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balderdash 7 hours ago [-]
the thing that doesn't compute for me is that the definition of upper middle class here is 5-15x the federal poverty line, ok, but in 1970 the federal poverty line was like ~$3k (and ~$22k today) 10x in 1970 (~33k/year) in nyc you could buy a 2,000 sqft apt for like 2.75x your salary [1] today, that same apartment is like >10x - so while perhaps more people are earning "upper middle class" incomes, what that gets you has declined significantly.
The poverty line, as established in the 60s, is simply 3x the minimum food budget. Food as a percentage of spending has decreased, while housing and other expenses have dramatically increased.
If the poverty line were to be adjusted to reflect the share that food takes up of income today, from ~30% in 1963 to ~6% today, the threshold for a family of four would go from ~30k a year to ~150k.
That article is BS, the author even acknowledges that in a later post.
The main reason the share went from 30% to 6% is because people are richer. Poor people spend more money on food than rich people.
ksymph 3 hours ago [-]
It's true that lower income families spend a higher proportion of money on food [0], but that was equally true in 1963. It's a static fact about income brackets at any time, and doesn't explain the change in average share.
Food share dropped from ~30% to ~6% because real incomes have risen and food has become cheaper relative to housing, healthcare, education, and so on. That shift affects all income levels, including the poor. Your point doesn't contradict the article's, that the poverty line, based on 1960s food budgets, no longer reflect current costs of living.
Could you send the article where the author revises their claim?
That sounds specifically like the housing shortage that is afflicting some of the most dynamic, productive parts of the country, like NYC and the California Bay Area.
Driven by NIMBYism and some other things, those areas stopped building anything like enough housing, with the obvious result that demand outstripped supply and prices rose, putting them out of reach of many.
That's kind of the origin story of the YIMBY movement, which started forming to fight that trend.
balderdash 7 hours ago [-]
I don't disagree but i also think in terms of actual numbers, the majority of the people that earn these upper middle income salaries are living in more expensive urban areas (at least before work from home)
pc86 6 hours ago [-]
Aren't these two different things?
Should "upper-middle class income" refer to your income regardless of COL, or should it refer to an arbitrary measure of what you can buy with it?
RickJWagner 5 hours ago [-]
I remember 1970.
Few people had air conditioning. Cars might last 100,000 miles, if you got a good one. They performed poorly, got awful mileage, and crushed the passenger compartment if you got into an accident.
Many people smoked, and people died younger. Medicine wasn’t as good.
Rich kids might have a giant set of books called an ‘encyclopedia’. It was about the only way to learn things that were outside your circle, there was no internet.
TV came in 3 channels, and you had to be sitting in front of it when your show came on. There was no way to record a show for later viewing.
Of course race relations were much worse then. So were things for women and others. Job advancement wasn’t the same as it is today.
I wouldn’t go back for anything. The poorest people today ( even the homeless, who seem to often have really nice tents and weather gear, relatively ) have it better than in 1970.
I don’t care what things cost. Practically everybody is richer today.
eesmith 4 hours ago [-]
The 1970s energy crisis as a result of issues in Israel and Iran did indeed help improve cars.
We had this thing called a 'library', with 'books', which helped me learn things outside my circle. Our schools even had a full-time librarian to help us with the technology. Even our church had a library, with a bunch of Tom Swift books.
We didn't live in the boonies like you did. On VHF we had 3 commercial network TV stations, an independent station, and PBS. On UHF there were more, including another PBS station, another independent station, and a commercial station in the Spanish International Network (SIN).
My parents could afford to buy a home and raise a family on a single income from my high school educated father. He died 10 years ago. My mother still gets benefits from his pension plan.
It's also true that cheap ass nylon tents are better than the canvas tents we used to camp in. While we metaphorically drown in plastic as the anthropogenic global warming predicted by the 1970s tightens its grip ever more.
alephnerd 7 hours ago [-]
> in 1970 (~33k/year) in nyc
Comparing NYC in the 1970s to today isn't a "big apple to big apple" comparison.
NYC in 1970s was on the verge of bankruptcy [0] and federal receivership, saw 1,000 industrial firms leave annually leading to 500K jobs lost from 1969-76 [1], and saw around 880K residents [2] leave for suburbs or other states. NYC didn't recover until the 2000s [3].
