According to IRS and census data, the gap between the incomes of the richest and poorest Americans has been growing since the late 1970's. Timothy Noah of Slate has written a series of articles about this, and posted a slideshow of the data and his interpretations here: http://www.slate.com/id/2266174/slideshow/2266174/fs/0//entry/2266173/
Take a look and consider the political implications of these trends. What could it mean for political participation, polarization, and fiscal policy? How would you advise either the GOP or the Democratic party to respond for the mid-term elections?
Also posted by Timothy Noah at Slate is this chart, which shows what different groups of people BELIEVED to be the distribution of wealth in the US and compares it to the actual. Does this change your thinking about the political implications of the income gap? Why?
So I guess I'll start us up.
ReplyDeleteLooking at all of the stats in the presentation it's pretty crazy how high of a percent the top percentile of income owners make so much compared to the rest of the nation. I think it said that .1% of the population was making 8% of the US's entire income, which is pretty ridiculous. Since there is such a noticeable growth in difference between the wealthy and the rest of America, I would think that the majority of voting citizens would not support tax cuts for the wealthy. However, I don't really know whether the Democrat plans for tax cuts really only targets the wealthy. This is why I think it may be in the GOP's best interest to maybe not act like a big Boehner and settle for the Democrat plan or straight out deny it, but perhaps to recommend a higher salary/maybe use a higher amount of wealth since income may not reflect how well off a family is. Especially families younger families who may be paying of mortgages or sending kids off to college. Since the the GOP has been known to only significantly benefit the richest percentile of income makers (according to presentation), this could show that they are just as invested in the economic well-being of the lower/middle class.
Noah's chart is even more incredible than the presentation. To tell you the truth i didn't really know how to read the estimated and ideal parts, but the actual section showed that the top 20% of America owned over 80% of the country's wealth! That's insane. If we're talking about stimulating the economy by supporting consumers, than it's pretty grim if the bottom 40% isn't even visible on the chart? So yeah, I think the gap in our classes is pretty drastic.
(Disclaimer, I probably read some stuff wrong so... Idk.)
Wow. I certainly knew there was some injustice in America’s wealth distribution, but learning to what extent was shocking. I can only begin to fathom how far reaching the effects of this growing divide are on U.S. politics. I really have no information to back this up, but I’d imagine this greatly increases political participation on both ends of the spectrum. As the poor get poorer, I assume they will be voting primarily on economic issues, and will have greater motivation to support candidates with their interest in mind. At the same time, as people with more money than they can actually spend get increasingly wealthy, I’d also assume that they’d be more politically active to keep government hands off their growing hoards.
ReplyDeleteObviously, this increasing disparity furthers societal class based polarization, but politically I’m not all that sure. Since this began in the 70’s, to my knowledge there haven’t been any coinciding political trends. The balance between Democrats and Republicans over the past few decades has fluctuated over the different election cycles, but overall the two parties have seemingly gone unaffected by the economic divide. Additionally, if political polarization existed along economic lines, whatever party supported the lower classes would have a substantially larger base; the rich are a tiny minority, the party that supports them is not.
Advising any party to adopt fiscal platforms favorable to the growing lower classes would seem beneficial. However, for the better part of the past century, Democrats have been the party of the working class, but haven’t seen any gains as this demographic has increased. On the other hand, Republicans are the party of big business, and while the wealthy haven’t increased in number, they have increased in wealth. Republicans are also notorious for being better funded of the two parties, so even though their message appeals to less people, it brings in more financial support. Both parties’ stances on financial issues seem to be working for them.
I think that it would certainly be advantageous for the Democrats if people had a more accurate perception of the wealth distribution. Unfortunately, this being America, voters don’t respond to factual, data driven political information, so this may not be advantageous for the Democrats to spend recourses on promoting.
I certainly agree with TChan that it's upsetting that so much wealth is held by so few people, and I think Ben is absolutely right about the effect of this divide on people's focus towards economic issues. Polarization is inevitable with such a deep canyon between the rich and poor. The increased division between rich and poor would seem to indicate, on the most basic level, that less wealthy people will vote with stronger Democratic tendencies relating to money; the growing rich will favor more rightist approaches to fiscal policy.
ReplyDeleteHowever, I think there's something to be said for the factors contributing to this divide. The article shows that the divide is largely related to an increase in education; there has been a considerable growth in the percentage of high school graduates during the cited time frame. If I remember correctly, the higher a person's education, the more likely they are to have liberal tendencies. It seems to me that any generalization regarding the party affiliations of the rich is arbitrary; yeah, some rich people vote Republican, but, at the same time, a lot of these wealthier folks have hoity-toity east coast educations, suggesting that they may be voting Democrat. Overall, I think it's hard to infer the partisan consequences of this "Great Division" without understanding the additional social characteristics of the "rich" and "poor."
Though this article was eye-opening, I was unsurprised at the extent of the income gap between the rich and poor. We live in an extremely affluent area, yet if we drive 20 minutes we can see some of the poorest living conditions in the state. It is often easy to forget, living in Needham, that America is a deeply unequal country in terms of income.
