Why income inequality matters

[IGotWorms 4,063]

http://www.nytimes.com/2014/02/03/business/the-middle-class-is-steadily-eroding-just-ask-the-business-world.html?hp&_r=0&referrer=

 

In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmanns, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models.

 

As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.

 

If there is any doubt, the speed at which companies are adapting to the new consumer landscape serves as very convincing evidence. Within top consulting firms and among Wall Street analysts, the shift is being described with a frankness more often associated with left-wing academics than business experts.

 

Those consumers who have capital like real estate and stocks and are in the top 20 percent are feeling pretty good, said John G. Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers.

 

In response to the upward shift in spending, PricewaterhouseCoopers clients like big stores and restaurants are chasing richer customers with a wider offering of high-end goods and services, or focusing on rock-bottom prices to attract the expanding ranks of penny-pinching consumers.

 

As a retailer or restaurant chain, if youre not at the really high level or the low level, thats a tough place to be, Mr. Maxwell said. You dont want to be stuck in the middle.

 

Although data on consumption is less readily available than figures that show a comparable split in income gains, new research by the economists Steven Fazzari, of Washington University in St. Louis, and Barry Cynamon, of the Federal Reserve Bank of St. Louis, backs up what is already apparent in the marketplace.

 

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found.

 

Even more striking, the current recovery has been driven almost entirely by the upper crust, according to Mr. Fazzari and Mr. Cynamon. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

 

More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income, according to the study, which was sponsored by the Institute for New Economic Thinking, a research group in New York.

 

...

 

While spending among the most affluent consumers has managed to propel the economy forward, the sharpening divide is worrying, Mr. Fazzari said.

 

Its going to be hard to maintain strong economic growth with such a large proportion of the population falling behind, he said. We might be able to muddle along but can we really recover?

 

Mr. Fazzari also said that depending on a relatively small but affluent slice of the population to drive demand makes the economy more volatile, because this group does more discretionary spending that can rise and fall with the stock market, or track seesawing housing prices. The run-up on Wall Street in recent years has only heightened these trends, said Guy Berger, an economist at RBS, who estimates that 50 percent of Americans have no effective participation in the surging stock market, even counting retirement accounts.

The dumbsh!ts here can scream "class warfare!" and "wealth envy!" all they want, but fact is this is going to kill what's left of our economy if it continues.

[MDC 8,011]

Wealth envy and Obummer's fault.

[DankNuggs 305]

http://www.nytimes.com/2014/02/03/business/the-middle-class-is-steadily-eroding-just-ask-the-business-world.html?hp&_r=0&referrer=

 

 

The dumbsh!ts here can scream "class warfare!" and "wealth envy!" all they want, but fact is this is going to kill what's left of our economy if it continues.

You don't think it has anything to do with the lack of jobs and economic recovery? I know your hero tells you everything is great, but its been 5 years and the job market and job creation is still bad.

 

The best way to cure income inequality is with good jobs, not gubmint transfer payments or extending unemployment, or any of the other bandaid, smokescreen ideas being tossed around by liberal know it alls...

[drobeski 3,061]

nyt ?

[TimmySmith 2,783]

The dumbsh!ts here can scream "class warfare!" and "wealth envy!" all they want, but fact is this is going to kill what's left of our economy if it continues.

These DSs could quit voting for democrats.

[drobeski 3,061]

setting the stage for this years dnc platform of victimization

[IGotWorms 4,063]

You don't think it has anything to do with the lack of jobs and economic recovery? I know your hero tells you everything is great, but its been 5 years and the job market and job creation is still bad.

 

The best way to cure income inequality is with good jobs, not gubmint transfer payments or extending unemployment, or any of the other bandaid, smokescreen ideas being tossed around by liberal know it alls...

"My hero"? You are far too smart to sound like RP

[edjr 6,988]

setting the stage for this years dnc platform of victimization

 

Forget this topic.

 

Are you capable of judging any issue on it's merits and not which party you blindly follow?

[IGotWorms 4,063]

You don't think it has anything to do with the lack of jobs and economic recovery? I know your hero tells you everything is great, but its been 5 years and the job market and job creation is still bad.

 

The best way to cure income inequality is with good jobs, not gubmint transfer payments or extending unemployment, or any of the other bandaid, smokescreen ideas being tossed around by liberal know it alls...

BTW I don't know what the answer is, but I think the problem is quite a bit more systemic than you are making it out to be.

 

W tried the whole tax cuts and deregulation approach and that just brought on '08. Clinton had the magic touch but really he was probably just lucky to be prez during the tech boom.

