"There's not much evidence, in fact, that the wealthy took a huge hit. Their incomes continue to grow, while the bottom 90% or so have stagnated or declined since 2008." SeanI find this an interesting comment, I mean those with wealth (ie stocks, real estate, etc) should have taken a beating in 2008 when the stock and real estate markets crashed. Pew Research: Recovery Facts
And yes I understand that those who lost their jobs and didn't have the skills to find new ones had it worse. Please remember that I lost mine in Dec2012 in part due to the slow recovery, and in part due to a really aggressively reckless company President. On the upside he was shown the door about 1 year later, which is good for my friends who still work there.
Now I appreciate that I was fortunate since I have invested aggressively since I was 25 years old, both in stock/bonds/home and in my continuous improvement. (ie job skills/qualifications and connections) Also, I am a buy and hold individual, Sean is correct that I saw a huge decrease in my net worth in 2008. I mean between stocks going down by 40+% and my home value going down by 20% it was devastating to watch... However since I held firm, didn't sell, kept buying, etc I am doing very well today.
So I can relate to both sides of this topic. Sean do you have any sources to back up your statement? Here is a link with lots of graphs. Global Economic Intersection
One last thought on this... Remember that if I own Subaru or Hyundai stock, I make money when American citizens buy these low domestic content vehicles... However the American workers only make money if you buy the one with the most domestic content.... Just a reminder that your savings or joy likely means lower employment levels and wages in the USA. I saw the folks in China making good use of the trillions of dollars we have willingly sent them. (ie high speed railways, incredible housing projects, wind powered generators, etc)
More Links:
PEW Research: How It Has Changed America
FOX News: Impact On Boomers
EPI The Shadow
31 comments:
Your link shows the story in the top three graphs -- incomes for the wealthy have largely rebounded. Here's a link that has data through 2012 that shows that the top 2 quintiles have seen significant gains, while the others are flat to down (see the graph on page 3).
http://www.bls.gov/spotlight/2014/high-income-spending-economic-recovery/pdf/high-income-spending-economic-recovery.pdf
Note that I'm focused on "income" here, not "wealth". Certainly high wealth folks took a hit in those markets as well. However, their loss of wealth is less meaningful than it was to lower income/lower wealth taxpayers.
BLS High Income Spending Recovery
To me wealth and income are hard to seperate right now. I think in this recovery boom market, my investment gains have been larger than my earned income. (ie salary & benefits) Though they are tax sheltered and I have not sold, so they could evaporate again.
As for earned incomes, it is true that we live in a knowledge based economy. The well educated and/or highly skilled are making more money and the others are making the same or less.
And as I constantly say, a large percentage of US citizens are supporting this with their expenditures. For a test, just look at the cars you pass on the road. Or any other appliances in your life. We simply can not buy high foreign content goods en masse and expect lots of high paying jobs for low skilled low educated American citizens.
So it sounds like you want the low skilled and low educated to be able to benefit from low cost high foreign content goods, and you want to make the other Americans to pay for it through higher taxes and more government programs.
Is that what you want?
Does that seem logical?
I desire a society where there truly is equality of opportunity, and then we can let the results flow from there.
here is a sort of related article that I found very interesting, though I still need to finish it as it was too long for me to read in one sitting.
The wealth gap between black and white families is greater than ever. Here’s how to close it.
Sean,
How do you envision attaining your dream?
I'll use myself for an example. I was raised in a family that believed in academic success, hard work, charity, saving and investing. And my Parents were willing and able to help me grow and learn, and they blessed me with a fairly high level of intelligence and self control. (ie genetics/environment)
On top of this, they learned and received these benefits from their parents and grand parents. And after generations of people learning, working, saving and investing, the family nest egg has grown nicely. And it has been ingrained in me and my siblings that we are to pass all of these gifts on to our children, and we strive to do so. (ie no divorces, drugs, gambling, alcoholism, affairs, excessive spending, etc)
I am very grateful for the huge opportunity advantage my family has given me.
