Thursday, March 05, 2015

Income inequality and the myth of the 1% and the 99% - Fortune

This article highlights some interesting statistics about economic mobility in the U.S. And posits that the dynamics in income growth are part of the reason Americans are not taking to the streets en masse to protest income inequality.

Another significant factor is 'real' wealth. Think, how do you value the 'real' assets that the masses control in 2015: Google, Wikipedia, Facebook, Twitter,Instagram,Netflix, Skype,podcasts, iTunes (you can now pay $1.99 for and buy just the songs you want vs. $10-$20 for a whole album for only a couple songs you like), hand sanitizer, RedBox, smartphones,TomTom/Garmin/GPS, DVRs, iBooks, vegetables that come in zip locked re sealable bags, gift cards( have you seen those huge end caps with hundreds of pre-loaded gift cards), corn and potatoes that are resistant to pests and require fewer pesticides and have lower levels of carcinogenic molds etc...if you keep thinking you could add to the list of numerous items, gadgets, apps,and innovations (wait until we start to see the benefits of the convergence of the internet of things, biotechnology, 3d printing and nano-technology) that each make a contribution to the aggregate real wealth of the masses across quite a broad spectrum of incomes. Instead of being too 'poor' to take to the streets, I think there is a sizable portion of the population for which this kind of growth in real wealth creation either poses a huge opportunity cost associated with political engagement, or on the other hand compensates for lower levels of growth in nominal incomes (which otherwise might elicit stronger reactions). On the other hand, if it were the case that most of the 'real' wealth in society could be quantified (which I don't know how you could actually measure a person's real wealth when it is comprised of so many things contributing to their overall well being in so many ways, not to mention start comparing by groups) , and it were concentrated or 'controlled' by just a few, then we might also get a different reaction. Not to say that there aren't societal ills and challenges faced by people of various means, but it looks to me like it would make more sense to tackle real issues faced by real people than be sidetracked by policies or debates around less meaningful statistical abstractions about income inequality.

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