For your discussion, a better comparison should be cities+towns that were rich in the 1970s that remained rich in the 2020s, and cities+towns that were poor in the 1970s and remained poor in the 2020s. Similarly, a better contemporary comparison for NYC in the 1970s would be Detroit or potentially even Los Angeles.
yeah that was a pretty cheap time to buy in nyc for sure - but i don't think that anyone would argue that the the ratio of home price/income has stayed flat/decreased over the past five decades
tdb7893 7 hours ago [-]
The headline is a remarkably rosy spin on it when the subheading is "Research shows that ranks of higher earners have grown markedly over last 50 years, while lower rungs of middle class have shrunk". The article is behind a paywall but it makes it sound like inequality is increasing.
shipman05 7 hours ago [-]
That's the whole point. When people hear "the middle class is shrinking" they intuitively believe people are slipping down a rung and joining the ranks of the working poor. The data doesn't back that up. The middle class is shrinking, but more people are moving up a rung than falling down one.
Which isn't to say that you're wrong about wealth inequality increasing. The share of wealth controlled by the ultra wealthy IS increasing, but the specifics of how that is playing out are nuanced and, at times, counter-intuitive.
saulpw 7 hours ago [-]
> more people are moving up a rung than falling down one.
How do you figure that? Do we have any data that backs that up?
granzymes 6 hours ago [-]
You are commenting on the article that contains data that backs that up.
saulpw 6 hours ago [-]
Since 1970. It's quite misleading to take two data points spread 55 years apart and make the titular claim as though the trend is continuing.
pc86 6 hours ago [-]
If you look at the top of this page you'll see an article with data.
nyeah 7 hours ago [-]
But, Doctor, the data does back that up. The US middle class is shrinking, and most of the shrinkage is on the low end. There's no mystery about this, only potential for distractions.
commandlinefan 7 hours ago [-]
My son graduates college next month. Although he has an ok job lined up, he and most of his cohorts are incredibly pessimistic about the future and I'm not sure I can say that I blame them.
mfro 7 hours ago [-]
I don't know a single young person who has entertained any hope of owning a decent house at any point in the next 20 years.
pesus 6 hours ago [-]
It's the norm now, depressingly. Prior to 2020, It seemed like it might be eventually possible for some of us if we make smart decisions in terms of careers, saving money, and everything else.
Post 2020, and now especially with the economy being propped up by AI that appears to be on the verge of killing (or at least significantly wounding) one of the last viable career paths that would allow for homeownership, I've accepted that it probably just won't happen. Same with having children. Somehow having both feels like a pipe dream.
It's also why I'm not shocked that a significant number of startups lately are just young people doing whatever they can to grab some wealth before things get even worse. Overall, there's an expectation that things will simply keep getting worse with little chance of turning around. It'll be interesting (in a morbid way) to see how this affects the kids currently growing up today.
alephnerd 7 hours ago [-]
Pretty much. It's reiterating an observation of mine [0] that we now live in a K-shaped economy where the 70th percentile and above are distinct from the 50th percentile and below.
Most HNers and their social peers are in the 70th percentile and above.
The economy is not a zero-sum game. Inequality doesn't materially harm anyone as long as it's caused by the rich (or middle class in this case) getting richer and not by the poor getting poorer.
Obviously if the poor got richer too that would be even better (that's a whole other discussion), but that they didn't in this case doesn't make this bad news unless you're the kind of jealous person who hates hearing about other people's success.
pixl97 7 hours ago [-]
>Inequality doesn't materially harm anyone as long as it's caused by the rich
Asset inflation disagrees with you. You end up in a situation where you make more money, and you can buy more stuff, except stuff in a few particular but important categories. For example physical properties.
Ajedi32 6 hours ago [-]
The term you're looking for is "real wages". Obviously I'm not claiming that someone making the same nominal wage in 1980 as they do now in 2026 is just as well off. That would count as "getting poorer".
That doesn't account for the growing asymmetry in the CPI. In the CPI, the asset bubble really only shows up as housing and perhaps transportation. Meanwhile consumer goods go down to compensate (as you'd expect from CPI being in the feedback path for the monetary creation "operational amplifier"). So we're left with everyday expenses continuing to be affordable (eg food, toiletries) while life expenses become ever more unaffordable (eg buying a house).
