The rich are getting richer -- right? Steven Cunningham: Gazette News Online

[December90]

Link to the full article

One of the most enduring economic myths in our society is that the rich keep getting richer while the poor keep getting poorer. It isn't true.

When most people think of the rich, they probably are thinking of people with great wealth. When they think of the poor, they probably are thinking of people with low incomes.

While there's obviously a correlation between wealth and income, they're not the same. And we shouldn't confuse them.

A retiree who has $1 million invested in CDs is a millionaire; most people would consider this person wealthy. But at a 2.5 percent rate of return on the CDs -- about twice what the typical bank is paying today -- this person could have an annual income of just $25,000.

We don't have to rely on hypotheticals to illustrate this. The households of people ages 70 to 74 have the highest average wealth of any age group in America, but less than half the income of those in the 35 to 44 age bracket.

[SkinsHokieFan]

I am not neccessarily worried that the "rich are getting richer"

Prosperity tends to bring up all boats, albeit some at a different pace then others.

What I am more concerned about it is how damn expensive it is for the middle class to live anymore. Between at least a 1500 dollar mortgage, 300-400 in bills monthly, near 4 dollar gas, and expensive groceries, someone making 85,000 in the DC area is just barely getting by on their pay checks

And God forbid you have something awful happen to you, be it something in your home or an accident.

[DRSmith]

The rich getting richer is not a myth, example during the financial meltdown a few people made billions, execs still got millions and millions got to lose thier jobs, or have the crisis used to lower their wages and raise the amounts they paid for pension and benefits.

As a result of the gulf oil spill average folks lost work and gas went up and yet execs got bonuses

[Burgold]

Look at the number of billionaires today versus the number of billionaires ten years ago.

[Kosher Ham]

Everyone is getting poorer.

That small percentage of people that are already and do get richer, is indeed minimal.

Take a moment to look around.

[SkinsHokieFan]

Look at the number of billionaires today versus the number of billionaires ten years ago.

I think as we spoke about last week, my bigger concern is how the heck can the middle class afford to live.

I am not as concerned that there are more billionaires because billionaires tend to arise out of innovation. 10 years Mark Zuckerberg was a high school senior. Now he is worth well over 6 billion dollars and has changed the way people interact.

Steve Jobs 10 years ago was the head of a company whose stock was trading at 3 dollars.

What worries me though is how costs clearly out pace wage growth for the middle class. The absurd housing boom, and the fact that you can no longer live without a cell phone/internet, gas at 4.00 and limited public transportation options, insurance for anything, going to school, etc.

The middle class is getting its ass handed to it, to the point where people who have saved up 1-2 million dollars for retirement are finding that to be too little

[zoony]

A retiree who has $1 million invested in CDs is a millionaire; most people would consider this person wealthy. But at a 2.5 percent rate of return on the CDs -- about twice what the typical bank is paying today -- this person could have an annual income of just $25,000.

plus his social security, plus his pension.

plus, he's got his house paid off and kids are grown up. Plus his wife's retirement and social security. So he's making $80,000+ a year with no mortgage. I bet he drives a nice car.

But even forgetting all that. Let's just say that this $1million is all he has. This absurd example above somehow takes as fact that the principal should not be touched.

If you retire at 65 with $1 million in the bank, that's $40,000 a year until the age of 90. Add in social security, and again, that's a damn nice living with no kids to support. What is it, $70k a year or so?

And that's not even taking interest into account. I'm too lazy to do the math, interest on a declining principal. But it would be substantial.

Therefore, I refuse to read this article any further than what is in the OP. It's a steaming turd.

...

[Popeman38]

plus his social security, plus his pension.

plus, he's got his house paid off and kids are grown up. Plus his wife's retirement and social security. So he's making $80,000+ a year with no mortgage. I bet he drives a nice car.

But even forgetting all that. Let's just say that this $1million is all he has. This absurd example above somehow takes as fact that the principal should not be touched.

If you retire at 65 with $1 million in the bank, that's $40,000 a year until the age of 90. Add in social security, and again, that's a damn nice living with no kids to support. What is it, $70k a year or so?

