Inequality Did Start Around 1970 - Ludwig von Mises Institute Canada
The income and wealth divide that is now seen as a problem did start right around 1970 (depending on what type of data you want to look at to judge this, it started as early as 1968 or as late as 1973). The income divide is not fabricated, nor are these dates just pulled from thin air.
The Gini index is a very simple measure that shows the degree of income distribution within a country. A Gini figure of 0 would mean that everyone earns the same amount. A figure of 1 means there is a maximum degree of inequality. By this very common measure income inequality in the US bottomed out in 1968 and has advanced ever since.
The ratio of the average custom furniture wage to the minimum wage is a good way to gauge how much more the average wage earner makes relative to the bottom of the wage-earning scale. (Technically speaking the unemployed are the bottom rung of that ladder, but we ll just deal with those with jobs.)
A rising ratio means that the average wage earner is enjoying more income custom furniture growth than the minimum wage earners. Again, this figure was more or less constant until the late 1960s, custom furniture before it jumped. It was only the outbreak of the crisis in 2007 that really compromised this advance, though even that is now bygone past.
When I say it s not necessarily a problem I mean that earned income inequality is quite fair. Those who work hard, put in long hours, or have great ideas will see their incomes rise relative to those who lack those skills. They get richer as a reward, but we re all better off because of them as well. The problem right now is with unearned inequality.
How about we look at how income is defined with money. The period of time right around 1970 was unique in recent history as it was the end of the Bretton Woods era and the start of a pure fiat standard by all the central banks of the Western world. It ushered in a period of unanchored central bank credit creation, and government deficit spending. If one wants to blame something for the inequality that coincided exactly with this momentous event, why not pick the obvious reason?
David Howden is Chair of the Department of Business and Economics, and professor of economics at St. Louis University, at its Madrid Campus, Academic Vice President of the Ludwig von Mises Institute of Canada , and winner of the Mises Institute’s Douglas E. French Prize . Send him mail . Tags: income inequality , Inflation
You are also missing something rather obvious – this period coincides with mass low-skill custom furniture immigration custom furniture and the beginning of deindustrialization – both very significant drags on wages. Capital reaps this decline in wages in profits, which of course begets greater inequality.
Anyone who is even marginally familiar with Austrian Economics should be smart enough to know that the minimum wage is a purely political construct which tells us absolutely nothing about the economy or inequality meaning the ratio of average custom furniture wage to minimum wage does not tell us anything about inequality, it tells us about how wage data drives political action and nothing more.
To custom furniture really show what this article is attempting to show it should be measuring the ratio of wage income to non wage income, even better if it could be calculated wage income + net small business profits (those reported on personal income taxes) to non wage income. This would accurately measure the shift in income away from wages and into financial instruments and provide a correlation between the growth custom furniture of fiat money and active central custom furniture bank interventions and the growth in inequality measured by the GINI coefficient.
Instead they give us the libertarian populist equivalent of the dreck you find on DailyKos. Low information libertarians and free market types will eat it up but the graph doesn't custom furniture say what the author claims it says and is utterly worthless meaning the entire article is just random speculation written as if it were presenting new information.
Email * Categories Announcements Banking Capitalism Civil Liberties Economics Education Environment Epistemology Events Foreign Policy Health Care History Intellectual Property Law Lifestyle Methodology Mises on Policy Music Philosophy Politics Politique Regulation Socialism custom furniture Toronto Austrian Scholars Conference Trade Uncategorized War on Drugs Archives April 2015 March 2015 February 2015 January 2015 December 2014 November 2014 October 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November custom furniture 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2
The income and wealth divide that is now seen as a problem did start right around 1970 (depending on what type of data you want to look at to judge this, it started as early as 1968 or as late as 1973). The income divide is not fabricated, nor are these dates just pulled from thin air.
The Gini index is a very simple measure that shows the degree of income distribution within a country. A Gini figure of 0 would mean that everyone earns the same amount. A figure of 1 means there is a maximum degree of inequality. By this very common measure income inequality in the US bottomed out in 1968 and has advanced ever since.
The ratio of the average custom furniture wage to the minimum wage is a good way to gauge how much more the average wage earner makes relative to the bottom of the wage-earning scale. (Technically speaking the unemployed are the bottom rung of that ladder, but we ll just deal with those with jobs.)
A rising ratio means that the average wage earner is enjoying more income custom furniture growth than the minimum wage earners. Again, this figure was more or less constant until the late 1960s, custom furniture before it jumped. It was only the outbreak of the crisis in 2007 that really compromised this advance, though even that is now bygone past.
When I say it s not necessarily a problem I mean that earned income inequality is quite fair. Those who work hard, put in long hours, or have great ideas will see their incomes rise relative to those who lack those skills. They get richer as a reward, but we re all better off because of them as well. The problem right now is with unearned inequality.
How about we look at how income is defined with money. The period of time right around 1970 was unique in recent history as it was the end of the Bretton Woods era and the start of a pure fiat standard by all the central banks of the Western world. It ushered in a period of unanchored central bank credit creation, and government deficit spending. If one wants to blame something for the inequality that coincided exactly with this momentous event, why not pick the obvious reason?
David Howden is Chair of the Department of Business and Economics, and professor of economics at St. Louis University, at its Madrid Campus, Academic Vice President of the Ludwig von Mises Institute of Canada , and winner of the Mises Institute’s Douglas E. French Prize . Send him mail . Tags: income inequality , Inflation
You are also missing something rather obvious – this period coincides with mass low-skill custom furniture immigration custom furniture and the beginning of deindustrialization – both very significant drags on wages. Capital reaps this decline in wages in profits, which of course begets greater inequality.
Anyone who is even marginally familiar with Austrian Economics should be smart enough to know that the minimum wage is a purely political construct which tells us absolutely nothing about the economy or inequality meaning the ratio of average custom furniture wage to minimum wage does not tell us anything about inequality, it tells us about how wage data drives political action and nothing more.
To custom furniture really show what this article is attempting to show it should be measuring the ratio of wage income to non wage income, even better if it could be calculated wage income + net small business profits (those reported on personal income taxes) to non wage income. This would accurately measure the shift in income away from wages and into financial instruments and provide a correlation between the growth custom furniture of fiat money and active central custom furniture bank interventions and the growth in inequality measured by the GINI coefficient.
Instead they give us the libertarian populist equivalent of the dreck you find on DailyKos. Low information libertarians and free market types will eat it up but the graph doesn't custom furniture say what the author claims it says and is utterly worthless meaning the entire article is just random speculation written as if it were presenting new information.
Email * Categories Announcements Banking Capitalism Civil Liberties Economics Education Environment Epistemology Events Foreign Policy Health Care History Intellectual Property Law Lifestyle Methodology Mises on Policy Music Philosophy Politics Politique Regulation Socialism custom furniture Toronto Austrian Scholars Conference Trade Uncategorized War on Drugs Archives April 2015 March 2015 February 2015 January 2015 December 2014 November 2014 October 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November custom furniture 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2
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