"But it feels really unfair. People seem to be more sensitive to relative economic status than absolute. So even if people are much better off being poor today than king 500 years ago, most people compare themselves to the richest people today, and not the richest people from the past."<p>I don't think this is the whole story. It's not just that it feels unfair, it's that it really <i>is</i> unfair. Rich people can buy political representation, and unlike wealth, representation <i>is</i> a zero-sum game.
Mentioned this link in another story, but relevant here as well: Americans are surprisingly unskilled at judging where they stand in the income distribution, and unskilled at predicting where they'll end up. 39% of Americans believe that they either are or one day will be among the top 1% [1]. Out of the people who believe they are currently in the top 1%, 95% of them are wrong.<p>Also, people don't realize that relative wealth/income matters. When someone else gets richer and you stay the same (or increase at a slower rate), you're worse off. The increased average wealth/income increases demand and makes things more expensive for you. When LOTS of people around you get richer, and you stay the same, well, look at what's happening with the Bay Area's housing prices.<p>Take the above two claims, add in a scoop of "American Dream" mentality, and it's not hard to understand how so many Americans don't find the current situation troubling.<p>[1]: <a href="http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-self-interest.html" rel="nofollow">http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hop...</a>
"The best thing one can probably say about this widening inequality is that it means we are making technological progress"<p>This is not a considered analysis. It's perfectly possible for wealth distribution to widen without technological
progress.<p>Where is the economics? Where is the history? Where is the politics? I've enjoyed Sam's posts before, but this strikes me as a flavor of SV hubristic reductionism.<p>Not every human issue revolves around technology, and technology is not the solution to every ill.
<i>I was recently in Detroit and was curious to see some of the neighborhoods where you can buy houses for $10-20k. Here are some pictures</i><p>Those houses in the pictures are probably perfectly good houses. We have the same situation in certain neighborhoods on the south and west sides of Chicago. Sturdy brick houses that will last forever but nobody wants to live in because crime in the neighborhood is too high.<p>It was not too tricky to dig the zip code out of the pictures on the blog. You can see the sort of crime that will make houses in your neighborhood basically worthless: <a href="http://www.trulia.com/real_estate/48204-Detroit/crime/" rel="nofollow">http://www.trulia.com/real_estate/48204-Detroit/crime/</a>
One thing that will take longer to be automated away is certainly art (in the broader sense of the word art).<p>As I work with a lot of independent artists (mostly musicians) b/c of my startup BandHub, I can feel how this is the profession of the future - not automatable away. Everyone has something to say - and there is a huge long tail of potential ( niche? ) audiences.<p>Things like Patreon are really cool. I wonder how we can really make it work for anyone, anywhere in the world.
Does anyone else look at those graphs and get the impression that a major (e.g. depression-era) economic correction could be coming in the next decade or so?
Even if the income for the poor and working class has risen compared to generations ago, something that many forget is that absolute quality-of-life for many of them has gotten considerably worse in very important ways.<p>Examples: violent neighborhoods, failing schools, housing blight and decay, lack of access to open space and parks, lack of preventative health care, lack of access to role models for children, lack of access to healthy foods.<p>Even if they have a smart phone and a flat screen TV, what do those things mean when you don't have the basics listed above?<p>I don't think the poor are as upset about differences in income as they are about the fact that they are pushed into, IMO, sub-human living situations.<p>The real question is, why have we made a high income the price of avoiding these terrible circumstances?<p>EDIT: Added a summarizing question.
I think the shrinking middle class has more to do with our monetary system than technological advancements. It is well understood that devaluation of money through inflation is not an effect evenly distributed. It is a significantly larger effect the further from the "source" of the inflation an individual is in the economy. The middle class and poor are quite far from the source.<p>There is also the "feedback" of wealthy individuals being able to more effectively lobby the government to pass economically favorable legislation for themselves. I believe this is a very strong factor in the shrinking middle class as well.<p>Although the author gives statistics showing the increase in wealth disparity, there seemed to be little evidence supporting the thesis of the article which is that technology is driving this phenomena. Also, more compelling data would also be showing a period in US history when the middle class was expanding and then began to decline. Then the author could give a better argument to what changed. Though, I guess technology is always "advancing" so in that sense, he/she would never be able to find a proper place in time. Maybe "the dark ages"? :)<p>tldr;? Liked the data showing the increasing wealth gap, felt the argument that it is fueled by technological advancements to be weak to nonexistent.
He makes this article about technology, but talks consistently about the top 1%. He draws no direct connection between the top 1% and technology. Are people in the top 1% taking the google bus to work? What percent of them are in technology vs say... oh... finance?<p>I am not disputing that wealth inequality in the states has already reached incredibly disturbing levels but making this argument about technology (without any actual support for it) is not only silly but distracting to the core point.