ReplyDeleteHowever, I am surprised that this information is not publicized more by the parties for the upcoming midterm elections. I think the graph that showed how incomes typically increase under the terms of Democratic presidents could be used to garner support for Democratic candidates, especially as Obama's popularity is waning. The Bush-era tax cuts are a major economic issue in both state and national races, and the Democratic Party could use this data, in particular the statistics about the top 0.1% of the country, to publicize their agenda.
As the gap between the richest and poorest Americans increases, issues of fiscal policy are going to become all the more important. According to Noah's article, an emphasis on fiscal policy will increase in the coming elections. Wealthy voters are probably going to affiliate themselves even more with Republican candidates who propose universal tax cuts and the like, while poorer voters are going to support the aid and welfare that Democratic candidates stress. Tess makes a good point that these generalizations are indeed generalizations, and that there are a number of other factors to be considered. But I think that on the whole, richer people will be more apt to vote Republican and the poorer will likely vote Democratic.
ReplyDeleteI think that the result of this increasing income gap will be increased party loyalty. The gap further polarizes the views of left and right-wing politicians, which means fewer conservative voters will vote for Democratic candidates, and vice-versa. The gap will also alienate voters who aren't strong liberals or conservatives, resulting in an increase in voters who label themselves as moderate.
Looking at the second chart, I am surprised by how much of our wealth is in the hands of only a few people. After seeing the chart, I'm inclined to think that the growing income gap will benefit the Democrats; because 80% of the nation's population make up only about 15% of America's wealth, there are a lot more poor people in the country than rich. Poor voters generally vote for Democratic candidates, and so, if this trend was followed exactly, 80% of Americans would be fiscal democrats. Obviously there are other factors which would make election races much closer than 80-20, but Democrats look to be benefitted most by the growing income gap.
I found the income gap pretty amazing, especially how the US compares to other countries. One thing that I found interesting though was that it considered the top 1% to be those who make $368,000 or more. That means that there is still a big chunk of people who start at $367,999 going down, which I would also consider to be pretty well off. It is not like there is the top 1% that makes that much or more and then it just drops to everyone else making $15,000 a year.
ReplyDeleteI think that this would definitely make the lower incomes, maybe $50,000 a year and below, want to vote for a political party that is going to try and reduce the top 1%’s share in the economy, but as the posted chart shows, people don’t really know the facts. We can certainly tell by these graphs that the lower income people would outnumber the richest voting if they wanted to, since they only make up 1%. But I think the problem is that politicians today don’t necessarily work by what they think is best by the people, but instead work for who is going to give them the money to get re-elected. In the last slide it said “that the growing power of big business in Washington has been a major contributor to the Great Divergence” and I would agree with this. This gap could be contributing a lot to, what seems like, increasing partisanship. These really wealthy people don’t want to give up any of their wealth at all but at the same time the bottom wants a bigger piece of the pie. This could lead to even more polarization now that it is clear there need to be some major changes to the economy. And while I think that this gap certainly needs to be evened out a little bit, I hope it doesn’t swing to the other extreme where people want everyone’s share to be equal.
I think Sean's point about the widening income gap having an impact on party loyalty is a particularly interesting one. I agree that this data SHOULD have positive implications for Democrats, as the vast majority of people make much less than the top earners, and therefore might be more inclined to vote Democratic. However, it's also important to remember that the demographics that make up the Democratic party are people who are less likely to vote in the first place--think low-income, low-education, minorities, etc. The top percentiles of earners are more likely to both have more political power and knowledge and vote Republican.
ReplyDeleteRachel is totally right about the predictors of voter turnout and additionally, Tess mentioned also the fact that those with higher education and higher income are more likely to vote, thereby decreasing the possibility of drastic change in the distribution of wealth. Another factor to consider is what profession these top income earners are in. In the slide show it said one of the main contributers to the Great Divergence was the steady growth of influence and power the business sector has on government and the decisions made. As we have recently seen in the attempts to reform our twisted financial system, bankers with high income in turn have high influence in government policy. This goes along with the idea of the "power elite" discussed by C. Wright Mills. As the top income earners procure a higher share of the nation's wealth, it is not only their income that grows but also their power, creating a less and less of a possibility of change. That being said, I can definitely see this having a negative effect on minority, low education or low income voters. We have seen that often one of the main reasons that registered voters don't vote is because they strongly believe they CANNOT make a change given the influence of the power elite. I think that politically, as the top income earners hold a great share of the nation's wealth, a correlating trend will be seen with a decrease in number of low income, low education or minority citizens who would be the votes to advocate for a more equal distribution of wealth.
ReplyDeleteI think that Ben brings up an interesting point as far as parties go. He said that the balance between Democrats and Republicans over the past few decades has fluctuated but that overall the two parties have seemingly gone unaffected by the economic divide. Noah said that under the democrats, the bottom 20th income percentile grew while under the republicans, the biggest income gains were for people in the 95th percentile. Since the number of Republican and Democratic presidents since the 70s has been about equal, it is interesting that the income gap has increased so much. If it had been all Democrats, for example, you would think it would be smaller and you would look at these charts and maybe say that this is the work of Republicans, but it is equal work of both parties. I feel like there is more too it than just the fiscal policy of both parties. Therefore, since you cannot just point to one party and say that is the cause, I feel like it is hard to advise a person on which to vote for if they want more equality since it seems like both parties have an equal hand. I have no idea if that made any sense and I feel like that could be totally wrong but it was worth a shot.
