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Wednesday, December 8, 2021
World inequality — Michael Roberts
Numbers.
Michael Roberts Blog — blogging from a marxist economist World inequality Michael Roberts
While it's true that both wealth inequality and income inequality have increased, consumption inequality has decreased. A quote from a 2012 article:
What about the standard of living over those years? The Department of Energy regularly surveys Americans and asks them to report on the characteristics of their homes, including the types of devices and appliances they have. If the standard left-wing narrative is correct, then a typical poor American would trade his current circumstances for those of the past in a heartbeat.
Yet the access of low-income Americans—those earning less than $20,000 in real 2009 dollars—to devices that are part of the "good life" has increased. The percentage of low-income households with a computer rose to 47.7% from 19.8% in 2001. The percentage of low-income homes with six or more rooms (excluding bathrooms) rose to 30% from 21.9% over the same period.
Appliances? The percentage of low-income homes with air-conditioning equipment rose to 83.5% from 65.8%, with dishwashers to 30.8% from 17.6%, with a washing machine to 62.4% from 57.2%, and with a clothes dryer to 56.5% from 44.9%.
The percentage of low-income households with microwave ovens grew to 92.4% from 74.9% between 2001 and 2009. Fully 75.5% of low-income Americans now have a cell phone, and over a quarter of those have access to the Internet through their phones.
Another quote to that effect, while dated, from Wikpedia:
Conservative researchers have argued that income inequality is not significant because consumption, rather than income should be the measure of inequality, and inequality of consumption is less extreme than inequality of income in the US. According to Johnson, Smeeding, and Tory, consumption inequality was actually lower in 2001 than it was in 1986. The debate is summarized in "The Hidden Prosperity of the Poor" by journalist Thomas B. Edsall.
Consumption inequality is sometimes referred to as the "lifestyle gap".
“Yet the access of low-income Americans—those earning less than $20,000 in real 2009 dollars—to devices that are part of the "good life" has increased.”
Classic cherry-picking leaving out the important stuff.
Consumption is done through credit. If you lose your job you have nothing. They own nothing.
It’s the same situation as during 19th century where the owner of the factory owned the store, the house you lived in and so on and you were forced to work for him, buy from him as he provided the credit, credit enough to get get by, but no more than that.
And of course the cherry picking argument lover never ever brings up the economic stress one lives under when everything you have is bought on credit. It’s the classic “look there instead!” which Ahmed Fares do with copy and paste.
The discussion is about inequality, not financial security, which is a different issue.
And no, these people are not consuming on credit. While people use credit to smooth consumption over the short term, the data which I showed shows decreasing consumption inequality over decades. If these people were borrowing against the equity in their houses, they'd be underwater by now.
People of course dispute those conclusions, like the the Thomas Edsall article mentioned, citing Jared Bernstein and others. Sure there are plenty of poor people whose lives are not hellish. It's an ill wind that blows no good. But anybody who has lived through the past few decades knows that the "conservatives" are peddling line of bullshit. 40-50 years ago the US was rather more equal in every way.
While it's true that both wealth inequality and income inequality have increased, consumption inequality has decreased. A quote from a 2012 article:
ReplyDeleteWhat about the standard of living over those years? The Department of Energy regularly surveys Americans and asks them to report on the characteristics of their homes, including the types of devices and appliances they have. If the standard left-wing narrative is correct, then a typical poor American would trade his current circumstances for those of the past in a heartbeat.
Yet the access of low-income Americans—those earning less than $20,000 in real 2009 dollars—to devices that are part of the "good life" has increased. The percentage of low-income households with a computer rose to 47.7% from 19.8% in 2001. The percentage of low-income homes with six or more rooms (excluding bathrooms) rose to 30% from 21.9% over the same period.
Appliances? The percentage of low-income homes with air-conditioning equipment rose to 83.5% from 65.8%, with dishwashers to 30.8% from 17.6%, with a washing machine to 62.4% from 57.2%, and with a clothes dryer to 56.5% from 44.9%.
The percentage of low-income households with microwave ovens grew to 92.4% from 74.9% between 2001 and 2009. Fully 75.5% of low-income Americans now have a cell phone, and over a quarter of those have access to the Internet through their phones.
Another quote to that effect, while dated, from Wikpedia:
Conservative researchers have argued that income inequality is not significant because consumption, rather than income should be the measure of inequality, and inequality of consumption is less extreme than inequality of income in the US. According to Johnson, Smeeding, and Tory, consumption inequality was actually lower in 2001 than it was in 1986. The debate is summarized in "The Hidden Prosperity of the Poor" by journalist Thomas B. Edsall.
Consumption inequality is sometimes referred to as the "lifestyle gap".
“Yet the access of low-income Americans—those earning less than $20,000 in real 2009 dollars—to devices that are part of the "good life" has increased.”
ReplyDeleteClassic cherry-picking leaving out the important stuff.
Consumption is done through credit. If you lose your job you have nothing. They own nothing.
It’s the same situation as during 19th century where the owner of the factory owned the store, the house you lived in and so on and you were forced to work for him, buy from him as he provided the credit, credit enough to get get by, but no more than that.
And of course the cherry picking argument lover never ever brings up the economic stress one lives under when everything you have is bought on credit. It’s the classic “look there instead!” which Ahmed Fares do with copy and paste.
ReplyDeleteAlberta's credit is in bitumen.
ReplyDeleteSaskatchewan's credit is in potash.
S400,
ReplyDeleteThe discussion is about inequality, not financial security, which is a different issue.
And no, these people are not consuming on credit. While people use credit to smooth consumption over the short term, the data which I showed shows decreasing consumption inequality over decades. If these people were borrowing against the equity in their houses, they'd be underwater by now.
People of course dispute those conclusions, like the the Thomas Edsall article mentioned, citing Jared Bernstein and others. Sure there are plenty of poor people whose lives are not hellish. It's an ill wind that blows no good. But anybody who has lived through the past few decades knows that the "conservatives" are peddling line of bullshit. 40-50 years ago the US was rather more equal in every way.
ReplyDelete