Distribute
1: to divide among several or many
Earn
1: to receive as return for effort and especially for work done or services rendered
Which definition do you think best applies to your money? "Earn" probably looks pretty accurate. The definition of "distribute" seems to fit better with a socialist or communist society (or, as you will see later, the bottom 40% of America). Let's dive into some facts and figures to illustrate the situation. The Heritage Foundation has an excellent study on income inequality (it's a bit old, but we would see the same trends today). Notice how I did not use the phrase "distribution of wealth." That's because A. Wealth is not distributed; it is earned and B. When politicians talk about "unequal distribution of wealth" they are really talking about income. They are talking about how much people earn. You won't hear politicians use that word though, because to earn something requires "effort and.... work" (remember the definition above?). You will soon see that the government clearly does not value people who work to earn.
The graph below shows the distribution of income within the U.S. You see three columns, because The Heritage Foundation had to correct the data from the original census report so that it accurately reflects the situation. The census had some serious errors. To summarize the errors, the census data does not account for the effects of taxation, and the census data also did not divide the population equally into five quintiles. According to the census, the top "qunitile" contains 24.3% of the population (your tax dollars paid the person who came up with that, by the way). 24.3% is more like a quartile. The Heritage Foundation fixed it though.
Notice the trend of income dropping in the top quintile once it is corrected for taxation and benefits. On the flip side, notice income rising dramatically, by 55%, in the bottom quintile after taxes (in this case "taxes" means "distribution"). This can only mean that people in the bottom quintile are getting quite a bit of money distributed to them from the government while people in the top quintile are getting money taken from them by the very same government. Things get much more interesting when you look at the differences between each group in terms of hours worked.
The top quintile contains 22.2% of working age adults, but they account for 25.6% of total hours worked. When you look at the bottom quintile, however, these people make up 18.5% of the working population, but only account for 13.1% of the work in the country. Translation.... the top quintile works way more than the bottom quintile. Assuming that each group should account for a number of hours worked equal to their population (ex. top quintile makes up 22.2% of working population so they should also account for 22.2% of total hours worked), when you cross reference the data (gotta use this graph for hours worked) you can extrapolate the following facts: The people who work 17% more see their (earned) incomes drop after the government takes a share of their income and wealth. Ironically, the people who work 51% less see their incomes rise by fifty six percent, courtesy of our government's policy of seizure and distribution.
After looking at this data I have to say I agree 100% that the distribution of income is unequal in the United States. It's incredibly unequal when you consider that the people who work more get more of their income seized from them by the government while the people who work over 50% less get over 50% more distributed to them from the government. This might be one of the few cases of government officials telling the truth. Income and wealth distribution (redistribution) really is outrageously unequal in America.
23 comments:
I am very impressed by the way this data and subject matter is layed out. Now if we can only get the general population to look at our country this way.
Dear Mr. Government -- please adhere to a simple principle. You reap what you sow.
Great info, Patrick! BTW, love the new look of your blog.
Top 400 income earners paid 18.5% after loopholes. Also low wage earners have lost retirement, health benifits in addition to making 10,000 less income, after being adjusted since 1973, while the top wage earners has exploded. Remember, the top fed tax in 1980 was 70%, now its 36%. Trickle down economics has not trickled down. 30,000 a year is not a living wage for a family of two, much less with children. 800.00 for rent,150.00 for power,50.00 for TV, 225.00 for one used car, car insurance 100.00, food 300.00, phone 50.00, and still no health care.
Greg
Since 2000, productivity of the american worker has risen 18%, while income has not kept up with inflation.
USA- no country for poor people.
I think you confuse income with wealth,Patrick.
Income is what you earn, wealth is the accumulation of what you have,after deduction of taxes. I for one think you should read other sources on this subject.
It is a fact that the top 5 percent own 38 percent of wealth in the US. The top 20 percent own 80 percent of all wealth. If that is not an income inequality, I don't know what is.
Before people start accusing me of being a democrat or a socialist, I must admit that i'm
European. We had banks and businesses failing over here as well, but we didn't bail them out.
Nationalising banks is like welfare for the rich,
for the poor americans however, little remains...
This is an interesting analysis, but it completely fails to account for all the differences between the top quintile and bottom quintile -- as if they were identical in all respects except for how much they earn and how many hours they work. People are not in the bottom quintile just because they are lazy and don't want to earn money. A lot of the people there are homeless, mentally ill, disabled, or come from very difficult circumstances. Some of them are able to rise from their situations and succeed, many are not. I think this needs to be considered, too. We do not "earn" the parents, social environments, and economic situations that we are born into. Yet these circumstances play a great role in determining what kind of income we will be able to earn later in life.