So how do you intend to equalize the "opportunity" and who is going to pay for it?
Is the reward for my family's generations of hard work, relatively good and conservative choices, etc going to be highly progressive tax rates? And the opportunity to pay the expenses of those who chose differently?
I have a lot of free homestead farms in my family tree. Seems like some people had ancestors that were slaves at that time. Maybe when you have time you could consider what other obstacles some citizens have faced in trying to get ahead and accumulate wealth.
I also have a lot of teachers in my lineage, which has been a drag on our families wealth accumulation.
There was slavery in the late 1800's??? (ie past 1870...) In Minnesota??? Wiki MN History It sounds like that is when most of our ancestors arrived here.
Such whining about those poorly paid Teachers again. Most of my ancestors farmed, managed small town stores, etc, and at least one was a Teacher. No land barons in the mix at all, just hard working people who lived below their means, gave to charity and invested the rest.
Maybe when you have sometime you can think of more reasons why those who are failing are not seizing the opportunities they are being given...
Remember my Ethiopian friend who came here at 19 not knowing any English worked hard, used the education programs that are available to minorities, got his Engrg degree from U of MN TC... He is ~29 and was just converted from Contract to Employee status at work and is making a pretty good salary.
Are people like him who we want to reward for making the right decisions and trying? Or do we want to tax him hard so the dead beats have subsidized food, housing, healthcare, etc at his expense?
By the way, I do appreciate the many benefits white Americans and my family have had over the past 200+ years. Whereas some folks like me want to deny that those existed.
At some point though, the Black, Latino and Native American people who are failing to grasp the new opportunities in our country need to accept responsibility for their continuing challenges. Like my Ethiopian friend, many Asian immigrants seem to be doing fine.
Remember these guys who thought they were still owed something... for something...
Here are what I see as the cogs of equal opportunity:
1. Quality public K-12 education
2. Affordable access to college
3. An economic system that adequately rewards workers for their labor
4. A criminal justice system that treats all races and genders fairly
John, you say you're aware of your privilege. But I don't really think you are. A few weeks back I posted a link to the Ta-Nehisi Coates piece which got some legs nationally because of the call for reparations, but at its core it showed how African-American citizens have systematically been robbed of the opportunity to create wealth in the way that your family has. If your family was from the lineage of centuries of persecution by the government and business, I doubt it would have the same virtues that it does today.
And that different treatment by race isn't over today. The details I've previously provided on sentencing disparities, for instance, show that members of some races still have big hurdles to overcome.
I'm not excusing the tragically bad choices that some individuals make, but I'm also not going to tut-tut and shake my head at someone who starts with a lousy hand of cards when I got handed a pair of aces.
How do you explain the success of Asian Americans?
I think they faced many of the same challenges as the Blacks, Latinos and Native Americans, yet they have almost none of the problems.
It took me some time to find it.
Atlantic Case for Reparations
Reparations are never going to happen so I think we should spend $ on programs that are open to the poor of all backgrounds. I think programs to address urban poverty are a good idea also,and might disproportionately help blacks - education, job training, tax incentives for economic development etc (I am not a policy wonk)
I agree with Sean's list but would include pre-k education.
Lastly, some of my relatives came to MN in the 1850's and we became a state in 1858, so we must have had quite a few settlers here. The homestead act was 1862, so maybe people could stake a claim before that.
Those programs have been in place in some form since 1933, and they got a big bump in the 1960's. Those are the programs my Ethiopian friend used.
Yet whole societies seem to be resistant to improvement reparations we have been paying them for 50 years....
I forgot to mention. The wiki link said there were about 450K in 1870 and it tripled soon after.
so do you think sufficient reparations have been paid in the the form of prior programs aimed at the poor,(but not descendants of slaves specifically?)
I think more needs to be done.
Just wondering... Why are Sean and yourself hesitant to tackle the successful Asian immigrant topic?
