American Inequality in Six Charts

John Cassidy of The New Yorker pulls together six charts on income inequality and social mobility in the US in this post.

The third chart offers some international comparisons with reference made to Ireland’s high level of market income inequality and the impact the tax and transfer system has on disposable income inequality.

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23 thoughts on “American Inequality in Six Charts”

  1. Ireland’s high pre-transfer income inequality relative to the USA is endogenously determined by its much lower post-transfer income inequality. In the USA, poor people must work since the safety net is so limited. Comparing the pre-transfer Gini coefficients alone can be deceptive.

  2. Great piece one the few magazines i stockpile to read in print on vacations.The new think tank created a lot of ‘buzz’,Brad DeLong is now writing there and pretty much closed down his very popular blog.
    Lots of papers and research on The Great Gatsby Curve-referenced in the article.

    http://equitablegrowth.org/blog

    @Gregory Connor,’poor people must work’ and your point is…shurly all able bodied adults must work:)
    GC,,JPM settled assuming ALL WaMu liabilities,WSJ/FT,PTSB/NewBridge?
    That excellent tread of yours regarding eminent domain was read by lots of cities over here….
    http://www.nytimes.com/2013/11/16/business/more-cities-consider-eminent-domain-to-halt-foreclosures.html

    @Seafoid-oh that those crazy loony left wing agitators,i take it you have never been to Canton,Ohio…
    “The picture was distributed by Our Wal-Mart, a group which has repeatedly called on the retail giant to unionise its employees.”

  3. The third chart and Gregory Connor’s comment are very interesting; unfortunately this type of nuance tends not to make it into the public debate.

    The latest CBO report (data is from 2006) may be of interest here:

    http://www.cbo.gov/publication/44698

    Also, Mankiw’s paper on Defending the one percent, which featured briefly on a previous thread, provides food for thought.

    http://scholar.harvard.edu/files/mankiw/files/defending_the_one_percent.pdf

  4. @seafoid,wealth transfer is always complicated just ask your creditors….
    Some efforts attempts have been made,but a bit like Irl the power off vested interests,may have been underestimated.

    “Education is critical to economic mobility, and the President’s proposal for universal, high-quality pre-school would make sure that every child – regardless of their family background – can start school ready to learn. The President has also proposed to raise the minimum wage to $9.00 per hour and index it to inflation thereafter, which would help make it a little easier for working families to make ends meet. The Affordable Care Act will help create more economic opportunity by giving families the chance to purchase quality, affordable health insurance, ensuring that families cannot go bankrupt because of an unforeseen illness.”
    http://www.whitehouse.gov/blog/2013/05/28/great-gatsby-curve

  5. @ JG

    The wars of choice in Iraq and Afghanistan cost at least $4tn which would have gone a long way in skills retraining in Ohio.

    Wealth transfer is complicated but it’s not as bad as Dick Cheney.

  6. JG
    “what have the Germans ever done for us”

    In the end the USA is a fantastic country to visit, it’s people are open and interesting to talk to. It has saved European democracy twice in the last century at great personal cost to itself. It movies and literature are fantastic. The scenery is fantastic, the history is riveting. The politics are entertaining.

    Give me Boston over Berlin every time.

  7. @Tullmcadoo,New York is truly one if not the greatest cities in the world,the Hamptons are terrific in summer.Palm Beach for thanksgiving/xmas and Aspen for February…
    But even in this bubble,its simply impossible to ignore the inequalities in society,which have been getting worse lately.They are not as evident in these places but once you go outside that zone its very very clear.The current president has been made some efforts but is currently getting hammered on TV and in the polls over his efforts regarding healthcare.
    She who must be obeyed is a fluent german speaker,i worked and have done business with ‘german’ companies for many years so i’m not exactly impartial:)
    If its available over there this film has gotten rave reviews..yeah yeah he’s a communist and all that…..the trailer is too the ‘right’ on his web page.
    http://robertreich.org/
    http://inequalityforall.com/

  8. This may help with inequality…..
    http://www.finance.senate.gov/newsroom/chairman/release/?id=f946a9f3-d296-42ad-bae4-bcf451b34b14
    “Inversions, which occur when a U.S. company reincorporates abroad, have picked up lately as highly-taxed multinationals seek relief in low-tax jurisdictions like Ireland and the Netherlands. In a press release, Mr. Baucus said one of the goals of the proposed bill is to “reduce incentives for U.S.-based businesses to move abroad, whether by reincorporating abroad or merging with a foreign business.”
    Mr. Baucus has become a vocal critic of inversions, speaking out on them recently, after DealBook published an article documenting their increasing popularity.”
    http://dealbook.nytimes.com/2013/11/19/baucus-corporate-tax-proposal-takes-aim-at-merger-inversions/

    Additional reporting/coverage in WSJ,Forbes,etc.