If you want to refute the argument, you have to find a graph of wages normalized in terms of the cost of a starter home in areas with active economies. But I suspect that is going to be hard.
Ajedi32 5 hours ago [-]
Yes, if you cherry pick a few things that are disproportionately going up in price and say inflation should be calculated based solely on those things then you can make the numbers look worse. Or the reverse if you cherry pick things that are going down in price. I don't think either of those would be a more reasonable approach than looking at CPI.
pixl97 4 hours ago [-]
I mean if those things are housing, medical care, and education that's not really cherry picking at all.
Ajedi32 4 hours ago [-]
Yes it is. CPI already takes those things into account. If you ignore all other living costs in favor of just looking at those three things because they're the things that are going up the most then you're not getting an accurate measurement of purchasing power.
mindslight 5 hours ago [-]
It's not a "cherry pick" - the critique is specifically about the asset bubble. Owning assets is what it takes to be economically enfranchised in our system. Even though the asset bubble encompasses much more than just housing, I was meeting you halfway by focusing on where the asset bubble connects to the CPI metric. But with this response it seems as if you're intentionally trying to dodge the issue by focusing on the CPI.
Ajedi32 4 hours ago [-]
I guess I would just disagree and say that having money makes you "economically enfranchised" by definition. That's why I'm talking about CPI.
If you ignore CPI in favor of solely looking at who can afford to buy real estate in big cities ("areas with active economies") then yes, perhaps things have gotten worse, but I'm saying that's the wrong metric to be looking at.
mindslight 7 hours ago [-]
Note that a similar effect has now moved into traditionally consumer markets as well. It started showing at the grassroots with hoarding toilet paper and whatnot during the first Grump catastrophe, but has now solidified with things like completely fucking up the market for computing hardware.
I think I liked it better when the elites mainly conspired while playing mega golf - having that as the social attractor made for a naturally limiting effect on the imaginations of the people poised to do damage. If you would have gone to most coaches of distance-pissing teams (eg Gold Mansacks) in the 90's and asked for trillions of dollars to buy up all the RAM chips, you would have gotten answers on the order of "Kernel who?!". Now they're like "this guy looks like a serious nerd, we better not get left behind!"
pixl97 6 hours ago [-]
Eh, I won't say buying up of commodities to manipulate markets is a new things exactly. Hell, look up the "Onion futures act". I think maybe the change here is a more of an institutional collapse of government entities that would attempt to stop this.
mindslight 4 hours ago [-]
Another new thing is that the disruption is framed in terms of a purportedly productive-investment purpose, getting more people and capital onboard. Also with the coordinated irrationality there is a lot more momentum for priming a pump that will endure long term. Sure we can fantasize that all of these datacenter buildouts will go bust, leading to a glut of RAM and we can party like it's 2001. But does anybody think that will actually happen?
I'd say the real upstream problem is the lack of new "thick" business creation. Which is a tough thing to analyze in terms of semiconductor fabs, as they are notoriously centralized-capital-intensive regardless. So I'm not looking to flesh out that argument in this context, but it does fit the anti-competitive less-efficient market pattern I've noticed across the board.
The main pressure relief valve on the horizon seems to be China building new fabs, but that kind of demonstrates how our own Western-aligned market has eaten itself.
tdb7893 6 hours ago [-]
Inequality is inherently bad for dynamic market economies. Often the argument is that increasing inequality is fine if the economy is growing and the lower classes aren't losing income but inequality also slows growth as more of the investment goes to consumption for fewer and fewer people. So economically I agree that inequality is not zero sum but it seems like inequality lowers the total productivity of the economy in the long term (so it's net-negative sum).
This is in addition there are effects on the civics and reduction in welfare of people. Like many things in economics, inequality is a hard thing to do good experiments on but the data suggest that inequality itself has a host of effects that you're ignoring.
Edit: there's a lot of literature on this. If you use Google scholar you can find tons of articles talking about the various effects of inequality (though as always with economics, the papers struggle to get good data). Modern economics definitely doesn't view it as an isolated and benign thing.