The Case for Reparations:
Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy.
Do Asian Americans have a similar history?
Maybe if we don't want to spend more $ to address urban poverty we should just put more African Americans in jail in places like Chicago. Here are some statistics to consider how that is working:
Today, the US is 5% of the World population and has 25% of world prisoners.
African Americans now constitute nearly 1 million of the total 2.3 million incarcerated population
African Americans are incarcerated at nearly six times the rate of whites.
What is your point about Asian Americans anyhow? Maybe President Obama should give frequent speeches/lecture encouraging African Americans to get their act together and emulate Asian Americans.
Maybe he should. Strong work ethic, interest in academics, strong family ties, entrepeneurship, etc... That describes most of the Asian Americans I know.
I had a random thought this morning. Arguably 2 of the most challenged third world regions are Africa and Central America. Whereas Europe and much of Asia are relatively successful and stable.
Is there some factor there?
Maybe it has something with ancestors who lived near the equator? (Wiki Map)
I'm not hesitant to discuss it, just haven't been around.
Asian-Americans have some differences than some of the other groups you mentioned. First off, Asian-Americans are more "self-selected" than Latinos (who frequently come here to escape dysfunction in their home country) and African-Americans (many of whom come from a heritage where their ancestors were captured and brought here against their will, then subjected to generations of overt discrimination). Asian-American immigrants are twice as likely to have college degrees when they arrive on American soil compared to other immigrant groups.
It's also true that the Asian-American community is not universally successful. The Cambodian, Laotian, and Hmong communities have higher rates of poverty than African-Americans. Why is that? It's because those communities more often came here as refugees -- Asian-American communities are challenged (just as much of our society is) by lack of mobility.
It's also true that even among Asian-Americans who do have college degrees that they get paid less than whites. And Asian-Americans are underrepresented in senior executive roles at large companies.
PEW: Asian Immigrants
And look at the proficiency and grad rates of the Asian kids as compared to the other minorities. MN Results
I assume a lot of them are Hmong. And yes there is still room for improvement, however they are far ahead of the other minority citizens who have been here a lot longer. Especially if many of the Asians have been here less than 25 years.
And this disturbing info
Single Mothers by Race
Now these folks are doing this to themselves... No reparations required.
State of AP Minnesotans
"The fact that many Asian-Americans have come here more recently is actually an advantage for them compared to African-American communities."
Please explain?
Do you mean they haven't had a chance to become dependent on entitlements?
Or that they still believe in marriage and 2 parent households?
Or they are still excited to learn and work?
Just curious.
I've already explained this:
"First off, Asian-Americans are more "self-selected" than Latinos (who frequently come here to escape dysfunction in their home country) and African-Americans (many of whom come from a heritage where their ancestors were captured and brought here against their will, then subjected to generations of overt discrimination). Asian-American immigrants are twice as likely to have college degrees when they arrive on American soil compared to other immigrant groups."
I am thinking the Hmong, Cambodian, Vietnamese, Burmese, Laotian, Nepalese, etc immigrants would disagree with you regarding their home country education and reasons for moving here.
But I could be wrong.
And all of our immigrants from Somalia, maybe they are self selected also?
After watching "End of Watch" on the flight to China and thinking about it. I was thinking that most movies often show Black and Latino gangs, and they seem to be not too professional.
Where as the Asian gangs are usually portrayed as wealthy, professional and well dressed. I wonder if that is just Hollywood or if it is a related topic.
Do you even read my posts? I discussed the difference between Asian-American communities above:
"The Cambodian, Laotian, and Hmong communities have higher rates of poverty than African-Americans. Why is that? It's because those communities more often came here as refugees -- Asian-American communities are challenged (just as much of our society is) by lack of mobility."
Yes I read your comments and yes they are poor for now. Just like my ancestors were when they came to MN.
Yet they are working hard and focusing on learning. And they will get ahead in time.
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