ReplyDeleteI was really surprised by the data put together in Noah's presentation. I knew that the wealthiest people made a substantial percentage of the national income, but I didn't know just how much it was. I think that the data that proved to me how crazy this situation is was the data that compared the income share of the top 1% in a number of different countries. The fact that the United States was at 17%, with only Argentina near them, shows that this is a problem that needs to be fixed because the political and social implications are large.
ReplyDeleteI found Noah's slide on the impact of tax cuts on the Great Divergence particularly interesting because of the importance of tax cuts in this upcoming mid term election. The data seemed to show that the tax cuts for the rich definitely played a role in the divergence, but were not a major cause. This brings me to question what the future of the income gap will be like if the Bush tax cuts are renewed. Will this lead to an even larger income gap?
I agree with Laura's comment that the increasing income gap also has an effect in increasing partisanship. The wealthier will be all the more inclined to vote for the Republicans, the ones who are going to protect their large amounts of money. The poorer will want to put Democrats into office, the people that are for helping the poor in ways such as welfare. These overwhelmingly important economic factors will sway votes and partisanship will increase. I also like how Ali related the income gap to the concept of the power elite by C. Wright Mills. As I was reading about the income gap, I too thought about the implications it has on power. Those earning the top 1% of national income will definitely have more power than the other 99%. This, as Ali said, will lower the possibility for change because a small group of people will have such power.
I think the last sentence of Laura’s first comment is crucial: while a gap reduction would be nice, we should avoid a communistic system in which all wealth is distributed equally. Historically, communism can cause repressive, over-powerful governments and attempt to squash individuality. Call me libertarian, anarchist, or Tea Partier, but less government involvement has its advantages, and we should avoid a system that over-taxes the wealthy.
ReplyDeleteOn a completely different note, despite the surprising inequalities, I think the ninth slide has the most shocking information. It states that the greatest cause of the “Great Divergence” is that while the US economy boomed in the 1980s and 1990s, high school graduation rates remained constant. If insufficient education is the true cause of widening gap between rich and poor, then politicians on both sides should focus on improving the education system. This is especially true for Republicans, who avoid excessive taxes on the rich; rather than using excessive taxes to decrease the gap, politicians can push harder for universal education. While the federal government technically does not have the power to make education reform directly, it can pass bills like “No Child Left Behind,” which gives states federal funding if they accept national education standards. If the federal government is able to improve education around the nation, then the lower quintiles will be able to earn more money.
To me, this presentation is evidence that the country can actually reduce partisan polarization. Improving national education would be a win-win, giving the country intellectual benefits while simultaneously decreasing the gap between rich and poor without raising taxes on the wealthy. As the bipartisan support of No Child Left Behind demonstrated, education is an issue in which Democrats and Republicans can converge to form meaningful resolutions.
I think that the chart posted by Timothy Noah is very interesting because it shows the large discrepancy between what people believe and the actual facts. The income gap is clearly a very large problem, seeing that about 85 % of the wealth is owned by the top 20 %. I had no idea that the income gap was that large; I would have more expected something in between the real and imaginary graphs. It clearly means that people aren’t being taught about what the income gap truly is. So the news nor Democrats or Republicans are focusing very much on the income gap; which is surprising, because it would be a good thing for the Democrats to mention and show their success. It is also interesting, and kind of expected, that the Democrats helped the bottom 20 % grow and the Republicans helped the top 20 % grow. The amount of wealth that the top 1 % has is very interesting and could be part of the reason that America is in a recession, if the money was distributed more equally, there might be less poverty. The income gap is also probably greatly increasing polarization. People from the lower quintile would probably not be happy with the amount of money that the upper 1 and .1 % are taking. The increasing rate of separation will probably only increase polarization.
ReplyDeleteIt is also somewhat surprising, somewhat expected, that the U.S. has by far the worst inequality problem. Whatever the French are doing, it is clearly working better than the U.S. So the U.S. politicians should try to alleviate the problems. They should enact some laws or something that would help reverse the trend of the income gap. Also, while Democrats have been in office, the income growth rates have been higher then while Republicans were in Congress; which is something that the Democrats should make clear during the mid-term elections, because it definitely makes the Democrats look a good and the Republicans look bad. It probably should greatly influence fiscal policy and Congress should probably be attempting to lower the inequality and even out the income gap, like what the French are doing. It is surprising that race, gender, or wealthy tax cuts were not major factors to the Great Divergence. So, education was the primary factor, meaning that more people are graduating from high school and college. More graduates often results in more political participation. It would also probably benefit the GOP to show that they have helped the wealthy, because the GOP appeals to the rich people, while the Democrats appeal to the lower income classes.
I was not really surprised that the income gap is so large, however I was surprised by how delusional people were about it. Like Rachel said, living here in Needham, where the majority of residents are in a similar class, the gap is not as clear, but driving from places like chestnut hill into more urban areas, the gap becomes more obvious. Especially now I am surprised that people are not more aware of the gap when headlines often show the rising poverty rate or a story about a middle class family who is now unable to make ends meet, along side a story about a CEO who gets a bonus in addition to his/her 1 million plus salary.