Ajedi32 5 hours ago [-]
> inequality is a hard thing to do good experiments
> the papers struggle to get good data
Note also that I'm specifically talking about inequality in isolation ("as long as it's caused by the rich getting richer and not by the poor getting poorer"), which I would argue is even harder to study.
It would be completely unsurprising to learn high inequality is correlated with higher rates of poverty, which is correlated with all sorts of other negative causes and effects. I don't know how you could control for that well enough to be able to convincingly claim that inequality itself is what's causing the problem and not the poverty (or the underlying causes thereof).
I would also acknowledge higher inequality certainly makes people envious, and that that probably has some negative societal effects. But I don't know I'd go so far as to count making someone envious as "materially harming" them even if there are other significant downstream effects to that.
I'll admit there's a lot more reading up I could do on this, but it would take a lot to convince me of the idea that making one group of people wealthier without hurting anyone else's finances is a net negative on society merely because it "increases inequality".
tdb7893 5 hours ago [-]
My point is that inequality in isolation doesn't happen. It's a hypothetical that doesn't exist. It's like talking about sugar and ignoring calories
Ajedi32 4 hours ago [-]
Except in this case we're commenting on a thread about the middle class getting wealthier, and you implied that's a bad thing because, in isolation, the middle class getting wealthier increases inequality. (Apologies if that's not what you were trying to say.) My point is I don't think that's the right way to look at this news.
srean 7 hours ago [-]
Not necessarily.
If the size of the pie is growing then it might be ok for the 'poor'. They get a smaller share of the bigger pie that is still bigger than what they had before.
However if the pie hasn't grown as fast as the inequality has grown, then their share has been on a continuous decline.
The US is not a high pie growth economy.
Rich getting richer can very much better a serious problem when the pie does not grow to keep up.
Ajedi32 7 hours ago [-]
That's just another way of describing a scenerio where the "poor are getting poorer". Focusing on the share of the pie ("inequality") is a red herring, if the poor are getting less wealthy in absolute terms that's bad regardless of whether inequality is increasing or decreasing.
srean 6 hours ago [-]
Depends on how poverty is being measured.
Many measure it in terms of money and not the sum total of goods and services that they can claim. Infact in lay person literature it is usually measured in terms money (+ liquid assets), at best inflation adjusted if they are comparing different times.
This why one needs to think in terms of the 'pie'.
> if the poor are getting less wealthy in absolute terms that's bad regardless of whether inequality is increasing or decreasing.
In complete agreement with that. I did not realise that my comment conveyed the opposite.
01HNNWZ0MV43FF 6 hours ago [-]
No, inequality is bad because money buys political power. Using some made-up numbers:
Say a typical cost of living is $50,000 per year. If you make $100,000 per year after tax, you can spend that extra $50,000 per year on political efforts - Lobbying, propaganda, political campaigns, soft power, hard power, land-grabs, etc.
If you have a billion dollars, you make about 30 million per year in returns. Cost of living is a rounding error.
Every billionaire is capable of outspending 600 six-figure software engineers, while sitting on their ass all day every day, or networking, or playing tennis. I think they realize this.
Do you think it is dangerous for a civilization when someone can dedicate all their waking hours to amassing power through any means possible, while they have more financial power than 600 middle-class people?
alsetmusic 7 hours ago [-]
Also, more Americans are living in poverty. But don’t look over there.
Ive found lately that a few sites, including WSJ, archive.ph just hangs on the loading screen. The existence of your link should make it skip the loading, as in understand it. Is there a trick to this?
amelius 6 hours ago [-]
No kidding. If you allow a population to gamble online, with prediction markets, derivatives, etc. don't be surprised if you widen the wealth gap.
More winners, but even more losers.
But hey, you only ever hear about the winners, so it's great for the image. America is doing great!
MoltenMan 6 hours ago [-]
The subtitle specifically says 'the lower rungs of middle class have shrunk'? This seems a little ridiculous to just say. As trendy as it is to hate on modern day life and talk about how awful it is, in material terms it's pretty clearly better than it's ever been.
amelius 6 hours ago [-]
> The subtitle specifically says 'the lower rungs of middle class have shrunk'?
