of wealthy people didn't pay income tax last year. But an income tax is a tax on income, not wealth, and it's commonplace for wealthy people to have a bad year and lose money.
mcguire 9y ago
"Some readers wondered if the 1 percent by wealth weren’t an entirely different group of people from the 1 percent by income. But there is substantial overlap: the Fed data suggests that about half of the top 1 percent of earners are also among the top 1 percent in the net worth category." https://mobile.nytimes.com/blogs/economix/2012/01/17/measuring-the-top-1-by-wealth-not-income/?referer=android-app://com.google.android.googlequicksearchbox https://mobile.nytimes.com/blogs/economix/2012/01/17/measuri...

sigi45 9y ago

Whatever the reason was, that a family or people where able to accumulate that much wealth: I believe, there should be an upper limit. It is not okay for people like Bill Gates (i do think he is a good person) or Mark Zuckerberg to have that much power on such a small planet. It is awesome that someone like Bill Gates spends tons of money for research etc. but he should not be able to make such huge decisions in a modern democratic society. There is a good reason to allow people to accumulate wealth. Why shouldn't someone be allowed to not spend all his/her money for alcohol, party and cars or whatever and instead put the money into real estate for there children. But something like 5-10 Million per Child is still super reasonable. Perhaps that leads the way to a more fair feature where it is not necessary for anyone anymore to horde money for the familiy heritage.

auggierose 9y ago
I don't know. Somebody needs to make those huge decisions, and it is not always clear if that should be by democratic means (here is to you, Trump and Brexit).
- Retra 9y ago
  Trump and Brexit are the result of people with too much money making terrible decisions for the rest of us. They're not evidence that rich people should have more power. But incidentally, someone's ability to make a lot of money (or worse: inherit it) doesn't imply that they have any preferential ability to spend it in a way that benefits society. And when someone has the unchecked power to spend massive sums of money on themselves in ridiculous and frivolous ways, it's pretty clear that they have too much power. Because whoever should be making those decisions should certainly not be doing that. Bill Gates rented a yacht for $5M/week. How is this not a clear waste? How much suffering could have been avoided at that cost? At least put it in some kind of public trust where such behavior can be properly considered corruption.
  - heylook 9y ago
    > Bill Gates rented a yacht for $5M/week. How is this not a clear waste? Those $5M don't just get lit on fire. They transfer to some other set of people who can then decide what to do with it, and then onto some other set of people. Maybe the yacht's owner donates all proceeds to feed starving children.

Mitchhhs 9y ago

Is inequality a feature or a bug of capitalism? Seems like the general thinking is that its a feature in-so-much as it encourages innovation, entrepreneurship, etc. It seems like it becomes a bug when it reaches a level in which it creates a positive feedback loop of more inequality. As with anything, i've noticed the discussion is really about how much, not should it exist at all. Almost every debate in American politics is painted as black and white, whereas the actual debate is where we fall on a spectrum. It seems like everyone disagrees so much, but really I think we are haggling over a slight deviation to the right or to the left and because we have to talk about everything in such black and white terms, the real discussion gets lost. We all agree on much more than we disagree on.

jabretti 9y ago
It's a feature, not of capitalism, but of human interactions in general. (It should not have escaped our attention that any time an "alternative to capitalism" is tried it inevitably winds up with wealth and power even more heavily concentrated, this time in the hands of the people whose job it was to ensure that wealth and power were shared fairly.) And, to a large extent, of animals. I suppose there are some animal species where all members are more or less equal, but they're probably mostly solitary animals which rarely interact with each other. In social species, massive inequalities, particularly between males, are the norm.
- humanrebar 9y ago
  Good point. Pointing out the flaws of the current system and actually realizing improvements are two different things.
aantix 9y ago
"Human beings are born with different capacities. If they are free, they are not equal. And if they are equal, they are not free." -- Aleksandr Solzhenitsyn
- fallingfrog 9y ago
  “Alike and equal are not the same thing at all.” ― Madeleine L'Engle, A Wrinkle in Time

vtange 9y ago

I'm surprised the words "capital gains" are not mentioned at all in the article. It's already well known that the richest of the 1% did not get there purely through a high wage/salary. Some might blame loose monetary policy for providing easy money for the 1% in the USA (if you can borrow money and speculate for free, why not, after all), but if that's the case Japan really stands out; they've been QE'ing since their '80s bubble popped and they've managed to keep a relatively good Gini coefficient relative to the rest of the developed world (they're more egalitarian than their East Asian peers). You'd think that having two lost decades with your economy stuck in neutral, the Japanese 1% would just leave their country in the dust.

