Sorry that the facts are too complex for you. That article is hardly "as complicated as possible". Its rather simple assuming you understand normal economic ideas and terms.
"Quitile" is a pretty simple concept. If your measuring personal income, people with the top 20% of income are the highest group, people in the top 40% but not in the top 20% are the 2nd quintile, and so forth. The 2nd lowest quintile consists of people in the bottom 40% but not in the bottom 20%. Or to put it another way list people by income, then cut the list in to 5 equal sections. Each section is a quintile.
No one is talking about the rest of the world......the comparisons that have been made are with groups within the US.
Exactly no one is talking about the rest of the world. The article doesn't compare the wealth of American's to the rest of the world, it compares the wealth of different quintiles of Americans over time. Ranting against comparisons with the rest of the world is rather irrelevant.
Tim, when you find a right leaning economist who speaks clearly, uses simple language and doesn't create a rat's maze of an explanation while actually dealing with the issue at hand let me know.
Just follow the link you quoted. For quotes from such an economist.
tcsdaily.com
Or you could follow most of the other links I've posted here.
In case you don't wan't to bother folling the links I'll quote two specific arguments from that last link.
"...In a 2004 article in Nation, Paul Krugman wrote:
"According to estimates by the economists Thomas Piketty and Emmanuel Saez—confirmed by data from the Congressional Budget Office—between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent." (Reynolds, p. 38)
But Reynolds shows that Krugman's statement is wrong for two reasons. First, CBO estimates go back only to 1979. Second, the CBO data show that between 1979 and 2000, average after-tax income in each quintile (fifth) of the household income distribution rose. For the lowest quintile, it rose from $13,500 to $14,600 [all numbers in this sentence are in 2003 dollars]; for the second-lowest quintile, it rose from $27,300 to $30,900; for the middle quintile, it rose from $38,900 to $44,800; for the second-highest quintile, it rose from $50,900 to $63,600; and for the top quintile, it rose from $89,700 to $138,500. So for Krugman's claim (CBO reference aside) to hold true, average income in the bottom 90 percent would have had to have fallen drastically between 1973 and 1979, to more than offset the later increase. Reynolds uses U.S. Census data to show that no such thing happened."
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"How about the "vanishing middle class?" To say that the middle class is vanishing, one must have a definition of the middle class. A sensible person would probably define it as the group of people in the middle, say the middle quintile or the middle three quintiles. But that's not how the commentators who have made the claim have defined the middle class. Instead, they take the group of people making income within a fixed range in inflation-adjusted dollars, say, between $35,000 and $50,000, and show that the percent of the overall number of families within this range is falling. In commenting on this way of defining the middle, Reynolds points out an obvious but, nevertheless, often completely overlooked fact:
"Such a fixed definition ensures that the proportion of households in the middle group must decline with a rise in general prosperity, because rising prosperity causes a rising percentage of families to earn more than $50,000." (emphasis his)
Reynolds continues by telling of a 2004 story in the Washington Post titled, "The Vanishing Middle-Class Job." The Post article pointed out that in 1967, nearly a quarter (22.3 percent) of households made between $35,000 and $49,999 in inflation-adjusted terms, but that that share was down to 15 percent by 2003. Reynolds notes that the same article showed that the percentage of U.S. households with a real income higher than $50,000 rose from 24.9 percent in 1967 to 44.1 percent in 2003. Moreover, the percentage with income lower than $35,000 fell from 52.8 percent to 40.9 percent. In other words, the "middle class" was shrinking because people were moving out of the Post's statically defined middle class into a higher income class. Comments Reynolds: "The article could have been more aptly titled, 'The Vanishing Lower-Class Job.'" But because Reynolds shows elsewhere that higher-income households tend to have more than one worker, one can't simply equate households and jobs. Therefore, the article would have been even more aptly titled, "America's Families are Getting Wealthier." But that's not exactly the message or the tone the Post was shooting for." |