Yes, perhaps because they are now in the class below that?
happytoexplain 6 hours ago [-]
>in material terms it's pretty clearly better than it's ever been.
On a time scale of centuries, sure. On a time scale of decades, absolutely not.
guzfip 7 hours ago [-]
Great for these people, but will there be such opportunities for their children?
I thought I did well for myself, finding myself among the middle class, the end is on the horizon.
PowerElectronix 7 hours ago [-]
The social elevator works well enough to expect that one's children will do well if you provide them with the tools they'll need (which are basically a good education and love and support).
Computer0 6 hours ago [-]
Is that an assertion? I don’t know that is necessarily always true in modern America.
flyingcircus3 6 hours ago [-]
It does seem like a lot of people have extrapolated the second half of the 20th century to be the baseline expectation from here on out.
6 hours ago [-]
commandlinefan 6 hours ago [-]
I'm worried about my kids, but don't forget to worry about yourself, too! I've got just enough saved up for retirement by current retirement calculator standards (if I keep working and contributing until I'm 67), but inflation could easily end up negating all of it long before I can use any of it.
alephnerd 7 hours ago [-]
> but will there be such opportunities for their children
Yes, assuming they grew up in a household in the 70th percentile or above [0] income bracket and/or are on good terms with your parents and siblings.
At the end of the day, the family unit matters because intergenerational wealth has always been important.
> I thought I did well for myself, finding myself among the middle class, the end is on the horizon
Are you maxing out your Roth 401K (and if possible) your Roth IRA as well while also keeping fixed costs like rent or mortgage at around 40% of post 401K+IRA disbursement?
If so, you have a shot of climbing up into the upper middle class.
> but will there be such opportunities for their children?
Yes there always are.
To Downvoters: This statement is obvious. I'll tell you why then:
In 2008, most of you remember the 2008 crash Don't you? There were opportunities then.
We had the 2020 crash in the Covid era, there were opportunities as well back then.
There will obviously be another crash in this AI hype cycle and the moment the crash arrives, there will certainly be more opportunities from that.
I'll give you a massive head start: crypto, x402 / tempo, energy, and robotics.
materialpoint 7 hours ago [-]
"For the first decade of his career, he lived in an apartment and worried about paying for vacations. Then, in his early 30s (...)"
... here is America, without paid vacation guaranteed by law since the government does not truly care about the middle or working class. It's amazing how serious media can write articles about economy, while the blatant obvious deficits slip right by their nose..
PowerElectronix 7 hours ago [-]
Mandating by law paid vacations, laid parental leave, etc... doesn't make those things materialize out of thin air.
Every company accounts for those things and takes a bite off the paychecks of their employees to cover those expenses.
In america a lot of companies offer those without being mandated and those that don't have to offer higher salaries to stay competitive. End result is that employees that want can user those higher salaries to pay for the vacations or take some time off. And those that don't get to keep the extra money, of course.
anxrn 7 hours ago [-]
While I agree with your sentiment, the article seems to be referring to being able to afford vacation trips, not that vacations are unpaid.
hyperhello 7 hours ago [-]
The blatant obvious deficits are where the money is made. The articles are written to help you focus either on pie in the sky or on meaningless stock jitters.
guzfip 5 hours ago [-]
Reminds me of when all the Silicon Valley freaks decided to suddenly care about the fertility crisis, but also would turn around and pronounce how young professionals need to be 996 slaves to survive their brave new world.
xtodoubt 7 hours ago [-]
[dead]
ljsprague 7 hours ago [-]
[flagged]
rapind 7 hours ago [-]
> Immigration strategy over the last sixty years clearly unrelated.
Near-trillionaires also clearly unrelated.
ljsprague 1 hours ago [-]
Por que no los dos?
spwa4 7 hours ago [-]
Yeah that's something you fail to see until you visit the third world or a communist hellhole for the first time. And for mostly the same reason: the government is a dictatorship captured by a few individuals.
The inequality in Geneva or New York is MASSIVE. It's a problem. But it's absolutely pitiful compared to inequality in New Delhi or Havana. Plus it's what you keep hearing from ex-Soviets: that apparatchiks and normal people had the same money, but DIDN'T have access to the same stores. Guess which ones had stocked shelves?
