The authors use graphs to visually represent their data and often use comic strips as a tool of social commentary, which they try to avoid directly engaging in with their prose. They don't pursue deep reasons for the causes of economic inequality, nor do they offer potential remedies. Instead, the article works as an introduction and is intended for an audience with little or no experience in economics, as they define terms like "real income," "wealth," and "median net worth," which experienced economists would already understand.
The article frequently takes an historical perspective in order to show not only how things have changed over time, but also how things are potentially reverting to levels of the past. For example, one graphs shows the top 1% of the population's share of the household wealth from 1922 to 2001 (p. 53). The numbers dip in the middle of this period and then seem to be rising again to previous levels. A rhetorical question lingers behind all of the statistics: are we making any progress in creating economic equality?
Posts
Hey Alex, nice first summary. I noticed a lot of the same observations you made as well when I was reading the article. I found the amount of focus on black/white economic disparity vs men/women disparity to be quite striking. Especially since the Forbes 400 Examples lists only men.
ReplyDeleteI also wanted to touch on your observation that that the article doesn't really go into causes or solutions. The question I wish the article had addressed is what changed around 1979 that caused the giant increase between the richest and poorest economic gains. What happened between the "We Grew Together" graph and the "We Grew Apart" graph? Its probably addressed in later chapters but that's one question I had after reading this article.
The question I wish the article had addressed is what changed around 1979 that caused the giant increase between the richest and poorest economic gains. What happened between the "We Grew Together" graph and the "We Grew Apart" graph? Its probably addressed in later chapters but that's one question I had after reading this article.
ReplyDeleteWell, at the risk of sounding trite, the answer to that is "Reaganomics," and associated policies (e.g. "trickle-down" economics, deregulation).
I don't think it's particularly critical (or feasible) for articles like this to propose sweeping solutions to the kinds of endemic problems they highlight; sometimes the highlighting is enough to start important dialogues. In the case of this article, I thought the focus on the dimension of wealth, as opposed to income and wages, was important to delineate and, dare I say, prescient, given our current economic muddle.
While we're thinking about the limited attention to gender in this article, I thought it was worth mentioning that things look slightly more promising for future gender pay equity as of this week - http://www.google.com/hostednews/ap/article/ALeqM5hnSgsC4p-7rK2IgZ8V1-qMPMj7zwD95SGVNO0
ReplyDeleteHmmm...saying "reaganomics" and "deregulation" doesn't seem to explain much.
ReplyDeleteI'm not an economist, but it seems like inflation should be an issue that we in the liberal arts/social sciences talk about more. People (particularly poor people) can't buy (or save) as much any more because of inflation, which is often caused by the government printing more money in order to pay for programs and to pay off international debts.
Check this website. Debt
It's hard to to rise when the mountain of debt surpasses how fast one can climb.
Saying "Reaganomics" and "deregulation" goes quite a long way, actually, to answering the question "what happened around 1979."
ReplyDeleteI think you must have deleted/amended previous comments, so I won't respond to the ones that no longer seem to be here...
I edited because what I wrote wasn't reading like I meant it to sound; I'm adjusting to the online discussion format.
ReplyDeleteI think Reagan is destined to be a mythological figure of the U.S., the cause of the country's ruin for all Democrats and the cause of the country's salvation for all Republicans. That's why citing his name (or a policy associated with his name, portmanteau of otherwise) without an explanation of your thoughts feels like it doesn't say much. Saying "inflation" doesn't do much better, but it's something that we don't think about much in relation to social mobility.
...and, again, I cannot think of a way to discuss the sweeping economic changes that took place at the 1980 tipping-point without discussing the Reagan administration. Portmanteau though it may be, I mean, "the economic policies, reforms, and ideologies ushered in under the Reagan administration and largely still active today." It remains to be seen if and how they will be changed under the current administration.
ReplyDeleteI really don't think it is problematic to cite this in shorthand by calling it "Reaganomics," so we're going to have to agree to disagree about that.
I mean, I guess I wonder if your issue is with the semantics of the term, or the suggestion that these economic policies are a major part of what might explain the data described in this week's reading.
ReplyDeleteWhen I was reading the article, "Reaganomics" was certainly a point that popped up for me. I don't think Sarah is trying to claim that all of our current financial and social ills are due to Reagan's economic policies. I think that it's crucial to realize that issues such as socioeconomic inequity are due to compounding factors. Yes, I believe that "Reaganomics" played a role in our country's economic state in the 80's. I don't believe that it's the sole reason why we're in the place that we're at.
ReplyDeleteReaganomics was something that also occurred to me when reading the article. Most likely it was the author's intent given the end and start dates of the two charts. I agree that while it contributed to today's economic disparity it was not the sole and possibly not the main reason for it.
ReplyDeleteYeah, I think there is a semantic dispute, in some ways. And I have trouble with reaganomics as a blanket answer, as some have already suggested. I have no problem critiquing reaganomics, it's just become such a large cultural term that I'm not always sure what people mean when they say it. So what specifically about reaganomics you think was most hurtful would be helpful in discussing things.