ReplyDeleteI think the growing income gap will have a profound influence on politics and party loyalty. As many people have said I agree that as more people move down into the lower income classes the Democratic Party will benefit. On the other hand, these poorer people have less money to contribute to the campaign efforts, and as has been seen in the latest campaigns fundraising and the amount of money a campaign has at its disposal is crucial. If the republicans continue to carry the wealthy vote, and the wealthy grow wealthier, than they have more money to give to the Republican Party, translating into more campaign ads and a stronger republican campaign.
Becca brings up a really great point about campaign contributions, something we have been talking about recently in class. Wealthy Republican donators like the Koch brothers clearly are having a huge impact and it all starts with their influence due to concentrated wealth. The Koch brothers are really the best example of the income gap having an unequal effect on party politics. They are both long time libertarians and are currently "waging war" against Obama with donations and this has been one of the biggest seperating factor between Republicans and Democrats in the 2010 mid term elections. Becca also mentioned ads which always have a huge impact. I think ads will play a crucial role in these particular elections because of the amount of independents or Democrats gone independent. In these midterm elections the income gap favors the Republican party and their large contributions will most definitely start being funneled into ads to attract independents thereby effecting the outcome of the campaigns. Because of the fact that the Great Divergence is becoming more concentrated and relevant, would-be Democrat voters (minority, low income, low education) will not be able to contribute anywhere near the amount the Koch brothers are able to, causing an additional gap in politics as well as income.
ReplyDeleteI think Laura is completely correct about not wanting people to vie for "extreme" economic equality, and Ethan makes a great point about how that's pretty darn Communist. I want to add, too, that not all high-income people inherit their fortunes without lifting a finger. Many wealthy people work incredibly hard to provide for their families, and their successes aren't "evils" as some disgruntled tax-advocates seem to think. I'm not saying AT ALL that lower class people are lazy or should work harder or anything like that, please don't get me wrong; I just think, again, it isn't fair to generalize all "rich" people as snobs who don't want to help the poor.
ReplyDeleteAs far as the impact of the income gap on the elections, I agree with Ali that as far as advertisements and increased partisan bias, more money certainly equals more power, which, according to our indicators, would favor Republicans. On the same token, though, this is a "one person, one vote" system, so this "Great Divide" can also help gain Democratic support in vast numbers. Sure, money can buy influence, but it cannot ultimately buy more votes, and, while flashy ads might sway some moderates, the people with the lowest incomes have current situations that will probably influence their political allegiance more than a few expensive commercials.
And, just as a footnote, while it is true that, on the whole, Needham is a very well-off community, I would like to respectfully point out that it isn't necessary to "drive twenty minutes" to find people who are less wealthy; let's not forget that there are "projects" in Needham.
I wasn't at all surprised by the income gap. Hearing about unemployment and the troubled state of the economy right now made me expect it a little bit, even if the gap and the economy right now aren't directly connected. If either party were to use this information, it could have a huge effect on the elections. Ben (I think) was saying earlier how the American public doesn't tend to pay attention to factual information and, while that could hurt the parties, I also think it could help them, as awful as that may sound. As the slideshow pointed out, the income gap decreased when there was a Democratic president and increased with a Republican president. Noah then went onto say that a decreasing income gap also seemed to suggest that people in general did better. If Democrats use this information without boring people and confusing them with statistics and graphs, it could really help them. On the flip side, if Republicans are trying to appeal to the wealthy (as they seem to be doing with the Bush tax cuts) the information here could also help them in a big way.
ReplyDeleteWhile I agree that the gaps between the rich and poor that are shown in these graphs are terrible, especially the fact that 8% of the United States' wealth comes from .1% of our population, I was really not that surprised by how big the gaps were. I guess that I’ve always had a sense that the gap was that big, just from what’s reported in the news and such.
ReplyDeleteI think that for issues like tax cuts on the wealthy should be put into perspective with how many of the “wealthy” actually take up the United States population. The facts that they make up such a small percentage of the population kind of says that maybe politicians shouldn’t be focusing their efforts on them and instead focus more on tax cuts for lower-come citizens.
I agree with Tema that the democrats could really use this information for their advantage if they use it correctly. Showing that the gap between the rich and the poor lessened with Democrats in power rather than Republicans could show to be very helpful. The democrats do not have that much energy behind them right now, with the Tea Party Movement, and this bit of information could swing some of the energy with the elections to theirs.
ReplyDeleteI also agree with Laura and with Tess that there is a fine line between lessening the gap between rich and poor and getting rid of capitalism. If we even out incomes too much, suddenly there is far less motivation to do well, or invest in stocks, etc. However, as the slideshow pointed out, evening incomes slightly can make everybody better off.
ReplyDelete@Brendan
ReplyDeleteI think you make a great point in your first paragraph. The fact that people perceive the income gap to be less severe than it is demonstrates a lack of awareness (ignorance) of the nation’s economic situation. It was also interesting that Bush voters, Republicans, tended to believe the top 20% had less of a share than what Kerry voters believed. Since being wealthy is generally an indicator of voting Republican, these wealthy voters see themselves as having a share almost a third of what they actually have (estimated = 30%; actual = 85%). This could indicate a defense for why the Republicans oppose higher taxes on the rich: they believe that the rich do not earn much more than the rest of the nation anyway.