The problem communism creates, ironically, is massive inequality.
rapind 7 hours ago [-]
> The problem communism creates, ironically, is massive inequality.
There is no communism. It doesn't and never has existed. It's just an ideal that that corrupt and powerful leaders can espouse while truly being an oligarchy / authoritarianism. It's also great for capitalist oligarchs to point to as a bogey man.
The fact that everywhere it's been tried ends up as an oligarchy should make this obvious. Can you point to any real communism in the wild? Just like you can't point to a truly free market... They are just ideas, often touted / abused / blamed.
htx80nerd 7 hours ago [-]
"Americans"
laidoffamazon 7 hours ago [-]
As someone that thinks of myself as a low-caste, middle class American it's interesting seeing all of these people listed in the article making less than me
HWR_14 6 hours ago [-]
A lot of people consider themselves middle class and are wrong in that self assessment. It goes both ways, you have people making a half a million a year and people making twenty thousand who both consider themselves middle class.
laidoffamazon 5 hours ago [-]
I went to a state school, worked at Amazon and didn’t get a 2300 on my SAT - I definitively am lower caste but the caste/class divergence isn’t well understood in culture I think.
HWR_14 4 hours ago [-]
You're the one bringing up caste. Middle class is determined by income and it's not subjective.
[1]https://www.elikarealestate.com/blog/tracing-buying-real-est...
If the poverty line were to be adjusted to reflect the share that food takes up of income today, from ~30% in 1963 to ~6% today, the threshold for a family of four would go from ~30k a year to ~150k.
More in-depth explanation here: https://www.yesigiveafig.com/p/part-1-my-life-is-a-lie
The main reason the share went from 30% to 6% is because people are richer. Poor people spend more money on food than rich people.
Food share dropped from ~30% to ~6% because real incomes have risen and food has become cheaper relative to housing, healthcare, education, and so on. That shift affects all income levels, including the poor. Your point doesn't contradict the article's, that the poverty line, based on 1960s food budgets, no longer reflect current costs of living.
Could you send the article where the author revises their claim?
[0] https://en.wikipedia.org/wiki/Engel%27s_law
Driven by NIMBYism and some other things, those areas stopped building anything like enough housing, with the obvious result that demand outstripped supply and prices rose, putting them out of reach of many.
That's kind of the origin story of the YIMBY movement, which started forming to fight that trend.
Should "upper-middle class income" refer to your income regardless of COL, or should it refer to an arbitrary measure of what you can buy with it?
Few people had air conditioning. Cars might last 100,000 miles, if you got a good one. They performed poorly, got awful mileage, and crushed the passenger compartment if you got into an accident.
Many people smoked, and people died younger. Medicine wasn’t as good.
Rich kids might have a giant set of books called an ‘encyclopedia’. It was about the only way to learn things that were outside your circle, there was no internet.
TV came in 3 channels, and you had to be sitting in front of it when your show came on. There was no way to record a show for later viewing.
Of course race relations were much worse then. So were things for women and others. Job advancement wasn’t the same as it is today.
I wouldn’t go back for anything. The poorest people today ( even the homeless, who seem to often have really nice tents and weather gear, relatively ) have it better than in 1970.
I don’t care what things cost. Practically everybody is richer today.
We had this thing called a 'library', with 'books', which helped me learn things outside my circle. Our schools even had a full-time librarian to help us with the technology. Even our church had a library, with a bunch of Tom Swift books.
We didn't live in the boonies like you did. On VHF we had 3 commercial network TV stations, an independent station, and PBS. On UHF there were more, including another PBS station, another independent station, and a commercial station in the Spanish International Network (SIN).
My parents could afford to buy a home and raise a family on a single income from my high school educated father. He died 10 years ago. My mother still gets benefits from his pension plan.
It's also true that cheap ass nylon tents are better than the canvas tents we used to camp in. While we metaphorically drown in plastic as the anthropogenic global warming predicted by the 1970s tightens its grip ever more.
Comparing NYC in the 1970s to today isn't a "big apple to big apple" comparison.
NYC in 1970s was on the verge of bankruptcy [0] and federal receivership, saw 1,000 industrial firms leave annually leading to 500K jobs lost from 1969-76 [1], and saw around 880K residents [2] leave for suburbs or other states. NYC didn't recover until the 2000s [3].