These graphs do not account for the disparity in education. Graph out the level of education for these groups and you may discover that those who stay in school and earn college and post college degrees make substanially more than high school drop outs. In the past,there were still employment opportunities for high school dropouts, but now, most of those jobs have gone overseas. Our highschool drop out rate is near 50% in some areas. There are opportunities for people at all levels to get funding for college or through the military. The problem with redistribution is that it doesn't work. Mutliple generations of the same families are still tied to welfare. Only through education will people be able to break the bondage and dependence of low wages and the cycle of despair attained through welfare. I have never heard of someone on welfare creating a thriving business and hiring people - only those with disposable income. Where is the personal responsibility? A lot of people are at the bottom quintile because they made poor decisions while in their teen years - either dropping out of school, having babies, perpetrating crime, or becoming addicted. Should that behavior be rewarded? Though they ccould not choose parents or social status, there are still free educational opportunities available to enable all to rise above their current situation. There is plenty of govt money available for people to get grants and scholarships for college.
Amazing....
There are so few people here who can post one thing coherent. I like how the article babies you though issues to make the writer seem like a teacher. It's a good tactic to make people afraid to disagree with you. Good job.
That doesn't change the fact that it's all retarded. Societies are, at their most basic level, a wealth re-distribution system. Realistically, all those top quintile people should be at the bottom and farmers should be at the top. They are the ones doing work which actually enables you to survive.
Other jobs serve basically as a redistribution system which makes you feel good about what you get.
And the anonymous post from 4:32 on Aug. 2 is basically un-followable. Reward their poor choices? Is that how you see it? How about not punishing someone to a slow death for mistakes they made when they were 15? That doesn't sound fair to me. Because the course you are set on in your younger years is hard to break. How often do you say "that's how I was raised?" most people I know say it rather frequently. America is devolving more and more into having casts. Where it is impossible to change your social standing. Education is more and more inaccessable to the poor. I'm "middle class" and I can barely pay for college. I know "low class" people who have to work about 60 hours a week to stay alive and thanks to the abominable health care available, will die of poor dental health.
Health care remains inaccessable to nearly everyone. Which is the biggest issue, now, really.
I could go on for hours. Most of what I get out of reading this crap is that you people havn't ever gone hungry, haven't ever associated with someone who has, and didn't pay any attention in a sociology class. Or Anthropology. Walk a mile in someone else's shoes you elitist bastards.
Sorry I sound so angry, but I am.
Really, the best excuse for taxing the wealthy to give to the poor boils down to this: The rich can afford it. What are they gonna do with all that money anyway? All that limbo money which really doesn't mean anything as it is based on nothing. The poor can barely survive. Why are you whining about it so much. There is no excuse for you to have a 90 hectacter home. There's also no excuse to let Joe the Plumber die of a broken leg because he couldn't get to Canada in time.
Here's something cool:
http://www.lcurve.org/
Then go here:
http://www.lcurve.org/millbill.htm
I'm months late to the party on this one, but I have to add that the MAJOR flaw in the conservative presumption about the rich is that they all EARNED their money. How about Paris Hilton? Yeah, she's worthy of all of that dough, isn't she? If everyone did like Buffet and donated it all away - forcing their successors to actually EARN their own way - I'd have virtually no problem with conservativism. My main LOGICAL difficulty with is that the MAJORITY of uber wealthy folks HAVE NEVER WORKED a day in their lives. What's more, the same irresponsible, immoral behavior - having a baby out of wedlock for example (see Nicole Richie, etc.) - that dooms the bottom quintile to perpetual economic despair is nothing more than a blip on the radar screen for the rich.
True liberty is measured by "wealth"- (your assets), not by what you earn. The Wealth distribution in this country is wholly unnatural (it is not based on a normal distribution). This creates a situation where almost half of the population essentially has no freedom (regardless of any income statistics). This type of situation is very dangerous for this nation and places us on the cusp of recognized tyranny (it is already tyrannical) and then into a massive revolution. You are young, idealistic and very naive.
The Heritage Foundation?? the very bias of the source you choose invalidated anything you had to say.
-Brian-
This article completely fails to grasp what is meant by the comment "the wealth distribution in America is un-equal". Income does not directly equal wealth, in fact it is often only a small percentage. Sure a Lawyer making $400k annually does deserve to make more than a waitress who also works 40hrs a week and is going to community college, but should they pay the same % = no. What is really meant by the original observation is that WEALTH IS PASSED ON from generation to generation, and withouth taxes we can not give everyone equal opportunity to become part of the economy at their fullest potential. A real fix to the distribution of wealth would be to close ALL the loop holes in the inheritence tax and use the cash for public good, because we all owe society and it is time that we pay our due instead of being so selfish.
- Taxpaying patriot and Veteran.
Why does everyone get "income" mixed up with "wealth?" If you do a Google search for distribution of wealth, you are likely to find distribution of income instead--two different things entirely. So wonder this country can't figure its way out of this mess--it's just emotional arguments and promises one way or another.
If you have 9.8% unemployment this means at least double that number are suffering due to most unemployed having at least one dependant.
On top of this there are at least another 10% on very low pay rates.This indicates that the modern capitalist/mixed economy is incapable of delivering prosperity to at least 30 % of the people.This has implications for crime ,mental illness,suicide etc.Why isn't it considered unpatriotic or unchristian to move production offshore? Globalization forces the poor people on the planet to compete with each other & perpetuates poverty & subservience.
You should change the name of this blog. It's false advertising.