However, I have to disagree with your second paragraph in support of the French economic system. The French economy has major issues. Right now, there are protests over raising the retirement age to 62 from its current status of 60. A nation with that low of a retirement age can become seriously inefficient, but many Frenchies are now spoiled by the generosity of the government doling out enormous sums of money in social spending. With all of the social spending, Frenchies are heavily taxed, and the French government becomes increasingly socialistic. To some, increased government control can be positive, but to avoid the tyranny of communism, we should avoid big government.
I agree with Laura. I also think that it is important for the income gap to be more evened out, but it also should not be entirely equal. If everyone's incomes were equal then America would be more of a large communist commune then the capitalist country that we are. If the incomes were more equal, people might lose the motivation and drive to earn the extra dollar if they knew it was going to be taken away in order to create equal incomes for all. Politicians would also be hard pressed to support this, as they would quickly lose favor with the people that were losing money solely in order to even out the income gap.
ReplyDeleteI remember in 7th grade history class we did an activity to illustrate how wealth in America is divided up. My teacher gave one person control of 10 desks and made 10 other people share a single desk. This stuck with me because I was shocked at how large the divide was, and even after seeing these slides I still can't believe it. The increasing gap will absolutely have an impact on politics. I think the most important impact it will have is not the actual gap itself but what people perceive it to be. If Republican voters don't see that the top percentile is earning a significant amount more than they believe, they'll continue to support tax cuts for the rich. This could cause a lot of animosity between those who are int he top percentiles, earning much more than they think, and the lower percentiles. This could cause more extreme polarization of parties, as richer people tend to vote Republican and poorer people tend to vote Democrat. I agree that another major issue with this is the campaigning, because poorer people (more likely to vote Democrat) don't have as much money to donate to the campaign, so what happens is the Republican party gets a disproportionate amount of publicity and campaigning. If the Republicans manage to get more publicity and support, their policies (tax cuts for the rich) will probably be supported as well and this will just widen the gap more.
ReplyDelete@Rachel
ReplyDeleteI actually don't think either party would want to focus on the widening income gap. In fact, Noah's findings may be more beneficial for the Republican Party. The Democrats have taken a lot of heat for the state of the economy (which, in my opinion, is just the result from eight years under Bush, but I digress...) and risk adding more fuel to the fire by emphasizing the gap between America's rich and poor. For the Democrats to keep their majority, they need to focus on what changes were made that positively effected the American people rather than attracting attention to yet another economical issue.
I looked at the data on the distribution of wealth from the perspective of my candidate, Tom Perriello, Democrat, running for re-election for a seat in House representing Virginia. I would recommend that Tom initiate legislation to increase the minimum wage. According to G. William Domhoff the minimum wage has decreased 9.3 % since 1990. As a result worker who make minimum wage paycheck purchase less than they did in the early 90’s. If the government and business do not adjust wages to match increase in inflation then they risk the gap continuing to grow between the wealthy and poor. When this data was compared to that of CEO’s of S&P 500 companies. The CEO’s pay had increase by almost 300% during this same time period. Domhoff calculated that at the end of the year, the average CEO is making $20 Million a year and the average production worker (who makes more than minimum wage) is making $36 Thousand a year. Looking at the relationship between the CEO’s salary and the worker’s salary clearly shows the need to increase the pay of the average worker.
ReplyDeletesource-http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
I really wasn't surprised at the growing divide between America's richest and the poorest. When the economy is down, it affects everyone, but it always seems to take the biggest hit with those who don't make as much for a household income. Many who aren't making a large amount of money, have to really sacrifice a lot when thinking about paying for mortgages, gas, taxes, cars, etc. And for the very poor, the welfare which is given by the government is not very much money. Things have only gotten worse for those with a low income during our recent economic struggles with the rising unemployment. And while unemployment increases, so doesn't the price of necessities such as gas. These factors only contribute to the financial bindings of the middle class and poor, while they don't mean nearly as much to those making millions of dollars.
ReplyDeleteAs for government, one way to decrease deficit would be for 8% of the money to NOT go to the top percentile. I feel like Democrats, as well as Republicans could do well to use this information to their benefit. The obvious is for Democrats to support the repeal of the Bush tax cuts by showing the divide and how much the top 1% is making such a big amount of money. The Republicans could also say that the Bush tax cuts are useful because the rich are saving/ making more than a sufficient amount of money.
I actually really agree with Sean's comment. I too have been noticing that Democrats have been getting a lot of crap about the economy and rising taxes, etc. Every time I see a Charles Baker commercial, they talk about how Deval Patrick only raised taxes instead of lowered them, but not how raising those taxes was necessary. I agree that since this is the problem, it would be wise not to spend too much attention to it, and just comment on the positive changes for America.
ReplyDeleteI think that also it would be beneficial to propose some other ways to relieve the middle class and poor such as creating jobs, and using energy efficiently, instead of emphasizing taxes a lot since it is such a controversial topic among Republicans and Democrats.