And that's not even taking interest into account. I'm too lazy to do the math, interest on a declining principal. But it would be substantial.

Therefore, I refuse to read this article any further than what is in the OP. It's a steaming turd.

...

The point of the article still stands.

The only group experiencing a decline in income was the richest 1 percent.

We often hear, for example, that the top 20 percent of U.S. households receive roughly 50 percent of total income, while the bottom 20 percent receives less than 4 percent. According to the Census Bureau's household data and quintile distribution, this is correct.

The problem is that we are not told that the top 20 percent of households includes four times as many workers as the bottom 20 percent, and nearly six times as many full-time, year-round workers.

You know the saying:

Lies, damned lies, and statistics

Funny how you dismiss this use of statistics outright. Yet somehow the statistics that state the opposite are parroted on this board day after day....

[PeterMP]

The point of the article still stands.

You know the saying:Funny how you dismiss this use of statistics outright. Yet somehow the statistics that state the opposite are parroted on this board day after day....

"We often hear, for example, that the top 20 percent of U.S. households receive roughly 50 percent of total income, while the bottom 20 percent receives less than 4 percent. According to the Census Bureau's household data and quintile distribution, this is correct.

The problem is that we are not told that the top 20 percent of households includes four times as many workers as the bottom 20 percent, and nearly six times as many full-time, year-round workers."

Can somebody explain how that is relevant?

Am I suppossed to be surprised that the poor have households where people can't/don't work?

That the wealthy are mostly stable homes with two fully functional adults with few to no kids and minimal burdens in terms of aging/disabled parents/children/relatives living with them without a good support system other than non-working family members?

I saw piece on one of the news shows the other day about disabled vets. The piece focused on a family where the husband/father was disabled, and the family (wife and parents) had massively restructured their life, including quiting jobs to take care of the husband/father.

They are a poor household (the parents sold their house and moved in with their son's family) with a relatively large number of non-workers in their household.

Does that make their situation less of an issue or less worrisome in terms of our nations status?

If a family who is poor can't afford to pay people to take care of their autistic child so one parent quits their poor paying job to say home with the child, is that not an issue?

[Burgold]

I think as we spoke about last week, my bigger concern is how the heck can the middle class afford to live.

I am not as concerned that there are more billionaires because billionaires tend to arise out of innovation. 10 years Mark Zuckerberg was a high school senior. Now he is worth well over 6 billion dollars and has changed the way people interact.

Steve Jobs 10 years ago was the head of a company whose stock was trading at 3 dollars.

What worries me though is how costs clearly out pace wage growth for the middle class. The absurd housing boom, and the fact that you can no longer live without a cell phone/internet, gas at 4.00 and limited public transportation options, insurance for anything, going to school, etc.

The middle class is getting its ass handed to it, to the point where people who have saved up 1-2 million dollars for retirement are finding that to be too little

And I agree. A side issue to this though is that manyof the real guys who change the way we work, live, and interact are not being carried along. I know people who have invented dozens of significant items, but because they did it as an employee their share in it is zero and they live ridiculously modestly esp. when considering the wealth their work has generated.

[LD0506]

Thank you zoony, those all get conveniently overlooked when people talk about "senior citizens". Don't forget that every place you go they get a SC discount as well. Checking out at the grocery store the other day the cashier asks "Do you want to donate $1 to senior citizens?" Told her "Hell no, they're better off than everyone else, how'bout they donate a dollar to MY grocery bill?", but w/ a grin.

Statistics are malleable, you can always choose some to support any premise, but that still doesn't prevent a tiny tear from trickling down my cheek when I see that billionaires lost so much on the market, or their portfolios shrank due to the real estate implosion. Poor ****s must have their servants clipping Bentley coupons these days.........

[shk75]

The reason people say this is because the gap between the two is increasing. Everything I have read has pointed to inequality increasing in the US and the US is the most unequal developed society in the world. What makes people angry is that right now you are pretty much either rich or poor and the middle class which would reduce the gap between the average rich or poor person is shrinking.

[Lombardi's_kid_brother]

There are three major problems right now.