The reason we say "distribution" of the wealth is because collective effort has made America so wealthy. Would you prefer that your sugeon took turns with nurses cleaning toilets? Janitors don't get paid because they deserve an income or because employers are altruistic, janitorial services are necessary. Obviously, necessary, but clearly deemed unworthy by many. How many hours would be necessary for a surgeon to earn the same income if they had to mop, run the caffeteria, billing work, paramedic work, security, public relations, chaplin services, phlebotomy services, xray, parking control, psychiatric services, secretarial duties, medical equipment manufacture, pharmaceutical manufacture and development blah, blah on and on. Not to mention the people that build their cars and homes, people that manufacture the paint, windows, carpet, gasoline and utilities for those homes and cars. The truckdrivers and gas station attendants that make a refineries gasoline available to those poor surgeons. The hospitality employees that make it possible for surgeons to take vacations and have a place to sleep and eat. Fortunately, we have a lot of stupid, lazy people willing to do these things, freeing time for all you hard working, smart people. Self-sufficiency leads to poverty. Division of labor allows the United States to be one of the wealthiest nations on the planet. I don't think adequate food, healthcare and housing are too much to ask for. If America isn't willing to accommodate a wage that would allow laborers to attain these things on their own through premium prices and reduced profitability, then someone will. What would you do if for whatever reason, these necessities were not available to you? Supply and demand, and inflation ensure that "hard work" will not suffice as a remedy for poverty. As the number of employees holding masters degrees increases, earning potential decreases. It would be foolish to pay one person more when ten others are willing to work for less. Some people just are not intelligent enough to do anything more than what they do. Notice I said SOME, not all. Is it really o.k. to use them for cheap labor, in turn allowing affordable goods and services, then pay a wage that doesn't allow full financial independence? The 2% tax that has been suggested for funding healthcare reform amounts to $111 per month for someone making $67,000 per year. ($67,000 is the top income in the lowest tax bracket) Not to judge how people spend their money, but is keeping that 2% worth denying so many people healthcare? It's not just poor people. I have known 2 people with excellent insurance, cancer, and financially devastating medical bills. I would like to define parasite: a person who receives support, advantage, or the like, from another or others without giving any useful or proper return, as one who lives on the hospitality of others. Considering the abundance of wealth in America, Is a wage that doesn't allow self support "useful or proper return"?
The purpose of a city, originally, was mutual cooperation to spread the risk of failure, thereby raising the standard of living for all. A primary impelement of this social ordering is the division of labor, as the last poster remarks. All of our contributions are important, and ultimately vital.
I guess what I don't get is this hands accrossed America for the downtrodden billionaire attitude. I mean, billionaires have been discriminated against for too long right? Forced to drive Ferraris and eat filet mignon, wear Armani and live in mansions. How dare we exile them to such comfort when the misery of the working man is so aptly shared among the rest of us?
I doubt very much that anyone is saying that a lawyer and a waitress should earn the same money. What is being said is that both have a right to live a comfortable life, but today one lives a very comfortable life while the other barely exists. Its garbage. Pure and simple. There is no just cause for a gap as large as we have today. NO ONE is worth 20 times as much as another, much less 100 or 1000. But I'm glad at 26 years old you can adequately judge who is worth more then who.
These people are not making money by improving society anymore Patrick. In fact its often the other way around. Take First Energy. Days before announcing a large layoff, they announced a record breaking 1.34 billion dollar profit on revenue of 13.6B. Thats a nice 10% profit margin. My guess is the guys at the top wanted to keep that money coming, so rather than serve the interest of society and keep employing well compensated employees, they used the fear and uncertainty of a recession to justify layoffs and get richer. Where did they add value? How did they 'earn' money? Are you seriously telling me that the waitress at you favorite restuarant couldn't have come up with "well if you fire some people, we can make more"? Come on Patrick. Really.
If the tax system capped off income, there would have been no incentive for First Energy to make those layoffs, and the recession would be a tiny bit softer. In fact, many companies that were making a good profit, like Verizon and At&t probably wouldn't have had much incentive to fire people while still profitable.
These wealthy people don't earn their income Patrick. They have enough wealth to guarantee it. There is a big and fundamental difference.
Why not compare the working hours of the top 1 percent to the bottom 1 percent? Oh yeah, the top 1 percent DON'T usually work or at least don't have to. It comes down to democracy, which requires a thriving middle class according to Thomas Paine. Sure lets get rid of income redistribution...ever play the game monopoly? In the end one guy owns all the property, has all the power, and can simply buy his way out of any situation or politician for that matter. Go ahead and take the rich's side Patrick, I am sure you would make a nice indentured servant to them. By the way, increased taxes places NO limit the amount of money you can make.
You can look at Chile, where Freidman free market economics has created great economic growth, however 80 percent of the population are now low middle to poor class. At least it has done wonders for the rich.
I see a lot of opinion here. I would like to see combination of best thought out plans for how working class the majority because of the number of us have more power only Only if we join together without violence but planing. We need to start doing not just talking.
Very cute! But in spite of this inequity you have to agree that the rich actually have it better now than when they owned slaves. Slaves paid no taxes and had free room and board while the wealthy had to earn everything they owned and still burden all the cost of government... well, I'm sure you can put some numbers together to prove that.
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