jopsen 9y ago
> It's already well known that the richest of the 1% did not get there purely through a high wage/salary. This talks about the 1%, not the few super rich, which is less than 1 out of 100. It's confusing because often when people say "the 1%" they actually mean multi-millionaires; which is less than 1%. Most 1%'ers are elite professionals. And this articles argues they make more money because of regulation that creates barriers to competition. The super rich multi-millionaires and billionaires is a different story.
- mcguire 9y ago
  The threshold of the top 1% by wealth is $8.4 million in the US. https://mobile.nytimes.com/blogs/economix/2012/01/17/measuring-the-top-1-by-wealth-not-income/ https://mobile.nytimes.com/blogs/economix/2012/01/17/measuri...

200x0 9y ago

Funny to see you people discussing petty caviar-allowance inequality so fervently within your own arbitrary Western borders yet never giving much mindshare to the rampant "developing" country exploitation that is the very source of your general prosperity. I'm a citizen of third-world country that is being sucked dry by the West for its resources and getting its people shackled to the ground by direct support for the ruling dictatorial regime. I don't even know why I'm writing this..

lovich 9y ago
I see what you mean and it is bad. Until we have nations merge however, there's nothing we can do even when the system is working at it's theoretical perfection. Our people live in demarcated areas with separate rule sets. When it comes to the rich vs poor in Western society we are ostensibly equal and many people are upset because reality doesn't reflect that. When it comes to the US vs say Burkino Faso, what would the correct course of action be? There's exploitative actions being taken by individuals and companies against developing nations that could stop, but then what happens? I don't think sweatshops are good but no western company is going to source goods from them if they aren't cheap as the quality isn't the same. We could try to help other nations get to the same quality of life, but many have made it explicitly clear that they don't want interference from foreign powers. Do we act paternalistic and do what we think is right for other people which removes their autonomy? Do we avoid that and avoid exploiting them, but leave them in the dust because they have nothing we want or need if they are using regulation and price arbitrage to gain business? Do we continue as we currently do which sends money into these countries which should help them develop, but tends to be spread unevenly and causes a lot of human despair? I can't tell what the right answer is, I can't tell if there even is a right answer
- 200x0 9y ago
  1. Exploitative actions taken by individuals and companies are nothing compared to the ones taken by your governments. Europe is running cheap education improvement programs here as we speak, and other such show-tell crap, but they also sign exploitative deals and house corrupt blood money of my dictator in your banking systems - giving him free-pass to do as he likes, as long as the deals are signed and people are silenced. It's realpolitik all the way down. 2. We do want interference, interference against your current interference. 3. Just let us establish our own instutitions, stop helping and making deals with criminals, stop putting on the mask of being humanitarian and then exploiting the living shit out of us. 4. Work visas - please make them available for the skilled and offer us some channel for escape. We are majorly landlocked because our passports don't even grant us a tourist visas to anywhere other than bumhole Somalia or Afghanistan. I could go on for ages but you people have so vastly different view on these issues I don't even feel like it would be worth my time.

candiodari 9y ago

TLDR: the public secret is that if you take away the top 0.01% who started businesses like Amazon, Microsoft, Google, etc, the big driver of inequality is not capitalism/economy/... The big driver of inequality ( 0.01% to 1% ) is ... government regulation. Directly, as in the government hires tens of thousands of highly paid people. And, more offensive at least to me, government regulation giving massive advantages to specific businesses (most recent "wtf" example I think would be equifax, with the government rallying behind them and (worst of all) effectively forcing large banks to buy from them). Businesses pushed like this by governments include Boeing, Oil companies, Tesla, SpaceX, ... But this is only the very upper layer. There is a huge "second" layer that includes large parts of the legal space, the health care space, the education space, where hundreds of thousands of people make $400k+ per year because ... well because the government says so. Which of course very much opposes most of the viewpoints taken on this site. Given that this is what gives over half of the 1% owes their wealth directly or indirectly to taxes (or in the case of things like equifax "hidden taxes". Taxes, as in government forces you to pay, but you pay in your mortgage bill, you pay in charges on your bank account, etc ...) ... there is a strong case to be made that more taxes ... will increase inequality. At least as long as the government doesn't slim down a LOT.

squozzer 9y ago

>the political causes of the 1 percent’s rise are directly under the control of citizens. Patently false. The political causes are directly under the control of the US state and federal legislatures, which are populated by whom?