 

Really this all goes back to before Carter and I think it's simply a systemic issue in a globalized world. The race to the bottom, and those who can scurry their way to the top have done so. Problem is even if you're at the top the whole ship slips under eventually.

[Recliner Pilot 61]

Looks like Obama's policies are great for the top 1%, and they are screwing the poor and middle class.

 

Just what he campaigned on.

[IGotWorms 4,063]

Looks like Obama's policies are great for the top 1%, and they are screwing the poor and middle class.

 

Just what he campaigned on.

If your point is that Obama's policies have not helped, I agree.

 

Now let's try to move past that because I think even a hack like you will recognize that this whole thing predates Obama's presidency by quite a bit...what is the real problem and what are REAL (not partisan hack-speak) answers? Think about this one, the answer was not spoon-fed to you on Rush or Fox News...

[drobeski 3,061]

 

Forget this topic.

 

Are you capable of judging any issue on it's merits and not which party you blindly follow?

where on any issue do I indicate my rooting party ? link ? I criticize the dnc for it's continuous fake wars...and will continue to do so. you claim to not be a moonbat but only defend them...mmmmm interesting

[drobeski 3,061]

don't get upset that I call them on their bullshit, because you buy into it.

[MTSkiBum 1,626]

Australia has an income inequality issue as well and they are one of the richest countries in the world.

 

http://m.smh.com.au/federal-politics/political-news/countrys-rich-have-lions-share-of-income-growth-20131009-2v8q2.html

 

 

I think that income inequality is a major problem, however I do not know how to fix it.

[Recliner Pilot 61]

Get the Govt out of the way of job creation. The only way to have a thriving middle class is thru job creation. Reagan took over an economy far worse than the one Obama did, and his policies created 21 million jobs.

 

Also, take keys to the country away from economic morons who think unemployment payments are the best way to create jobs and spur economic growth. That would be dolts like Obama and Pelosi.

[NewbieJr 541]

If your point is that Obama's policies have not helped, I agree.

 

Now let's try to move past that because I think even a hack like you will recognize that this whole thing predates Obama's presidency by quite a bit...what is the real problem and what are REAL (not partisan hack-speak) answers? Think about this one, the answer was not spoon-fed to you on Rush or Fox News...

Are you seriously expecting this from him? Seriously?

[IGotWorms 4,063]

Are you seriously expecting this from him? Seriously?

Nope. I was expecting exactly what I got-- "Reagan!!!" Never mind that the guy was president 30 focking years ago in a wholly different world.

[DankNuggs 305]

"My hero"? You are far too smart to sound like RP

Lol. True. I was being abrasive. I think its funny how little it's contemplated that if the gov took a back seat to workers and business that more money would end up in worker hands. Tax policy impacts business decisions and jobs. If they raised the min wage while cutting biz taxes or offsetting other costs they get more money into people's hands who will spend it with so much more efficiency than the gov

[TD Ryan2 316]

This is all consistent with what I've read / seen. Is it a terrible thing though? Let me explain:

 

Our economy is changing and there are two drastically different classes emerging, and there will be a market for both classes:

 

The elite class, once only considered the 1 or 2%, this group can/will grow to about 20%. These are the people that have either been wealthy all along, or the "new wealthy" that learned to leverage the internet and connection economy. The "new wealthy" rely on an entrepreneurial spirit and success that was nearly impossible achieve before today's technology made it easier.

 

The bottom class: these are the people who were always poorer, but the group now has middle classers that have fallen. This fallen middle class will be educated and have an appreciation for art, but has simply not extracted themselves from being a cog in the old-world industrial revolution model.

[DankNuggs 305]

This is all consistent with what I've read / seen. Is it a terrible thing though? Let me explain:

 

Our economy is changing and there are two drastically different classes emerging, and there will be a market for both classes:

 

The elite class, once only considered the 1 or 2%, this group can/will grow to about 20%. These are the people that have either been wealthy all along, or the "new wealthy" that learned to leverage the internet and connection economy. The "new wealthy" rely on an entrepreneurial spirit and success that was nearly impossible achieve before today's technology made it easier.

 

The bottom class: these are the people who were always poorer, but the group now has middle classers that have fallen. This fallen middle class will be educated and have an appreciation for art, but has simply not extracted themselves from being a cog in the old-world industrial revolution model.

It should be more efficient to hire domestically, the reasons it isnt need to be dissected and mitigated. Not only does our country compete with others, but our states compete too against each other.