1. The gap between the richest and the poorest is growing.

2. The Middle Class is shrinking, and

3. There is very little upward mobility in America.

[Dan T.]

There are three major problems right now.

1. The gap between the richest and the poorest is growing.

2. The Middle Class is shrinking' date=' and

3. There is very little upward mobility in America.[/quote']

**** it. I'm moving to Uranus.

[Bang]

Well, THATS a relief.

~Bang

[Burgold]

Well, THATS a relief.

~Bang

You want him to live in Uranus? :whoknew:

(Yes, I'm reverting to twelve year old humor and I am ashamed)

[Bang]

You want him to live in Uranus? :whoknew:

(Yes, I'm reverting to twelve year old humor and I am ashamed)

Naw,, I'm referring to the rich not getting richer.

I am so glad to learn that despite of every other indication to the contrary, that it's actually all just a load of bunk.

~Bang

[Fresh8686]

The US has one of the highest rates of inequality among all developed countries. The GINI Coefficient which is used to measure the degree of inequality in a country with 0 being perfectly equal and 1 being perfectly unequal had fully employed men age 25+ in 2005 at .424 which is a 35% increase from the GINI in 1967. Statisticians posit that if the current trend of the United States GINI index continues we will have the same level of income inequality as Mexico by the year 2043. I personally believe this will happen sooner, because the rates of inequality are accelerating if anything, what with the continued state of deregulation in the financial sector, cutting of social programs, re-pealing of the estate tax, outsourcing of manufacturing, technological advancements that make a particular job obsolete, and a whole host of other issues.

Income wages for those outside the top 20% have not appreciably increased in the last 30 years (when adjusted for inflation) yet efficiency has more than tripled, which means those who own the means of production are pocketing all the surplus.From 1979-2004 the after tax income of the top 1% has increased 167% compared to 69% for the top 20 and 9% for the bottom 20. This is income only, not including other wealth generators that the top 20% also enjoy.

[Burgold]

That really is pretty incredible. It's like when the Stalinists used to tell people that their family hadn't disappeared and that the history they lived through never happened. There are times when you shouldn't believe your own eyes, but there's also times you should ask what people are trying to sell you.

[Madison Redskin]

I am not neccessarily worried that the "rich are getting richer"

Prosperity tends to bring up all boats, albeit some at a different pace then others.

What I am more concerned about it is how damn expensive it is for the middle class to live anymore. Between at least a 1500 dollar mortgage, 300-400 in bills monthly, near 4 dollar gas, and expensive groceries, someone making 85,000 in the DC area is just barely getting by on their pay checks

And God forbid you have something awful happen to you, be it something in your home or an accident.

I absolutely agree. I don't care if the gap between rich and poor is growing. Isn't it a good thing if society has a lot more multi-millionaires and billionaires? I don't care if other people are getting insanely rich. Good for them. I just want to make sure the standard of living and income for the poor and middle class is stable or growing too.

[endzone_dave]

The productivity gap is also growing between the top 20% and bottom 80%. The guy putting burritos together at taco bell or the guy driving a forklift are probably more efficient than they used to be but the people designing computer chips, designing spacecraft, performing medical operations, building computer networks, writing software... are producing at a rate many times more than 20 years ago.

[Hubbs]

D90, I'm sorry, but your whole premise is a load of bull****. Of course retiree income goes down significantly. They're retired.

[Koolblue13]

I wish I was one of those not rich people with seven million dollars.

[The Evil Genius]

I am surprised this hasn't become a conservative talking point on Fox News yet, consider AIER (source of the original opinion piece) is affiliated with conservative think tanks.

[Predicto]

The article referenced in the OP is utter nonsense. Only someone who already decided what result they wanted to hear would find it persuasive at all.

The actual statistics are undeniable. The top one or two percent of the population are accumulating more and more of the nation's total wealth every year, while the middle class is shrinking dramatically. The Gini coefficient has grown dramatically. This is not some "liberal myth."

Whether or not this is a problem that needs to be fixed is a question that people can disagree on. Whether or not it is happening is not subject to debate. It is.