Supposing this is true, does it matter, if the overall size of the pie increases? Isn't everyone better off? Would you rather the poor stay poor so that the rich don't get richer?
I think all you have to do is look at modern American income disparity in the United States over the last 50 or so years and you have your answer. Sure, the poorest did become moderately better off financially in terms of wages. Yet did there quality of life increase? I would argue that the size of the pie is irrelevant past the point of what is required for basic survival. What truely matters is the relative size of the pieces. Especially in a country where we have equated money with speech.
The income disparity is the game of numbers. When Jeff Bezos’ income increases due to the work of his US employees, people notice. When Saudi Arabian King’s net worth increases due to the work of his US employees (and employees of any affiliated companies controlled by Saudis), people don’t notice it as much, since the King does not file a personal tax return with IRS.
If you were to strip everybody in the Forbes 1000 list of their US citizenship (someone like Singapore or Monaco would surely step up to provide them with a valid passport), relieve them of IRS personal income filing duty, but allow their money to stay in the US economy, the economy would look the same and act the same. But the income disparity numbers would look much brighter.
You rightly point out that income disparity metrics can be manipulated, but changing the calculation (eg by ignoring Bezos) does nothing to change the actual disparity, it just makes it harder to detect... So what exactly is your point?
That the stat is not only subject to manipulation, it’s pointless.
If every American shopped on Rakuten vs Amazon, bought Samsung vs Apple, searched on Yandex instead of Google, banked at Barclays vs Chase, took a Didi vs Uber, if every hedge fund manager was based in Zurich vs Greenwich, US income disparity would not be so jarring, as the wealth would accrue elsewhere, exporting the income disparity with it.
You seriously think poor people's quality of life hasn't increased in the last 50 years?
Go drive around "working poor" neighborhoods right after Christmas and see how many huge flat-screen TV boxes are curbside waiting for "big trash day" (small hint: a lot) or see how many people don't have smartphones.
I would argue that Wallyworld did more to bring up the standard of living for poor people than the last 50 years of social engineering but I know how much people like the downmod button...
The cost of huge flat-screen TVs has plummeted. Meanwhile, the cost of housing and healthcare is going through the roof in most of the western world. It very much does not follow that people who have the disposable income to purchase techno-toys can support their basic needs.
The cost of most things has plummeted since 50 years ago which, arguably, improves people's lives.
And, btw, I wasn't proposing some new measure of Quality of Life through the size of the living room TV but using it as an illustrative example of technology becoming more accessible to more people at lower costs. Same with the smartphone reference, having the sum total of human knowledge at your fingertips seems like a quick and easy way to improve one's lot in life.
I do wonder if people would complain if Walmart managed to decrease housing and healthcare costs using their aggressive bargaining tactics like they've done with generic prescription drugs?
cost of housing proportional to wages, cost of healthcare proportional to wages, access to education and the quality of that education, overall life expectancy, likelyhood of incarceration, etc.
>Go drive around "working poor" neighborhoods right after Christmas and see how many huge flat-screen TV boxes are curbside waiting for "big trash day" (small hint: a lot) or see how many people don't have smartphones.
Perhaps the hedonistic acquisition of inessential physical goods is not necessarily commensurate with a higher standard of living?
While there has been progress in the past 50 years, there has certainly also been much regress. When measuring the advancement of a civilization, it seems something other than the pervasiveness of bigger, cheaper screens for reruns of Baywatch (et al.) should be the yardstick.
> Wallyworld did more to bring up the standard of living
The quality of food Walmart sells is abysmal. The pressure Walmart put on food manufactures to drop prices played a significant role in the malnutrition and obesity in the us. TVs and smart phones are a very small part of Quality of Life. Having fulfilling work, good health, and a clean environment are more important aspects that Walmart worsen.
> The pressure Walmart put on food manufactures to drop prices played a significant role in the malnutrition and obesity in the us.
Making food less expensive is bad? Never really understood that argument but maybe it's just me...
There are studies on the percentage of income a family spends on food today vs. some time in the past (with "time" depending on whatever study you look at) and it has steadily declined. Less money spent on food == more money to spend on some other necessary thing to live a quality life.
Also, I'd put more blame on the USDA[0] for "obesity in the us" than Wallyworld selling people what they want to buy. People grow up believing in the Food Pyramid and end up becoming overweight through a "well balanced diet" dreamed up through regulatory capture.
So many people miss this point. Most things in economics are positive sum games. But most people treat things like zero sum games (if someone gains something then I have less/am able to get less). But people produce products, people produce value. This is exactly why we have an economy. And it grows (meaning positive sum). We've left so much money and value on the table because of this.
I'd be careful making assumptions about the reasons people don't agree with you.
Taking the grandparent comment: "Supposing this is true, does it matter, if the overall size of the pie increases? Isn't everyone better off? Would you rather the poor stay poor so that the rich don't get richer?"
I don't disagree with this point because I believe economics is a zero some game, I disagree with it because it's wrong (it takes "everyone being better off" for granted), and I will be on guard to oppose any other initiatives (say, open borders) suggested by a group that thinks like this.
There's a very good SMBC comic that addresses the "greater pie" fallacy. [1] To summarize: the total economic pie growing and individual slices shrinking are not mutually exclusive.
Even with a larger pie, the people with an ever diminishing share have less control over their lives, more stress, and more uncertainty. There is too great a power disparity arising as a result of inequality.