[Recliner Pilot 61]

Nope. I was expecting exactly what I got-- "Reagan!!!" Never mind that the guy was president 30 focking years ago in a wholly different world.

Yeah. No way we should look at history and learn from it.

 

What Reagan did worked. What Obama is doing is not.

 

The main reason companies are not hiring over the past few years is Obamacare. They have had no idea how it will affect them, and now that it is finally being implemented, they are seeing how it will be to their detriment. Don't look for this to change until that clusterfukk dies under its own weight.

[MDC 8,011]

Nope. I was expecting exactly what I got-- "Reagan!!!" Never mind that the guy was president 30 focking years ago in a wholly different world.

Or that his presidency was a good example of the problems you're talking about, where incomes at the top went up while remaining stagnant for everyone else.

[drobeski 3,061]

I blame binders

[IGotWorms 4,063]

This is all consistent with what I've read / seen. Is it a terrible thing though? Let me explain:

 

Our economy is changing and there are two drastically different classes emerging, and there will be a market for both classes:

 

The elite class, once only considered the 1 or 2%, this group can/will grow to about 20%. These are the people that have either been wealthy all along, or the "new wealthy" that learned to leverage the internet and connection economy. The "new wealthy" rely on an entrepreneurial spirit and success that was nearly impossible achieve before today's technology made it easier.

 

The bottom class: these are the people who were always poorer, but the group now has middle classers that have fallen. This fallen middle class will be educated and have an appreciation for art, but has simply not extracted themselves from being a cog in the old-world industrial revolution model.

Could well be the case. I think it's clear the old-school "middle class" is going extinct. Rather than trying to save what can't be saved, we should be asking ourselves how we can replace it with a new middle class for the current times.

[IGotWorms 4,063]

Yeah. No way we should look at history and learn from it.

 

What Reagan did worked. What Obama is doing is not.

 

The main reason companies are not hiring over the past few years is Obamacare. They have had no idea how it will affect them, and now that it is finally being implemented, they are seeing how it will be to their detriment. Don't look for this to change until that clusterfukk dies under its own weight.

Obamacare? Really? We're talking about a trend that's been consistently unfolding for 40+ years but somehow a law enacted four years ago is the root cause?

 

C'mon dude, don't be so damn short-sighted.

[TD Ryan2 316]

 

The main reason companies are not hiring over the past few years is Obamacare.

RP - that may be one reason, but I'm not sure it's the "main" reason.

 

After the recession, companies simply learned to do more with less. Most people with a corporate job today multi-task more than ever and companies realize that when a project requires a skillset outside of their current employees, it is better to hire them on a project or contract basis.

 

And this is part of what I'm alluding to in my above post about the 2 new classes. Those folks who have learned to network and essentially market themselves will benefit with all the project and contract jobs. Those who are less entrepreneurial, will fall.

[Recliner Pilot 61]

Obamacare? Really? We're talking about a trend that's been consistently unfolding for 40+ years but somehow a law enacted four years ago is the root cause?

 

C'mon dude, don't be so damn short-sighted.

Really? Companies have not been hiring for 40+ years?

[NewbieJr 541]

Really? Companies have not been hiring for 40+ years?

He's talking about the divide between economic classes. You think that started with Obamacare? Holy fock. Talk about a one trick pony.

[drobeski 3,061]

manufacturing jobs, those were mainly middle class no, guess where they went ? how'd that deal with china work out mr Bill clinton and REPUBLICANS....those guys focked up manufacturing jobs, killed mfg jobs, they sold old the middle class..look it up

 

check out the documentary "death by china"

ofcourse unions played their part as well as nato and greed, but the final nail in the coffin was letting china in.

[KSB2424 3,174]

The dumbsh!ts here can scream "class warfare!" and "wealth envy!" all they want, but fact is this is going to kill what's left of our economy if it continues.

 

Well thats a good way to try and generate thoughtful discussion in this thread.

[Recliner Pilot 61]

Holy fukk you are a dumbass. I addressed the economic divide by saying we needed to create jobs to close it. He whined about Reagan being POTUS 30 years ago, to which I responded we could learn from history and how he created 21 million jobs.

 

I then explained why job creation has been horrible the past few years. If you don't think Obamacare has negatively impacted hiring you are a bigger dumbfukk than I thought........and I didn't think that was possible.

 

Stick to the Bruno Mars thread, you are in way over your ginormous head with these things.

 

 

He's talking about the divide between economic classes. You think that started with Obamacare? Holy fock. Talk about a one trick pony.