What are the potential downsides to artificially lowering wealth inequality?<p>One of the first things you learn in engineering and life: nothing is free. There are trade-offs and costs to every decision. I could even describe the engineering process as mapping the valley of compromises between the mountains of constraints. Where is the optimal valley between total equality and total inequality? What happens when we end up too far in either direction?
<i>"Many people have a visceral dislike to the idea of giving away money (though I think some redistribution of wealth is required to reasonably equalize opportunity), and certainly the default worry is that people would just sit around and waste time on the Internet.</i><p>Well -- I don't think that completely does justice to all of the concerns about this. What about inflationary worries? If it's taken as a given that everyone gets X dollars, doesn't that just encourage inflation, much like what has happened in education with the easy availability of student loans?<p>Right or wrong, that's an objection I've heard voiced before -- and it's more sensible/understandable than just greed or an intrinsic aversion to generosity towards the less well off as is painted in the quoted section.
How sure are we that technology is the cause?<p>Another comment mentioned inflation [1].<p>I'd like to bring up the possibility that globalization is the culprit.<p>If there's a large pool of workers in poor areas of the world willing to work for $1 / hour or less, then theoretically we should see a shift in capital and infrastructure spending trying to connect them to the global economy, and wages everywhere else will try to lower to that level. AFAICT that's more or less exactly what's going on.<p>Also, in the US, from c. 1960-1990 labor unions had a monopoly on unskilled labor in many domestic markets, which allowed the price of labor (i.e. wages) to move away from a competitive pricing model and get closer to monopoly pricing model. Globalization allowed companies to break the unions' monopoly on labor by moving operations to other countries.<p>The solution is simple and obvious: If producing X in country Y saves you D dollars due to lower wages, laxer safety/environmental regulations, lower taxes [3], etc., you should tax those goods by D dollars when they cross your border. However, the money that can be made by avoiding monopoly labor pricing means that the business community successfully bribes / lobbies politicians. Even educated voters are largely ignorant of economics, and politicians can usually come up with rhetoric to support just about any economic policy they want, so the voters don't provide enough political force to stand up for their interests in a way that's effective.<p>Warren Buffett talked some years ago about why we need to have tariffs [2]. In the State of the Union, Obama mentioned giving tax advantages to companies that locate their operations in the United States.<p>We'll see what happens, but I'm skeptical about whether there's any political will for meaningful policy change.<p>[1] <a href="https://news.ycombinator.com/item?id=7152014" rel="nofollow">https://news.ycombinator.com/item?id=7152014</a><p>[2] <a href="http://money.cnn.com/magazines/fortune/fortune_archive/2003/11/10/352872/" rel="nofollow">http://money.cnn.com/magazines/fortune/fortune_archive/2003/...</a><p>[3] Think of the case of small countries that don't have much of their tax revenue go toward military, but benefit from the relative peace and stability of the current post-cold-war geopolitical situation which is partially the result of much greater military spending by the US.
One thing that developers can do is think about how they can build products that give other people an opportunity to make income online. Marketplaces, payment processing, etc. Build sites that encourage people to learn to code or design, build tools to enable web designers to launch better sites, give small business owners new ways to monetize their sites and compete online. One of the things I'm most proud of as a developer is that we can build things that not only reward ourselves, but create opportunities for others.
Why are there no y-axis labels on the first chart? That seems manipulative to me, so we just have to accept the author's own definitions of "rich" and "middle class." It also seems manipulative in chart 2 to label the middle quintile in big letters as "middle," as if just that 20% is the middle class. I'd love to see more transparency in these charts so I can make my own conclusions. It almost seems like the charts go out of their way to hide the absolute dollar amounts.
Inequality is not just about poor people feeling bad because the rich have bigger TVs!<p>In modern countries, markets are the standard way of distributing finite or growth-limited resources (e.g. apartments in San Francisco). In these games the ONLY thing that matters is relative wealth.<p>As a result of this, poor people become measurably poorer as a result of other people getting richer.
This is very interesting and well-written, but there were two usability issues that distracted me from fully appreciating it:<p>1. Why aren't the footnotes hyperlinks -- or better yet, mouseovers? Sam, if you're reading, the minor effort needed to do that would pay for itself many-thousandfold as your readers are spared from having to scroll up and down over and over. Not doing that for them, intentionally or not, signals to your readers that you don't care. And it wrecks their train of thought as they're trying to follow along.<p>2. Why does footnote [1] show up in the text <i>before</i> footnote [0]?
This is just elitist bullshit.<p>Living on minimal wage is quite different in Detroit and San Francisco. I think author has debt for next 100 years thanks to elite college and $1M house.