I think that the graph is very interesting because it indicates that all of the income groups have essentially the same perception about the wealth distribution, and that perception is not even close to the reality; the upper 20% control much more of the nation’s wealth in comparison to the rest of the population than any of the income groups thought. I think that the fact that the general public’s perception is so far off could have huge political implications. All a candidate who strongly believes in narrowing the wealth distribution gap has to do is show this graph to anyone who does not fall into the top 20%. Furthermore, the graphs from the slideshow show that even just the top 1% control a hugely disproportionate amount of the nation’s wealth. These graphs will work to the advantage of said candidates because it will rile/anger voters who already feel that the wealth distribution is unfair.
ReplyDeleteThere are two reactions that voters could have to these charts: the voters that do not belong to the top 20% could feel that the top 20% is too powerful and that their voice will not be heard and their vote does not matter, or those same voters could realize that though the upper 20% of the population controls more than 75% of the nation’s wealth, the other 80% of voters have numbers on their side and that their voice really could matter—they make up much more of the population, and all of their votes combined are very powerful.
Given the information presented by the graphs, I would advise the Democratic party, which in the past has successfully made efforts to lessen the wealth distribution gap to advertise this success (especially the trend shown by the last graph in the slideshow) and to mobilize the voters who make up the “other 80%” which includes minority voting blocs such as the African American and Hispanic voters. Additionally, it will probably help the Democrats that they are opposing the continuation of the Bush tax cuts for the wealthiest portion of our nation.
On the other hand, I would advise the GOP to go after this “other 80%” by presenting policy opinions that stress the importance of education, creating jobs, and other ways that help people to improve their own situations without as much government involvement/regulation.
Overall, I think that this data will hurt the GOP, especially given the tough economic times that we are facing, because it presents the Democrats as more helpful in lessening the wealth distribution gap, and the GOP as contributing to it.
I agree with Ethan’s comment about avoiding “a communistic system in which all wealth is distributed equally.” While it is definitely alarming that the wealth distribution gap between the top 20% and the bottom 80% is so large, I do not think that the answer is wealth redistribution whether it be through extra taxes for the rich, or significantly increasing social welfare programs for the not-so-rich. Rather, I think a more appropriate approach would be to focus on ways to create more opportunities for people to improve their own socio-economic situations. This would include improving the education system, and building industry to create more jobs. As the slides indicated, tax cuts for the rich only somewhat contribute to the gap, whereas factors such as the education/achievement gap are far more influential. The focus should be much more on investing in programs that help middle and low income families to actually improve their own situations, and much less on subsidies funded by the high-income population. As long as the high-income population is making their money legally (which is often questionable---that’s another debate), I don’t think that it is fair to attack them, even if it is with the intention of reducing the wealth distribution gap.
ReplyDeleteI guess that I have always known that there was a significantly large gap in wealth between the poor and rich in this country, but I have to say, I was somewhat surprised by the size and vastness of this gap. Like Rachel or Ali said, I think my ignorance towards the size of this gap is due to the fact that I do live in Needham and in this town everyone is kinda around the same. Anyway, I feel like the distribution of wealth effects political participation in many ways. I guess people with lower income would be driven to vote on economic issues which will help them, however, this is in an idea world and typically those with lower income do not vote as often as those with higher income. So the people who are in the top percential will continue to not only vote more consistently, but will more likely be involved directly in politics because they have to money to not only get the right education for the job, but to support and campaign themselves. So because the rich can afford to be more involeved, they are, and the wealthy want to stay wealthy, so changes which can help disperse the wealth are less likely to be made. So the wealthy make decisions in politics and they become wealthier, and I guess the poor get poorer. This is a very pessimistic thought I am sorry. Anyway, I thought that the slid which talked about the income growth rates under both parties was the most interesting slide. I feel like democrats should use this to there advantage in appealing to the mass of people who could benefit from this.
ReplyDeleteI completely agree with Rebecca’s last post. I do support taxing the wealthy however I agree that we should create more opportunities for people to help themselves and like Rebecca’s said improving education and creating jobs is how this should be done. And while I agree that the wealthy should not be penalized for being wealthy I feel that it is necessary to get funding to fund things to help the poor help themselves and taxing is a vital way to get this funding. And looking at the distribution of wealth it is clear that taxing the wealthy will hurt less then taxing the poorer. In order to create ways to help the lower income people help themselves, we need to tax the wealthy in order to do so, so that programs can be created and developed.
I find it very interesting that under Democratic presidents, the groups showed huge differences than from under Republican presidents, with their income growth rate at more than a 1.5% increase for the 60th percentile. I don't find it surprising that the median income ratio for whites/hispanics went down by five cents over the last thirty-five years. This is most likely attributed to the fact that there have been more and more unskilled workers arriving in the U.S., decreasing the median for median income. I also don't find it surprising at all that the median wage ratio for men and women has gone up 17 cents in the last 30 years. More and more women are getting better, higher paying jobs. As morea and more people go into the lower income class, the Democratic party will significantly benefit, because the poor population usually votes Democrat. The Democratic party should therefore receive more votes than the Republican party, seeing as the lower income population is larger than the higher income population that would regularly support Republicans. Since the Republicans receive support from such an wealthy class, they should be running stronger campaigns. However, when it is election day, votes are the only thing that count, and the Democrats should receive more votes from the lower income community -- if they turnout to vote.