 

 

 

 

The main reason companies are not hiring over the past few years is Obamacare.

[NewbieJr 541]

Holy fukk you are a dumbass. I addressed the economic divide by saying we needed to create jobs to close it. He whined about Reagan being POTUS 30 years ago, to which I responded we could learn from history and how he created 21 million jobs.

 

I then explained why job creation has been horrible the past few years. If you don't think Obamacare has negatively impacted hiring you are a bigger dumbfukk than I thought........and I didn't think that was possible.

 

Stick to the Bruno Mars thread, you are in way over your ginormous head with these things.

 

 

 

 

NO, you just want to try to bring every problem in the country back to Obamacare. Like I said, you're a one trick pony.

 

Where was job creation the five years before that? (Be careful. We're going back further than Obama's Presidency now) lol

[Recliner Pilot 61]

Obamacare? Really? We're talking about a trend that's been consistently unfolding for 40+ years but somehow a law enacted four years ago is the root cause?

 

Your link discusses what has happened "post recession". Ya know, since 2009.

 

Feel free to bring something that shows companies have not been hiring for 40+ years.

[DankNuggs 305]

NO, you just want to try to bring every problem in the country back to Obamacare. Like I said, you're a one trick pony.

 

Where was job creation the five years before that? (Be careful. We're going back further than Obama's Presidency now) lol

it is very important to the democratic philosophy to determine that the causes of our issues are structural, unfixable, and beyond our grasp to make better in any meaningful way in the short term.

 

Becuase if you COULD do things to create jobs, and that process beefed up demand for workers, and that demand for workers raised wages and benefits, raised the tax base, lowered the deficit, and put us on a better path, we would focus on doing those things as opposed to tearing up the HC system in order to insure 30 million people, or grant amnesty to 10's of millions of illegals, or whatever pet project nonsense is going on to push us a little farther away from making things better.

[drobeski 3,061]

anyone who argues bigger government is the answer to creating jobs most likely has a government job

[DankNuggs 305]

what if you put a tariff on chinese imports thats puts our manufacturing on an even playing field? what if you lowered taxes or gave incentive bonuses to opening up manufacturing? or to businesses that add domestic jobs? Or do any of the 11ty billion things you can do to make cobbling together a small business more sustainable. The walmarts are the exception, not the rule, and to approach business as if the exception IS the rule is crazy and just political BS.

[BunnysBastatrds 2,676]

Interesting how during Bush's eight years in office we heard how it was all Bush's fault that the jobs were going overseas to cheaper markets and it was all his fault. Six years into Obama's presidency and no one brings up the fact that more jobs are going overseas and are outsourced than when Clinton and Bush were in office.

[MDC 8,011]

Not to detract from the expected thoughtful political discussion but ... I think this is largely a cultural problem and not one we can fix. Years ago a company would've been ashamed to pay a CEO 350 times more than its average worker or to outsource jobs overseas. Today companies feel no responsibility to their workforce.

 

What do you do about that problem?

[DankNuggs 305]

NO, you just want to try to bring every problem in the country back to Obamacare. Like I said, you're a one trick pony.

 

Where was job creation the five years before that? (Be careful. We're going back further than Obama's Presidency now) lol

it was poor, which is why they kept rates low even as the housing bubble took off because the other sectors of the economy were still weak... the housing boom created it own ecosystem of jobs, demand, and production, but it didn't make up for poor areas in the rest of the economy.

[Bert 1,128]

This is all consistent with what I've read / seen. Is it a terrible thing though? Let me explain:

 

Our economy is changing and there are two drastically different classes emerging, and there will be a market for both classes:

 

The elite class, once only considered the 1 or 2%, this group can/will grow to about 20%. These are the people that have either been wealthy all along, or the "new wealthy" that learned to leverage the internet and connection economy. The "new wealthy" rely on an entrepreneurial spirit and success that was nearly impossible achieve before today's technology made it easier.

 

The bottom class: these are the people who were always poorer, but the group now has middle classers that have fallen. This fallen middle class will be educated and have an appreciation for art, but has simply not extracted themselves from being a cog in the old-world industrial revolution model.

This seems to be the answer.

 

 

Let's face it the middle class in this country got fat a lazy making a $100k a year with full pension to tighten lug nuts on an assembly line. As the world economies opened those jobs went to places that would do the same job at a lower cost. Manufacturing jobs are what propped up/inflated the middle class. Those that were smart transitioned into the new wealthy those that didn't fell out of the middle class. Same old story adapt or be left behind.