ReplyDeleteOne thing people often point to with Reagan is his cutting of government. But you have to balance budgets by cutting government, raising taxes, or printing money. For the last forty years or so, we've printed money. Poor people and retired people can't keep up with the rate of inflation. How much has tuition gone up over the years. Someone got a stat; I'll check.
The loads of money Reagan poured into Defense is what I think was hurtful. Sure, he tried to spend the communists into the ground, but now presidents are afraid to cut the military budget, which is way out of control. Will Obama cut the military budget? He should.
Here we go. Tuition
ReplyDeleteMoney Quote: "An 8% college inflation rate means that the cost of college doubles every nine years. For a baby born today, this means that college costs will be more than three times current rates when the child matriculates in college."
For poor people working jobs that pay a wage and not one with a salary that adjusts for inflation, tuition probably looks like more than a mountain.
I did specify: I said "trickle-down economics" and "deregulation," to repeat. I would also include the dismantling of social programs to the other two. I also linked to a wikipedia article for those who were unclear what the term "Reaganomics" is commonly understood to mean. It is not just a term used by the left, for example.
ReplyDeleteI am having trouble understanding what it is you mean when you say "inflation." What is your definition of inflation, exactly? You seem to be using it as a blanket term to encompass a host of socioeconomic changes identified in the readings.
Yeah, I'm probably using "inflation" in a blanketing way. It's not the cause of all problems either. But I'm pointing it out, because it's not really something that seems to enter the academic discourse in the humanities.
ReplyDeleteI use "inflation" to mean the rise in price of general goods and services. People are paying more for groceries, for example. The cost of tuition continually rises. When the amount of money that families are taking in is less than the rate of inflation, then I think it's a major contributing factor to the lack of social and economic mobility. There are other problems and I shouldn't act like it's the only one, but it's major.
use "inflation" to mean the rise in price of general goods and services. People are paying more for groceries, for example. The cost of tuition continually rises. When the amount of money that families are taking in is less than the rate of inflation, then I think it's a major contributing factor to the lack of social and economic mobility.
ReplyDeleteOkay, but what many of the readings were actually saying was not that the problem was in the increasing cost of goods vis-à-vis a static wage and income, but, rather, that real wages and real income are actually decreasing. These are symptoms, too, not causal.
Although I agree that Reaganomics eventually contributed greatly to economic inequalities in the 1980s, I'm not entirely sure it would explain the 1979 cutoff. I wonder if perhaps the oil crisis of the 70s and the beginnings of globalization are the larger culprits here.
ReplyDeleteGlobalization also struck me as a possible contributor to the trends outlined in the readings. The concentration of assets in primarily white, male hands has allowed this group to continue to earn enormous amounts of income generated abroad, while the rest of the populace was dealing with the decreasing wages. I'm interested in what the numbers will look like 20 years from now as we are able to better analyze what happened after NAFTA, CAFTA, etc.
ReplyDeleteI agree that globalization is a huge factor in economic inequality, and as part of that, the closure of small, local businesses. With rise of globalization (en masse, at least) in the early-mid 1980s, many jobs began to be outsourced overseas. Large chain stores, such as Walmart and Home Depot, moved in to smaller areas and in many cases, have shut down the competition. As a result, jobs may have been lost and people were forced to work for lower wages elsewhere, like at one of the chain stores. I know this is a large generalization, but I think it includes some important factors as to why the downturn really began when it did. I think we can start to overcome it, to take a stab at Alex's question, if we start to have more domestic production of goods. This could lead to more jobs, which could lead to higher wages. Of course, we have reign in the fat cats on top and really take good looks at NAFTA, and CAFTA. Just a few ramblings...
ReplyDeleteOne issue that I had with the article is that the author doesn't place a large emphasis on reasoning behind debt within an individual's wealth. Although the author alludes to the small amount of savings in the country (only 1/6 of the population), there isn't a strong description of the other 5/6.
ReplyDeleteComing from a background in business studies, there are two major factors that are applicable to this situation: student loans and credit cards. With student loans, individuals are very likely to enter the "real world" with a negative income, meaning that they actually have to pay off the money that they owe before saving it. Also, credit cards contribute to the small amount of wealth in the country. I think that credit card debt arises from a lack of responsibility of individuals that buy with the money that they do not have/will not necessarily receive in the future.
Here is a link to a great documentary/book that describes the debt riff in American society: http://www.usatoday.com/money/books/2007-03-25-maxed-out_N.htm.
I think that credit card debt arises from a lack of responsibility of individuals that buy with the money that they do not have/will not necessarily receive in the future.
ReplyDeleteHow do unsound/predatory lending practices play into this? What responsibility do corporations, the banking and financial sector, etc. have with regard to extending credit to those who may not be able to use it well?