ReplyDeleteNoah's graph only supports the fact that our economy is run by big businesses, which are owned by people in the top 20th percentile. The top 20th percentile owns over 80% of our country's wealth, which doesn't surprise me at all.
I agree with Rachel in that the Democratic party should be publicizing this information. The fact that people's incomes have improved significantly under Democrats should be a major plus for voters to go Democrat. Especially now, coming out of an economic recession and with millions of people struggling for money, this information should be accounted for when people vote in the best interest of their income.
In response to Rebecca's 2nd post:
ReplyDeleteI agree that drastic wealth distribution would be unhealthy for America, but on a basic moral level I think it is simply fair for people with higher means to pay higher taxes. However, to have an opinion on what extent these taxes should be higher, I'd need this question answered: Laura mentioned earlier that the rich are getting a bigger piece of the pie, but does this mean that there is less pie for everybody else, or that there is just more pie to be had? If the derivative pushing idiots who made billions sending the economy to hell got their money, no matter how indirectly, from the low and middle class, then they should absolutely be taxed up to their eyeballs. But if somehow they discovered some untapped wealth, then they should be taxed moderately higher just because they can afford it, and not for any redistribution purposes. I realize this is an extreme example, but l I think it is essential to understand whether or not this top one percent is seeing their wealth increase exponentially at the expense of the rest of the country.
Also, after thinking more about this since my last post, I've come to a better understanding about why this gap is tolerated. The American dream always has been, and remains an integral part of this country's culture. Even though the vast majority of people aren't in the top one percent, I think that all of us, no matter how subconsciously, believe that one day we can get there. As a result, many don't see these increases as an injustice, but as their potential.
Colin and Rachel had an interesting thought, to have the Democratic Party publish the data. The expectation is that the 80% of the people will be motivated to change the power structure with their vote. Before the Democratic Party publishes this information however, they may want to consider the impact. Voters would be shocked to learn that neither the Democrats nor the Republicans have been able to significantly change the allocation of wealth in the past eighty years. If this data was shared broadly with the population, it could result in opening the door for third party candidate. The alternative candidate could run on a platform of creating a more equitable distribution of wealth.
ReplyDeleteI agree with Colin and Rachel in saying the the democrats could benefit from publicizing some of the data shown in Noah' slide show. Esecially the content from the final slide which illistrated that incomes at all levels increased more when the democrats held office. I think this would appeal to voters of all classes because even though they increased more for the bottom 20% than the top 20% the increase at all levels was larger than the increases when a republican was president.
ReplyDeleteBelow is Elicica's comment that I moved from elsewhere on the blog:
ReplyDeleteThe implications of the graph "Income Share," indicate that there is an obvious regression in the equality of income. I think it is due to Republicans and the increase of those political figures in our government. Those who are wealthy typically vote and are themselves Republican, which shows a of the Republican party. I think the public opinion has become more and more divided, popular polarization. The variety of jobs in the economy that require a degree, will obviously offer more $ than a job that doesn't not. Therefore, those who are wealthy want to preserve their wealth and those who are not, want to increase their wealth, which divides public opinion greatly. Leading into fiscal policy, the wealthy want tax cuts to be the same for each income class, yet the lower and middle class want higher tax cuts for those who have sufficient income. This will increase electorate participation because every income class wants equal representation. If there are more wealthy representatives than of middle and lower class representatives, the outcome is simple; the wealthy will be represented rather than the other income classes. How do GOP and Democrats respond? I'm not sure. I think Democrats should advocate more for the lower and middle class because they represent the make up the majority of the American population. As for Republicans, I'm not a fan so they're on their own with that one.
Elicica M
I personally found the Slate presentation extremely interesting, but I found Noah's statistics to be even more intriguing and representative of America's opinions of economics. The fact that Americans believe that the United States has greater economic equality than it truly has may be due to two main reasons- American reliance and loyalty to our laissez-faire-based economic system, and, as Ben mentioned earlier, an American loyalty to the idea of an obtainable upper class.
ReplyDeleteAccording to Noah's chart, Americans who made less than $50,000-the lowest-income group in the chart- showed the greatest faith in economic equality-they believed that a lesser portion of wealth was given to the wealthy than the other groups. Additionally, this number was substantially less than the true amount of money and financial power given obtained by the highest-income group. I believe that this discrepancy can be attributed to the circumstances of those in the lower class-since most extremely impoverished people do not have the chance to personally know people from high-income areas or experience their wealth, they grow up assuming that the quality of life for most Americans must be poorer than it actually is. However, higher-income voters-who, in addition to having higher-income communities, also generally have a more substantial education and greater civic knowledge than lower-income citizens, recognize that there is a more uneven distribution of wealth that deposits most money into the upper class-money and power which these high wage earners encounter routinely.
Additionally, along with social surroundings, I agree that another factor also influences peoples' opinions about wealth distribution-the presence and possibility of achieving the American Dream. As Ben said in an earlier post, people may be more likely to tolerate economic inequality because of their own desire to achieve the wealth of the highest earners. however, these same Americans who wish to achieve the American Dream do not want to give up their hope by succumbing to the idea of an immovable upper class. This can be seen in Noah's statistics-the lower classes do not believe as much as the other income groups in the economic superpower of the upper class. Instead, they believe in a more equal economic distribution that, while still giving the chance of the American dream, also gives the appearance of social mobility-the chance to move up the economic ladder.