For your discussion, a better comparison should be cities+towns that were rich in the 1970s that remained rich in the 2020s, and cities+towns that were poor in the 1970s and remained poor in the 2020s. Similarly, a better contemporary comparison for NYC in the 1970s would be Detroit or potentially even Los Angeles.
[0] - https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article...
[1] - https://www.polyarchives.hosting.nyu.edu/exhibits/show/strug...
[2] - https://www.pbs.org/wgbh/americanexperience/features/blackou...
[3] - https://www.osc.ny.gov/files/local-government/publications/p...
Which isn't to say that you're wrong about wealth inequality increasing. The share of wealth controlled by the ultra wealthy IS increasing, but the specifics of how that is playing out are nuanced and, at times, counter-intuitive.
How do you figure that? Do we have any data that backs that up?
Post 2020, and now especially with the economy being propped up by AI that appears to be on the verge of killing (or at least significantly wounding) one of the last viable career paths that would allow for homeownership, I've accepted that it probably just won't happen. Same with having children. Somehow having both feels like a pipe dream.
It's also why I'm not shocked that a significant number of startups lately are just young people doing whatever they can to grab some wealth before things get even worse. Overall, there's an expectation that things will simply keep getting worse with little chance of turning around. It'll be interesting (in a morbid way) to see how this affects the kids currently growing up today.
Most HNers and their social peers are in the 70th percentile and above.
[0] - https://news.ycombinator.com/item?id=47064222
Obviously if the poor got richer too that would be even better (that's a whole other discussion), but that they didn't in this case doesn't make this bad news unless you're the kind of jealous person who hates hearing about other people's success.
Asset inflation disagrees with you. You end up in a situation where you make more money, and you can buy more stuff, except stuff in a few particular but important categories. For example physical properties.
US median real wages, for reference: https://fred.stlouisfed.org/series/LES1252881600Q
If you want to refute the argument, you have to find a graph of wages normalized in terms of the cost of a starter home in areas with active economies. But I suspect that is going to be hard.
If you ignore CPI in favor of solely looking at who can afford to buy real estate in big cities ("areas with active economies") then yes, perhaps things have gotten worse, but I'm saying that's the wrong metric to be looking at.
I think I liked it better when the elites mainly conspired while playing mega golf - having that as the social attractor made for a naturally limiting effect on the imaginations of the people poised to do damage. If you would have gone to most coaches of distance-pissing teams (eg Gold Mansacks) in the 90's and asked for trillions of dollars to buy up all the RAM chips, you would have gotten answers on the order of "Kernel who?!". Now they're like "this guy looks like a serious nerd, we better not get left behind!"
I'd say the real upstream problem is the lack of new "thick" business creation. Which is a tough thing to analyze in terms of semiconductor fabs, as they are notoriously centralized-capital-intensive regardless. So I'm not looking to flesh out that argument in this context, but it does fit the anti-competitive less-efficient market pattern I've noticed across the board.
The main pressure relief valve on the horizon seems to be China building new fabs, but that kind of demonstrates how our own Western-aligned market has eaten itself.
This is in addition there are effects on the civics and reduction in welfare of people. Like many things in economics, inequality is a hard thing to do good experiments on but the data suggest that inequality itself has a host of effects that you're ignoring.
This article is a decent primer on the effect of inequality and what we know and don't know (and also some of the difficulties studying it): https://en.wikipedia.org/wiki/Effects_of_economic_inequality
Edit: there's a lot of literature on this. If you use Google scholar you can find tons of articles talking about the various effects of inequality (though as always with economics, the papers struggle to get good data). Modern economics definitely doesn't view it as an isolated and benign thing.
> the papers struggle to get good data
Note also that I'm specifically talking about inequality in isolation ("as long as it's caused by the rich getting richer and not by the poor getting poorer"), which I would argue is even harder to study.
It would be completely unsurprising to learn high inequality is correlated with higher rates of poverty, which is correlated with all sorts of other negative causes and effects. I don't know how you could control for that well enough to be able to convincingly claim that inequality itself is what's causing the problem and not the poverty (or the underlying causes thereof).
