Wealth Inequality
- Thread starter craft
- Start date
Has anyone seen the interesting dialogue with Financial Times and Piketty? FT poking into some of his assumptions and graphs and thinking that they don't really show any trend towards concentration at all!!
Amazing to think that if a few of his graphs don't add up then the whole thesis falls over.
Even if Piketty is wrong, still a convincing and interesting thesis to consider and conforms with the best method of knowledge accumulation as Karl Popper advises: hypothesise, then disprove; cf. build evidence then hypothesise...
Amazing to think that if a few of his graphs don't add up then the whole thesis falls over.
Even if Piketty is wrong, still a convincing and interesting thesis to consider and conforms with the best method of knowledge accumulation as Karl Popper advises: hypothesise, then disprove; cf. build evidence then hypothesise...
- Joined
- 8 June 2008
- Posts
- 12,919
- Reactions
- 18,942
yeap wanted to add a link yesterday:
but I agree an interesting concept
http://blogs.ft.com/money-supply/2014/05/23/data-problems-with-capital-in-the-21st-century/
but I agree an interesting concept
http://blogs.ft.com/money-supply/2014/05/23/data-problems-with-capital-in-the-21st-century/
- Joined
- 4 October 2012
- Posts
- 871
- Reactions
- 3
The Seven Richest Aussies Now Owning = As Much As The Bottom 20%
Reported by AAP
The combined wealth of Australia's seven richest people is greater than the poorest 1.73 million households, new figures show.
And the Australia Institute warns policies being adopted by the federal government are likely to widen the gap between the extremely wealthy and the nation's poorest. The institute's paper, Income and Wealth Inequality in Australia, reveals how a reduction over time of the top marginal income tax rate has helped the rich get richer and "widened the disparity between wealth and incomes in Australia", Fairfax Media reports.
The nation's seven richest people are Gina Rinehart whose wealth is estimated at $22 billion, Frank Lowy ($6.87 billion), James Packer ($6 billion), Anthony Pratt & Family ($5.95 billion), Ivan Glasenberg ($5.61 billion), Harry Triguboff ($4.95 billion) and Wing Mau Hui ($4.82 billion), for a total worth of $56.2 billion, figures from the Australian Bureau of Statistics show.
In comparison, the figures reveal the lowest 20 per cent of households own about $54 billion. In an attack on the Abbott government's proposed budget cuts targeting low-income families, the institute's report suggests the gap between rich and poor will grow if payments to low-income families are reduced further.
However, the institute's paper said tax cuts introduced by governments in the past eight years had contributed to the wealth divide, with the top 10 per cent of earners benefiting more than the bottom 80 per cent of taxpayers.
The article can be read here:- http://finance.ninemsn.com.au/newsbusiness/aap/8871219/seven-richest-aussies-equal-bottom-20
Reported by AAP
The combined wealth of Australia's seven richest people is greater than the poorest 1.73 million households, new figures show.
And the Australia Institute warns policies being adopted by the federal government are likely to widen the gap between the extremely wealthy and the nation's poorest. The institute's paper, Income and Wealth Inequality in Australia, reveals how a reduction over time of the top marginal income tax rate has helped the rich get richer and "widened the disparity between wealth and incomes in Australia", Fairfax Media reports.
The nation's seven richest people are Gina Rinehart whose wealth is estimated at $22 billion, Frank Lowy ($6.87 billion), James Packer ($6 billion), Anthony Pratt & Family ($5.95 billion), Ivan Glasenberg ($5.61 billion), Harry Triguboff ($4.95 billion) and Wing Mau Hui ($4.82 billion), for a total worth of $56.2 billion, figures from the Australian Bureau of Statistics show.
In comparison, the figures reveal the lowest 20 per cent of households own about $54 billion. In an attack on the Abbott government's proposed budget cuts targeting low-income families, the institute's report suggests the gap between rich and poor will grow if payments to low-income families are reduced further.
However, the institute's paper said tax cuts introduced by governments in the past eight years had contributed to the wealth divide, with the top 10 per cent of earners benefiting more than the bottom 80 per cent of taxpayers.
