Originally posted by: CADsortaGUY
Originally posted by: Rainsford
Originally posted by: CADsortaGUY
Anyone have any answers to the questions in the OP?
I answered the question, which I think you're ignoring because you're looking for some hard and fast number. Except it's not the number itself that is the problem, rather it's the effects that come from a certain measure of concentration of wealth.
So I'll say it again in fewer words. Concentration of wealth becomes bad when the average person starts becoming poorer in terms of real income. We've clearly reached that stage, as the average middle-class salary is not as useful to the average family as it was 30 years ago.
Nope, it doesn't have to be a number but it has to be defined. Define the "effects" that tip it.
what is "average"? what is "poorer"? relative to what? Why 30 years? Is that the standard?
When I say "average", what I'm talking about is the median income of individuals in this country (we'll go with individuals over 18 because teenagers don't buy the same things as adults). That is, if you arranged every worker in the country by income, the "average" worker would be the worker with about 50% of people making MORE than him, and about 50% making LESS than him...he's in the 50% percentile in terms of income. I don't use "mean" income (total income of all workers divided by number of workers) because I'm really talking about the income of the average person, not the average income, since we're talking about PEOPLE here. 10 steelworkers and Bill Gates have a pretty high MEAN income, but that doesn't really tell me very much about how much an individual chosen at random from the group is likely to be making.
So we've established that "average" means middle of the road, middle-class, if you will. When I mean they get poorer, what I really mean is that "median" and "mean" income move farther apart, that the worker in the 50% percentile of incomes makes far less than the MEAN income for all the workers in the country. Going back to my 10 steelworkers and Bill Gates, the mean income is far more than any of the individual steelworkers make. As more people at the top of the economic ladder have a greater percentage of total wealth, the mean income goes up while the median income stays the same. In other words, if all the income was equally distributed among all the workers, your workers in the 50% percentile middle-class would end up with a much greater income than they have now.
Why is this "poorer"? Well the problem is that a lot of economic factors in determining your relative wealth come from the mean income rather than the median income. This tends not to apply to things that are economic class specific (yacht prices are of little concern to the middle class, and Bill Gates isn't going to affect the price of discount ground beef), but the overall system is built on the average price that can be paid for something (ie, mean income), NOT the price the average person can pay for something (ie, median income). I'm not talking so much about the price for individual products so much as I'm talking about the general cost of living. As the mean income moves up from the median income, you become "poorer" relative to your socio-economic position from before because it costs more to maintain your spot on the socio-economic ladder. As for how I define "before", 30 years is pretty arbitrary, but it's good because it's long enough ago that there has been a noticeable shift in mean income over that time. A 50% percentile salary in 1977 got you "more", relative to the mean position on the socio-economic ladder, than a 50% percentile salary in 2007 would get you.
Obviously there will always be some amount of this, as only a perfect income curve would join median and mean, but getting as close to that point as possible is ideal, and the farther away we move, the worse we are. It's not a single point where one side is "good" and the other is "bad", it's a continuum of decreasing utility of the 50th percentile salary, the farther we go, the worse things get.