I would also acknowledge higher inequality certainly makes people envious, and that that probably has some negative societal effects. But I don't know I'd go so far as to count making someone envious as "materially harming" them even if there are other significant downstream effects to that.
I'll admit there's a lot more reading up I could do on this, but it would take a lot to convince me of the idea that making one group of people wealthier without hurting anyone else's finances is a net negative on society merely because it "increases inequality".
If the size of the pie is growing then it might be ok for the 'poor'. They get a smaller share of the bigger pie that is still bigger than what they had before.
However if the pie hasn't grown as fast as the inequality has grown, then their share has been on a continuous decline.
The US is not a high pie growth economy.
Rich getting richer can very much better a serious problem when the pie does not grow to keep up.
Many measure it in terms of money and not the sum total of goods and services that they can claim. Infact in lay person literature it is usually measured in terms money (+ liquid assets), at best inflation adjusted if they are comparing different times.
This why one needs to think in terms of the 'pie'.
> if the poor are getting less wealthy in absolute terms that's bad regardless of whether inequality is increasing or decreasing.
In complete agreement with that. I did not realise that my comment conveyed the opposite.
Say a typical cost of living is $50,000 per year. If you make $100,000 per year after tax, you can spend that extra $50,000 per year on political efforts - Lobbying, propaganda, political campaigns, soft power, hard power, land-grabs, etc.
If you have a billion dollars, you make about 30 million per year in returns. Cost of living is a rounding error.
Every billionaire is capable of outspending 600 six-figure software engineers, while sitting on their ass all day every day, or networking, or playing tennis. I think they realize this.
Do you think it is dangerous for a civilization when someone can dedicate all their waking hours to amassing power through any means possible, while they have more financial power than 600 middle-class people?
The growth is not dramatic, but steady over time:
https://institute.bankofamerica.com/content/dam/economic-ins...
https://wid.world/country/usa/
In American mice, perhaps.
More winners, but even more losers.
But hey, you only ever hear about the winners, so it's great for the image. America is doing great!
Yes, perhaps because they are now in the class below that?
On a time scale of centuries, sure. On a time scale of decades, absolutely not.
I thought I did well for myself, finding myself among the middle class, the end is on the horizon.
Yes, assuming they grew up in a household in the 70th percentile or above [0] income bracket and/or are on good terms with your parents and siblings.
At the end of the day, the family unit matters because intergenerational wealth has always been important.
> I thought I did well for myself, finding myself among the middle class, the end is on the horizon
Are you maxing out your Roth 401K (and if possible) your Roth IRA as well while also keeping fixed costs like rent or mortgage at around 40% of post 401K+IRA disbursement?
If so, you have a shot of climbing up into the upper middle class.
[0] - https://www.cbo.gov/publication/60807
Yes there always are.
To Downvoters: This statement is obvious. I'll tell you why then:
In 2008, most of you remember the 2008 crash Don't you? There were opportunities then.
We had the 2020 crash in the Covid era, there were opportunities as well back then.
There will obviously be another crash in this AI hype cycle and the moment the crash arrives, there will certainly be more opportunities from that.
I'll give you a massive head start: crypto, x402 / tempo, energy, and robotics.
Every company accounts for those things and takes a bite off the paychecks of their employees to cover those expenses.
In america a lot of companies offer those without being mandated and those that don't have to offer higher salaries to stay competitive. End result is that employees that want can user those higher salaries to pay for the vacations or take some time off. And those that don't get to keep the extra money, of course.
Near-trillionaires also clearly unrelated.
The inequality in Geneva or New York is MASSIVE. It's a problem. But it's absolutely pitiful compared to inequality in New Delhi or Havana. Plus it's what you keep hearing from ex-Soviets: that apparatchiks and normal people had the same money, but DIDN'T have access to the same stores. Guess which ones had stocked shelves?
The problem communism creates, ironically, is massive inequality.
There is no communism. It doesn't and never has existed. It's just an ideal that that corrupt and powerful leaders can espouse while truly being an oligarchy / authoritarianism. It's also great for capitalist oligarchs to point to as a bogey man.
The fact that everywhere it's been tried ends up as an oligarchy should make this obvious. Can you point to any real communism in the wild? Just like you can't point to a truly free market... They are just ideas, often touted / abused / blamed.