The US economy is doing well. President Biden wants to know why so many Americans are still feeling bad
The US economy is doing well. President Biden wants to know why so many Americans are still feeling bad
By many metrics, the US economy is humming along. The jobs market is robust; consumers are spending again; and inflation has eased to a three-year low.
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I’d be interested to see a source on if income inequality is decreasing because I haven’t seen any articles about that tbh. In fact, since 2020 when I last looked at graphs on it, it’s seemed like the gap is just getting wider and wider every year.
And if I was told things would get harder for me and other people in my bracket to make it easier for people making less than me, I’d be fine with it, but I’m not seeing an indication that that is what’s happening. But to be honest, so long as I’m seeing record profits for corporations and billionaires continuing to breathe, I’ll continue to think income inequality is continuing to get worse regardless of a study that states the contrary.
Reduction in income inequality started under Biden, after 2020
But there’s some pretty good news that doesn’t readily appear in the steady stream of government data released each week. After decades in which the gap between the richest and poorest Americans grew by leaps and bounds, the strange rebound from the pandemic has led to something different: a slow reduction in inequality across the economy. Incomes of people in the bottom half of income distribution grew by 4.5% in the last calendar year, much faster than the 1.2% average income growth of all Americans
Looking at the Realtime Inequality source, I think the picture is a bit less rosy than the article gives it, if I’m reading the graphs correctly. It looks like the bottom 50% were absolutely financially destroyed during 2020 (as was everyone else) and measures have been taken to place them relatively close to where they were before the pandemic. But the upper class not only didn’t fall as hard as the bottom 50%, but they recovered to a higher level than they were previous.
To me, this seems like “the income inequality train is slowing down” rather than “the income inequality train is going in reverse”. That being said, I’m a dummy when it comes to economics, so I might not know how to read this correctly.
Note that the y-axis is income growth. Staying at zero means "no change". So it's more accurate to say that before late 2021 the bottom 90% stagnated (or slightly lost income) while the upper 10% grew, seemingly oblivious to hardship.
After late 2021, the income of the bottom 50% grew faster than the top 50% (or top 10%). That is exactly what is meant by "inequality is finally decreasing", because the only way for two extremes to get closer together is for the bottom extreme to grow faster than the top extreme.
Faster growth among the highest incomes is a longstanding feature in our economy, and this differential growth means that income inequality has almost always been increasing. Faster growth among the lowest incomes, ie any period of decreasing inequality, is practically unheard of in recent American history.
I do think it’s possible to make statistics claim anything you want if you categorize the positions you’re comparing in a way that supports what you want to claim. All I know is people generally don’t feel like they’re doing better economically whether it’s the honest fact or not. And if I’m having issues with groceries, those who make less than me must be struggling more.
If feelings are more important than statistics, then government should make less effort to reduce inequality and more effort to get people to feel good about the status quo. In other words, do what the GOP does when they are in power.
The thing is statistics can say anything so they’re nearly meaningless if someone has a motive for presenting the statistics in a particular way. But so long as we’re making comparisons, going to bat for the party in power and refusing to listen to valid complaints from people is also pretty similar to the GOP and Republican voters.
Considering the article I posted contradicts yours, I find it hard to believe either 100%. I trust the people who are having trouble buying medicine, rent, or groceries over some article telling me some carefully crafted statistic on why things really are good and we should just stop complaining or protesting about anything and everything. Essentially, it’s just an appeal to status quo to present specific statistics in a way that makes things seem rosy to contradict those who think otherwise.
Considering the article I posted contradicts yours
The article you posted does not contradict mine. Yours says that inequality is higher in 2022 than in 2019. The one I posted said inequality began to decrease in late 2021. Both can be true. Inequality may finally be decreasing after decades of relentless increase, yet remain higher than it was in 2019.
statistics can say anything so they’re nearly meaningless
People can certainly misinterpret statistics. If you think that's the case, then you should examine the methods and data and propose a better interpretation.
Dismissing data that do not match personal experience is how you end up with science deniers (e.g. "It's 20 below in Chicago, so much for global warming!", "Nobody I know has died of covid so I don't need a vaccine!")
we should just stop complaining
Nobody said you should stop complaining. But complaining without a solution in mind is pointless. And data suggest that Biden has made more progress towards a solution than previous presidents, or his opponent.
When your link says when the bottom 50% has increased faster than every other group except the top 1%, the fact still stands that income inequality is getting worse. And a misleading title on top of that. All of us in the middle are just stagnating and you’re seeing that as a win because the poorest and most vulnerable were given crumbs? Also the article mentions that the gains of the lower class might not last long because that gain is due to covid stimulus programs.
Corporate profits have risen 25%-30% and the value of the dollar has lost 18% of its value since 2020. Something is wrong.
every other group except the top 1%, the fact still stands that income inequality is getting worse
Not necessarily. Inequality is not just about the top 1%, it reflects the entire distribution of income. For example, suppose that the bottom 50% and the top 10% were stagnant, but the 51st to 90th percentiles all experienced rapid growth. The range of incomes would be the same, but inequality would nevertheless have increased.
Mathematically, inequality is expressed using the Gini coefficient. It is quite possible for inequality to decrease even if the top 1% grows faster than the bottom 50%.
the poorest and most vulnerable were given crumbs
Income growth of 6% is not crumbs.
the gains of the lower class might not last long
True, there are no guarantees because we don't know what the future will bring. If Trump wins the election, I suspect the gains won't last long at all.
Yes yes, many different methods to try to convince people that the Matthew effect isn’t real and the top 1% isn’t gaining wealth at an ungodly rate to the detriment of the planet and everyone living on it. Ignoring the richest people when comparing the gap between the richest to the poorest income growth is such a dishonest way of making statistics work.
Income growth of 6% when your income is near nothing is crumbs. Surviving on less than $38 a day and getting a bump of a couple dollars might be greatly needed to those people, but it’s really absolutely nothing compared to the rate of wealth accumulated by the rich in this country. How much material change to one’s life will a couple dollars make? The difference between starving on the street or starving on someone’s couch? All while the richest are suddenly making enough money to buy entire countries, let alone their impact on governing policies to keep those who are poor poor enough to always be gasping for air, too tired to fight back.
So long as capitalism is functioning as intended, every president will feel worse and worse unless you’re comfortable. Comfortable people are willing to believe any article they read on the internet to not feel guilty that the system they feel comfortable in exploits their fellow countrymen as well as those in the global south. I’m not playing political team sports and I have no incentive to try to convince people “my guy” really isn’t that bad. I have no reason to parrot other people who have a material incentive on writing articles that are trying to convince people who are hurting that they aren’t really hurting. If you want Biden to win, you’re better off trying to convince him to pull an FDR with a New Deal than trying to convince me to vote for someone who is perpetuating genocide.
[edit] forgive me for not giving any sort of credit to the Gini method, created by someone who defended fascism and the nazis. (I’ll ignore his eugenics stance since it seems everyone around then was big into eugenics). From Robert H Wade, professor of economy: “it has long been accepted that the Gini coefficient is the workhorse measure of inequality. But it is not generally recognized that the coefficient is normally defined in a way which biases the measure in a downward direction, making inequality seem less large than another version of the coefficient would suggest. By this alternative measure inequality is much higher than is generally thought. The standard measure is misleading us into thinking that economic growth is more “inclusive’ than it is.”
It seems to me like the Gini index is just as bad as the GDP for being an oversimplification of something complex (be that income inequality or economic health). Hey, but it’s a single number and that number is easy to understand at the detriment of its accuracy.