Your Skittles analogy does not work.
I thought eliminating the minimum wage was a common sense libertarian ideal. Google Economist Walter Williams!
Make no mistake, only one side is concerned with 'fair'.
In short, if all the gains happen for one group, even if the other group isn't directly losing money, their purchasing power will be eroded by the rich. And I'll add that this sort of thing keeps stacking up, because as the rich continue to be able to buy up things like land at a higher rate than the poor, the rich are then able to extract even more money from the poor through rents.
Which economists? Economists generally support freer trade, more open borders and the like because they see trade as fundamentally not a zero sum game: if two parties are willing to make an exchange, it must be because the exchange somehow makes them better off than they would be without it. All of developmental economics is built on this: it's why the majority of the world's population enjoy an incredibly greater standard of living than they did 100 years ago. Everyone is better off.
Which is not to say there aren't situations where economists recognise trade-offs. For example, https://en.wikipedia.org/wiki/Factor_price_equalization: a commonly accepted economic theory that proposes that international trade between poorer and richer countries will make unskilled wages in the poorer countries higher and in the richer countries lower.
Ask people if they would support everyone getting 2x their income tomorrow.
More to your actual point, the imagined choice isn't between doubling incomes for everyone or stagnation. It's between shared growth and the top 1% quadrupling their income, the next 50% growing slowly, and the rest dog paddling or getting poorer.
FWIW income inequality is normally reported proportionally (using the Gini coefficient or something similar) so even in your hypothetical case inequality would be reported as constant rather than increasing.
this would just kill the bank accounts of anyone holding cash.
People think in terms of dollars instead of purchasing power, the fed need only boil the water slow enough for people to remain compliant.
All that matters is what that money can purchase.
This is the funny thing about our steadily increasing minimum wage laws. I've not seen many people discuss why purchasing power keeps declining.
In 1990, $15/hr then was equivalent to $28.72/hr today. [0]
Obviously, something is happening to purchasing power of our dollars, but it doesn't get discussed much.
[0] https://www.dollartimes.com/inflation/inflation.php?amount=1...
its no surprise to me that if you juice the markets and inflate asset prices (mostly stock), that the richest benefit most. what was surprising to me is how bad actually making stuff did. I understand that juicing the markets might not benefit that, but it seemed as though QE3 actually hurt producing tangible things.
Also, something seems off. The animated chart is not data for a given year, it's for the last 34 year ending in that year. Since you're averaging growth over 34 years, the only way the top percentile can go from 3% growth (over 34 years) to 5% is if you average in really huge growth.
Also, the 34 year measurement makes me suspicious. Seems like an odd time period to capture. Maybe if you made it 30 or 40 years the data isn't quite so compelling?
Income Progress across the American Income Distribution, 2000-2005 (https://www.brookings.edu/testimonies/income-progress-across...)
"Finally, incomes are growing less equal. Over the past quarter century Americans at the top of the income distribution have seen much faster income growth than people in the middle class. If average income grows 1% a year and top earners enjoy gains of 2% a year, many people in the middle and bottom will see their incomes grow much more slowly than 1% a year. Top income earners experienced sharp income declines in the last recession, but in the last couple of years their incomes have rebounded strongly. This reinforces the impression that the gains from prosperity have flowed disproportionately to people at the top rather than in the middle of the distribution."
Income Gap Is Widening, Data Shows (https://mobile.nytimes.com/2007/03/29/business/29tax.html)
"Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.'
> (The economists used 34-year windows to stay consistent with their original chart, which covered 1980 through 2014.)
Note that a sharp rise in the curve can also be explained by bad years dropping out of the 34-year window. This would probably explain the increases in the 1%'s weath around 1992 and 2003 (1958 and 1969-70 recessions, respectively). See https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...
"Income is the sum of all the wages, salaries, profits, interests payments, rents, and other forms of earnings received... in a given period of time." Case, K. & Fair, R. (2007). Principles of Economics, p. 54.
Despite some of the recent coverage, this chart indicates that gains are not going to the top 20%: they are going to top 1%, and particularly <1%.
To be clear, this is not many programmers: "In 1980, the top 1% of adult earners in the U.S. made $420,000 a year, on average (before taxes and measured in 2014 dollars) — 27 times as much as the average for the bottom 50% of earners. Today the top 1% of earners make an average of $1.3 million a year — 81 times as much as the average for workers in the bottom half."
HBR also found that gains are increasingly going to the top firms: there is a global set of winners and losers. Inequality is growing everywhere, in all fields. https://hbr.org/cover-story/2017/03/corporations-in-the-age-...
EDIT: I'd also like to plug this really great article on regional inequality which is a huge problem but usually goes unmentioned in these sorts of discussions: http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-...
On another side of life, the moment people have enough to pay the bill, anything more will not make them any happier. Leveling the income or the wealth is not doing anything effective to increasing happiness. What's and where's the problem of inequity? The fact that I can't afford a luxurious yacht trip?
How do you tackle this?
http://nypost.com/2017/05/23/amazon-gave-away-too-many-free-...
Jason Cohen has a lot of good advice on the competitive advantage of small companies: https://www.youtube.com/watch?v=1rMPbAN6i7s
Would nobody else reading this want some further information to back up this statement? Its a shame it wasn't nearer the beginning of the article as I could have stopped reading earlier.
Did you gather this view from reading the tax reform?
The problem is that the Gini index is built to be robust against outliers (those 1%). So no, both locally (US) and globally, inequality is on the rise - even if the Gini index is going up in both cases.
The truth is that the elites in any nations are gaining from the poor.
The idea is to blame one nation's inequality on another nation is like blaming one poor man's tragedy on another poor man's being more tragic; while ignore the ones who causes the tragedy...
And let's not kid ourselves. Those on top intend on staying there by growing the gap.
What do you mean?
In other words, why graph income and not wealth?
I think it's because people's wealth is really hard to estimate. The border between people's assets and their companies', foundations' and what not are usually blurry enough that you would get a graph that shows no insight.
Although income is not a great KPI, at least there are reliable methods to figure it out, or at least make estimates with a quite acceptable precision.
Say someone could have a small business that takes off and retires after a few years with a reasonable retirement fund. This doesn't fit the mold of a hoarding 1%-er.
It seems like discouraging this kind of income spike would actually decrease social mobility.
This advantage has nothing to do with individual skill or hard working ethics. Taxation schemes that don't take this into account are simply unfair.
From Wikipedia: "A preferential attachment process is any of a class of Citation dynamics processes in which some quantity, typically some form of wealth or credit, is distributed among a number of individuals or objects according to how much they already have, so that those who are already wealthy receive more than those who are not."
It's an interesting principle that plays out in economics as well as other situations where skill is involved. It is similar in some ways to the "80/20 rule" if you are familiar.
I would definitely recommend researching the topic a bit. It will definitely add some dynamics to your view of income inequality.