The article can be read here:- http://finance.ninemsn.com.au/newsbusiness/aap/8871219/seven-richest-aussies-equal-bottom-20
- Joined
- 10 December 2012
- Posts
- 3,632
- Reactions
- 9
I think we do need to start focusing on wealth as much as income. I can see the OECD countries moving towards plutocracy and possibly rebellion if the wealth deivide continues to escalate as it has over the last few decades.
http://yaleglobal.yale.edu/content/tale-two-middle-classes
The group that did very well was much poorer than the group whose incomes stagnated. In effect, the first group – “the winners” of globalization – had incomes ranging between $3 and $8 international dollars, that is, dollars of equal purchasing power across the globe, per person per day, amounts so low that in western countries virtually no people subsist on so little or amounts that are barely in the territory of what, again using rich world’s standard, is considered the lower middle class.
Thus while many relatively poor people did well during this latest globalization episode, those somewhat richer may have more complaints. People around the 80th global percentile, with incomes ranging from $13 to $27 international dollars per day, saw few improvements. Their incomes were stagnant or barely increasing.
Nine out of ten people around the global median, the “winners” of globalization, are from “resurgent Asia.” They are people from rural China, including some 150 million who have seen their real incomes increase by a factor of 2.5; rural and urban Indonesia, 40 million people whose real incomes doubled; or urban India, 35 million people with increases in excess of 50 percent. There are also workers from Vietnam, Philippines and Thailand. These “winners” belong to the middle or upper parts of their own countries’ income distributions.
On the other hand, those who did not see much of a gain in income are predominantly from the advanced economies. Lower income groups from three big rich countries particularly stand out: the US, Germany and Japan. The average real gain of the lower bottom half of US income distribution was 22 percent – that is, growth of less than 1 percent annually. For Germany it was a mere 4 percent, and Japan showed negative growth.
Suppose that the gains of the Asian middle class and the stagnation of the rich world’s middle class incomes are somehow related – be it through trade that depresses wages or pushes low-skilled into unemployment, or through outsourcing to low-wage economies – then the comfort that accompanies news of globally good changes evaporates. People might accept lack of income growth for a noble cause or a reason so abstract that there is no recourse. But if the cause is relatively concrete and if losses are linked to others’ gains, even if these others are less well-off, the workers with stagnant wages are less willing to accept the outcome.
This is not a zero-sum game though, because total global income increases, but the relative gains are unequally apportioned between the two middle classes.
These classes of “globalization losers,” particularly in the United States, have had little political voice or influence, and perhaps this is why the backlash against globalization has been so muted. They have had little voice because the rich have come to control the political process. The rich, as can be seen by looking at the income gains of the global top 5 percent in Figure 1, have benefited immensely from globalization and they have keen interest in its continuation. But while their use of political power has enabled the continuation of globalization, it has also hollowed out national democracies and moved many countries closer to becoming plutocracies. Thus, the choice would seem either plutocracy and globalization – or populism and a halt to globalization.
Another solution, one that involves neither populism nor plutocracy, would require enormous effort at the understanding of one’s own longer-term self-interest. It would imply more substantial redistribution policies in the rich world. Some of the gains of the top 5 percent could go toward alleviating the anger of the lower- and middle-class rich world’s “losers.” These need not nor should be mere transfers of money from one group to another.
Instead, money should come in the form of investments in public education, local infrastructure, housing and preventive health care. But the history of the last quarter century during which the top classes in the rich world have continually piled up larger and larger gains, all the while socially and mentally separating themselves from fellow citizens, does not bode well for that alternative.
http://yaleglobal.yale.edu/content/tale-two-middle-classes
The group that did very well was much poorer than the group whose incomes stagnated. In effect, the first group – “the winners” of globalization – had incomes ranging between $3 and $8 international dollars, that is, dollars of equal purchasing power across the globe, per person per day, amounts so low that in western countries virtually no people subsist on so little or amounts that are barely in the territory of what, again using rich world’s standard, is considered the lower middle class.
Thus while many relatively poor people did well during this latest globalization episode, those somewhat richer may have more complaints. People around the 80th global percentile, with incomes ranging from $13 to $27 international dollars per day, saw few improvements. Their incomes were stagnant or barely increasing.
Nine out of ten people around the global median, the “winners” of globalization, are from “resurgent Asia.” They are people from rural China, including some 150 million who have seen their real incomes increase by a factor of 2.5; rural and urban Indonesia, 40 million people whose real incomes doubled; or urban India, 35 million people with increases in excess of 50 percent. There are also workers from Vietnam, Philippines and Thailand. These “winners” belong to the middle or upper parts of their own countries’ income distributions.
On the other hand, those who did not see much of a gain in income are predominantly from the advanced economies. Lower income groups from three big rich countries particularly stand out: the US, Germany and Japan. The average real gain of the lower bottom half of US income distribution was 22 percent – that is, growth of less than 1 percent annually. For Germany it was a mere 4 percent, and Japan showed negative growth.