I agree with Ethan, that it seems the one most effective way we could attempt to close the gap is by increasing education/educational opportunities. By making education more accessible, it would create more opportunities for those in the lower socioeconomic classes to raise their status which would help close the gap. Political parties should aim to close the gap by giving (more opportunities for education) rather than taking away (less taxes/more taxes/whatever their agenda is). Unlike health care policies or abortion, education is a valence issue most people agree on- the more education, the better. At least, the general population believes it's necessary. So instead of trying to reconfigure the nation's wealth through taxes and fiscal policies, political parties should focus on trying to improve the general quality of everyone's lives through education.
ReplyDeleteI also agree with Ben's point about why we tolerate the gap... good thinking, Ben :) Though some may complain about those who have a higher socioeconomic status than them, if they don't genuinely see it as a problem but rather a goal, its unlikely they'll take action to amend it.
The gap between the poor and the rich has always been there. If it's becoming larger and becoming a problem then the government should do something about it. Obama already has a lot on his plate with the economy being in the way it is but I think he needs to do something about this growing gap. If it continues to grow and the government doesn't do something about it I feel as though it could become a huge problem. Not just a problem for the people who are poor but it would be a problem for the people with a middle income. Just like the middle child in a family is usually ignored I feel as though the middle class would also be ignored
ReplyDeleteI agree with Elicica M when she says that Republicans are on their own but I also think that we should care about what this means for the Republican party. The views of the country are shifting now the Republican Party is starting to gain some momentum and they might become the majority in many areas of the government. That could mean problems for the Democrats. If the gap keeps growing who's to say that the majority of people wont be rich. People are just assuming that if the gap gets bigger the majority of people will be poor. If it turns out that the majority of people are rich then Republicans could gain a lot more power than they have now. Even though I believe that Republicans are on their own I also believe that sooner or later they wont be and I'm going to have to start caring about what they're doing.
ReplyDeleteBelow are Lindsay's comments:
ReplyDeletePost 1:
Well, I agree with the first statement that Rachel made. I am not surprised by the gap at all and I guess part of that has to do with the fact that I witness the best of both worlds. Going to school in Needham, I have seen the kind of money/wealth that A LOT of people have, but living in Boston, I have seen the poorest of the poor. Even though I don't live in the richest neighborhood, I sometimes forget myself.
Things are only getting worse in this economic state and people need help. Honestly, the people apart of the top 1% really need to sit back and be quiet because there are so many people who don't have to pennies to rub together.
Post 2:
I completely agree with Taylor and Rebecca when they say the wealthy should be taxed. The effect on them would be minimal compared to the effect that it would have on the poor. I feel like the government needs to make more opportunities for the poor. Create jobs and improve the welfare system.
I also agree that education is the key factor in improving income. The two almost go hand-in-hand. However, the cost of education is RIDICULOUS!
-Lindsay W.
I think the most shocking part of this article was that in America, which is supposedly so 'equal,' there is one of the biggest income gaps in the world. Though I'm sure the bottom 20% here is a lot better off than the bottom 20% in most places, they are still a group in need of economic help, and recently a lot of the money that should have gone to the bottom went straight to the top. This isn't really fair, but it also isn't any individual's fault. What I mean by this is that our society has grown to value certain jobs more than others, and naturally, these jobs have increasingly high salaries (regardless of the fact that a lawyer may or may not be more important than a janitor, for instance). As many others have said previously, the key to decreasing this income gap is education. Though education has increased over the past 30 or so years, I think there is an inherent flaw in our society in that there are large amounts of important jobs that simply are reserved for those with less education. If every person goes to college, who will want to work in McDonalds? Therefore, though I think education is important, there are other factors that are needed if we want to make the income gap smaller. I think raising salaries for jobs that require less education would be an easy fix, but obviously that's impossible to practically implement. Therefore I think government plays a huge role. Obviously based on the charts, it seems like Democrats not only shorten the income gap, but also expand income more for everyone. Republicans, on the other hand, have seemed to widen the gap, while also failing to raise everyone's income as much. I think people tend to vote for Republicans despite this because of the American Dream idea, that people should be allowed to succeed on their own. I think that this is kind of a warped vision, however, because clearly the American Dream has proven not to work out, and the fact that the lowest income population thinks there is the most income equality only perpetuates this. Maybe some people are able to make nothing out of something, but most aren't, which is why the income gap is so problematic. Democrats should stress that they are not taking any money away from the rich, that there is no distribution involved. They should point out that the only thing they are proposing is that the rich does not grow by a scale that is out of proportion to that of other income groups. This is because, in general terms, the rich are the people who more often than not get richer, just because the position they are in allows them to. It is much easier for someone who makes $1 million to make a million more than for someone with no money to make $1 million. This trend continues when Republicans have been in power, but many people go with them because of the possibility of not being limited by taxes (if you make enough money for the highest tax bracket to matter). In my mind it is an (exaggerated) choice for the poor between a lottery ticket where you could get rich, but probably wont, or someone offering you a smaller amount of money up front. In general terms, the latter is always the better choice, which is why we should be fighting to shorten the income gap. (this kind of adresses a lot of comments along the way)
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