  9. Poor people work here too, if there are jobs available. Many poor in the US are thrown into jail so the number of poor in employment is overstated. Ireland’s high level of putative market inequality is no doubt in large part due its weak trade union movement – largely government designed. State protection of professional services like the medical and legal professions plays a role, as corporate governance practices surely do too.

  10. A quick and fair solution to the Walmartisation and McDonaldisation of America would be to implement a living minimum wage at State and Federal level. Of course in America the public perception is that government is the problem so any solution is strangled before birth. All any business needs is a level playing field, without a minimum wage the pressure to improve bonuses by screwing the low wage workers causes widespread poverty. Add to that low priced imports from around the developing world which has decimated manufacturing. A country where there are more guns than people and no pickup truck in rural areas goes without a gunrack. Where has the land of the free and home of the brave gone to.

    If you are concerned about your safety visit Berlin. In America being on the wrong street at the wrong time can be a death sentence. I am talking 6:15 p.m. Mon to Fri in Minneapolis one of the “safer” US cities. God forbid you take a wrong turn even in a car in Detroit. Going around Chicago never, ever, ever take the inner highway because if you break down you do not have a prayer.

  11. Tull
    Great place to visit. To live?
    Travel there a fair bit. Increasingly I find the USA a humorless violent theocratic leaning gun nut ridden atomised society. It’s infrastructure is beginning to be in rag order and it’s people isolated and insular. They’re locked into a perpetual war against everyone and everything. It’s sad

  12. @Brian Lucey,yeah you probably right I should pack it in and go home then:)
    Is that job you were berating MH for not applying for still open,or maybe given the vast profits you claim to be single handed responsible for at Trinners,you could have a word…
    What on earth are you up to when you visit to get exposed to that sort of nonsense-guns,bad infrastructure,humorless people….stay out those neighborhoods I agree they not safe…..

  13. A humourless…nut ridden…society. Physical capital in rag order. Isolated and insular and locked into perpetual war. Are you talking about this site.

  14. For such a dreadful place, the allegedly badly governed USA has had a better recovery from the Great Recession than the pretend European Union.

  15. JG,
    If you think the Capitol is a den of sin, go to to Brussels to the European. parliament. Massive salaries, expenses & no influence over anything. Bit like the TCD common room.

  16. @Tull,they building a new one,looks like an interesting project,flogging some RE at the bottom of the cycle,interesting timing to spec. build retail in a secondary location,captive audience for the apartments.Perhaps,trinners can do away with its housing subsidy to staff,which I think has declined recently:)

    This is good news…
    “There are some surprises in this mirror. According to the OECD measures of a thing called the Gini coefficient, changes to taxes and transfers in successive Irish Budgets produced the biggest reduction in income inequality among OECD countries.”
    http://www.independent.ie/business/irish/brendan-keenan-level-of-public-spending-still-too-high-despite-cuts-29771873.html

  17. @Tull here the link-sweet..austerity my a…
    Given the land basis is free or close to zero,quite the advantage,hope this does not negatively impact say any NAMA holdings in the immediate area…

    “The overall development, spanning some 13,000 square metres with six storeys above ground and three below, will include a 600-seat auditorium, restaurant spaces for 200 people, public space where students can meet and ideas exchange, ‘smart’ classrooms with the latest digital technology, and a rooftop conference room.
    Trinity has raised significant funding towards the cost of the project from philanthropic sources, and plans to raise more, privately and publicly, are well advanced. Other revenue sources include self-generated income from fee-paying business programmes, income from the sale of off-campus office space and the leasing of retail units and student apartments.”

    http://www.tcd.ie/Communications/news/pressreleases/pressRelease.php?headerID=3340&pressReleaseArchive=2014

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