Suppose that the gains of the Asian middle class and the stagnation of the rich world’s middle class incomes are somehow related – be it through trade that depresses wages or pushes low-skilled into unemployment, or through outsourcing to low-wage economies – then the comfort that accompanies news of globally good changes evaporates. People might accept lack of income growth for a noble cause or a reason so abstract that there is no recourse. But if the cause is relatively concrete and if losses are linked to others’ gains, even if these others are less well-off, the workers with stagnant wages are less willing to accept the outcome.
This is not a zero-sum game though, because total global income increases, but the relative gains are unequally apportioned between the two middle classes.
These classes of “globalization losers,” particularly in the United States, have had little political voice or influence, and perhaps this is why the backlash against globalization has been so muted. They have had little voice because the rich have come to control the political process. The rich, as can be seen by looking at the income gains of the global top 5 percent in Figure 1, have benefited immensely from globalization and they have keen interest in its continuation. But while their use of political power has enabled the continuation of globalization, it has also hollowed out national democracies and moved many countries closer to becoming plutocracies. Thus, the choice would seem either plutocracy and globalization – or populism and a halt to globalization.
Another solution, one that involves neither populism nor plutocracy, would require enormous effort at the understanding of one’s own longer-term self-interest. It would imply more substantial redistribution policies in the rich world. Some of the gains of the top 5 percent could go toward alleviating the anger of the lower- and middle-class rich world’s “losers.” These need not nor should be mere transfers of money from one group to another.
Instead, money should come in the form of investments in public education, local infrastructure, housing and preventive health care. But the history of the last quarter century during which the top classes in the rich world have continually piled up larger and larger gains, all the while socially and mentally separating themselves from fellow citizens, does not bode well for that alternative.
DeepState
Multi-Strategy, Quant and Fundamental
- Joined
- 30 March 2014
- Posts
- 1,615
- Reactions
- 81
Not really. Economic growth is occurring in the US, as is job creation. Yet inequality is getting worse.
pixel
DIY Trader
- Joined
- 3 February 2010
- Posts
- 5,359
- Reactions
- 345
Can you elaborate?
Who designed this? and why?
What do they stand to gain when the lesser equal can't even afford to consume anymore?
- Joined
- 14 February 2005
- Posts
- 15,217
- Reactions
- 17,294
I'm not sure how deliberate (or otherwise) it is, but it's undoubtedly a consequence of policies in place. That is, a different set of policies would produce a different result, be it better or worse but it would be different.
A lot of it comes down to a broad shift in society toward a far greater emphasis on money and that goes for just about everything. There was a time not that long ago when a lot of things were measured in physical terms whereas now it's purely financial.
I think that inherently Australia is a lot less equal than we like to make out. The well off in this country hold their vanity as valuable as they do their money.
There are a long list of things which are not so equal in Australia which are promptly ignored in favor of referring exclusively to our supposed "universal healthcare" which is far from universal and very expensive and our slightly higher minimum wage laws which do not seem to benefit anyone - try raising a kid and paying rent in Sydney on a MacDonald salary and the comparison to the US is not so different.
There has been a worldwide trend in OECD countries to crap on the youth who are now approaching middle age so it will be interesting to see how that one pans out.
Look at Greece as a classic example, lifetime indexed pensions for baby boomers and 45% unemployment for the youth.
There are a long list of things which are not so equal in Australia which are promptly ignored in favor of referring exclusively to our supposed "universal healthcare" which is far from universal and very expensive and our slightly higher minimum wage laws which do not seem to benefit anyone - try raising a kid and paying rent in Sydney on a MacDonald salary and the comparison to the US is not so different.
There has been a worldwide trend in OECD countries to crap on the youth who are now approaching middle age so it will be interesting to see how that one pans out.
Look at Greece as a classic example, lifetime indexed pensions for baby boomers and 45% unemployment for the youth.
- Joined
- 22 November 2010
- Posts
- 3,661
- Reactions
- 11
Julia
In Memoriam
- Joined
- 10 May 2005
- Posts
- 16,986
- Reactions
- 1,973
In the eyes of many, you - at over $100K p.a. - would be considered one of these well off.
I don't imagine any amount of money would ever ameliorate your relentless negativity.
DeepState
Multi-Strategy, Quant and Fundamental
- Joined
- 30 March 2014
- Posts
- 1,615
- Reactions
- 81
Australia's Gini coefficient for household incomes (3.2) is far less than for the US (World Bank 2014: 8.4):
Source: Hilda, 2014
Also, Australia's levels of outright, absolute, poverty are declining. Definitions can vary, the direction of travel is downwards:
Source: Hilda
As to the issue of Greek youth unemployment, the figure is correct, but the meaning is often lost in fervent hand gestures. The following shows the total population, labour force, employment and unemployment rate for the 15-19 year olds. The same pattern applied for the 19-24 year old classification. Unemployment shot up as a result of a very small proportionate fall in the number of employed relative to the total labour force. Although the labour force also declined relative to the population due to things like pursuit of further study, the proportionate fall (which would have to be even more enormous in a relative sense to balance things) did not make up for the proportionate decline in employment. In other words, the figures overstate the actual importance of this on a national policy basis. Of the youth aged 15-19, most are not looking for a job. Of the small proportion that are, a larger number are unemployed. This is still a small fraction of the population of 15-19 year olds.
As for kids moving into middle age, even the 24 year old at the start of the crisis would only be celebrating their 30th birthday right now. Oh the memories.
Source: National Statistical Service (Greece), FactSet
I would be interested as to your response to Pixel's about who designed/wants it this way. The response offered related to "they" want it this way and referred to burger flippers. I'm not sure about your position. Are you implying that Americans generally want to live in an increasingly unequal CAPITALIST society in which 40% don't have any meaningful CAPITAL to their name at all, the middle 20% have enough to buy an SUV, insure it and maybe afford the garage to house it? Surely not.
Source: US Census Bureau
Who are the "they"?
The sad part is that is really not a lot of money. It just means I have kept a job for a while.
Because Australia has a class system and I am from the class which is required to work, my income is irrelevant as it is small compared to the assets of the landed elite and the costs which the landed elite place on me so as to extract as much money as possible from me to prevent me from ever finding freedom.
If you read any of the reddit threads on the plight and fight on the burger flippers in the USA you'll see the vast majority of commentators do NOT support their cause.
Likewise the vast majority of Australians appear not to give a stuff that low income people who previously could get by with the bit of hard work and savings cannot survive any longer.
So I don't think we're all that different to the USA on that front.
DeepState
Multi-Strategy, Quant and Fundamental
- Joined
- 30 March 2014
- Posts
- 1,615
- Reactions
- 81
DeepState
Multi-Strategy, Quant and Fundamental
- Joined
- 30 March 2014
- Posts
- 1,615
- Reactions
- 81
The plight of flippers is more than evident. You indicated that "I think Americans prefer it that way and its their choice". Are you defining Americans to be "the vast majority of social commentators?" Like the unemployed 15-19 year olds in Greece, that's not exactly a representative sample. Or are you just cherry picking, as it seems you are not referring to the populace more generally anymore? I have not read many reddits on NSA intelligence practices, televangelists, special interest groups and government more generally. I suspect they are not particularly well supported by Noam Chomsky, George Soros, John Stewert, Michael Moore or John Snowden - just to name a few social commentators that hit the news every now and then. Pull it all down, the burger flippers, the corporate chieftans, the military complex, the medical system, corporate pensions...the list goes on. Let's pull down the whole edifice and start again. I guess the plight is a little wider and less discriminant than burger flippers might have it. Is it only the burger flippers who are not universally supported?
As to whether great swathes of Australians could not give a stuff about low income, unwashed, people of the nation who...my gosh...voted in the last Federal election, here are the results of how people classify themselves (yes, self-classified class...you are what you think you are). I suspect the working poor actually care about working and being poor. Some of the middle class would understandably be concerned for slipping into the working poor category and would thus give a stuff too. Some even have a self-destructive mentality and foreast that fate ahead of some actual development.
Notice how the number of self-classified working poor has now declined to the levels of the prosperous years? Amazingly, too, in any group where effort and outcome are differentiated, income dispersion occurs. There will always be a dispersion and a self-assessed division on those lines. What actually is working class? Who actually are oppressed....do you count those who actually earn upwards of 1.5x AWE and find it hard to drag their feet to work as oppressed? Should the 70yr old living on a pension actually give a stuff?
Source: ANU
Income is mostly irrelevant as most of the inequality is from capital gains and most wealth is from existing assets. When a million dollar house goes up by 10% a year marginal differences in income start to not matter.
A person in Australia working in a menial job cannot pay rent and survive when in the past they could. That is rising inequality.
30 is approaching middle age. Middle aged goes from 35-55 it is just that there are so many old people in the country now that mentalities are starting to shift.
