February 10th, 2013

Fun with statistics

Revisiting income inequality.

I say “revisiting” because of this earlier post of mine on the subject.

14 Responses to “Fun with statistics”

  1. M J R Says:

    Warning, to those expending litle more than a cursory glance at neo’s link. Please take note of these three Megan McArdle paragraphs, a little ways down in the piece:

    BEGIN PASTE

    Er, no. Look closely at those last two brackets. Now look at the brackets immediately to the right of them? What do you notice?

    Probably, you notice the same thing that immediately struck me: the last two brackets cover a much, much wider income band than the rest of the brackets on the graph.

    Each bar on that graph represents a $5,000 income band: Under $5,000, $5000 to $9,999, and so forth. Except for the last two. The penultimate band is $200,000 to $250,000, which is ten times as wide as the previous band. And the last bar represents all incomes over $250,000–a group that runs from some law associate who pulled down $251,000 last year, through A-Rod’s $27 million annual salary, all the way to some Silicon Valley superstar who just cashed out the company for a one time windfall of hundreds of millions of dollars. Unsurprisingly, much wider bands have more people in them than they would if you kept on extrapolating out in $5,000 increments.

    END PASTE

    Creative renderings of graphs have long been a favored way of demonstrating that “figures don’t lie, but liars figure.” Beware the small print — and thanks to Ms. McArdle for pointing it out.

    ‘Nuff said . . .

  2. Ed Bonderenka Says:

    A university committee was selecting a new dean. They had narrowed the candidates down to a mathematician, an economist and a lawyer.

    Each was asked this question during their interview: “How much is two plus two?”

    The mathematician answered immediately, “Four.”

    The economist thought for several minutes and finally answered, “Four, plus or minus one.”

    Finally the lawyer stood up, peered around the room and motioned silently for the committee members to gather close to him. In a hushed, conspiratorial tone, he replied, “How much do you want it to be?”

  3. thomass Says:

    Another point Thomas Sowell always makes are the groups are not static.

    I had a year where I made 14K. I don’t always only make 14K. I left that bar on the graph and someone else took my place. Hopefully only for a year or two.

    Ditto the ‘rich’. The same people do not always make mega bucks year after year.

    It really changes the meaning of these graphs when considered.

  4. holmes Says:

    As the comments point out, it’s a Pareto curve. It has been for centuries and will continue to be for many more. the Left is dedicated to creating a normal curve from this, at least that’s ostensibly their aim, for reasons completely unknown. It will be a a better society when there are more people in the middle? Fairness? And what of standard of living in all of this? I’m sure Somalia has a very flat curve with a small Gini coefficient.

  5. Geoffrey Britain Says:

    No, the shrinking middle class is a serious problem. Why is it that in the 1950′s one bread winner could provide for a family of four but now two struggle to do so? Why the middle class is shrinking is of the greatest importance because a society that closely follows the Pareto 80/20 rule is inherently an unstable society.

    The left in its knee jerk rejection of economics and reality clings to its discredited belief that its all the fault of the greedy rich. We’re all familiar wth the reasons why socialism/communism are defunct philosophies but Churchill once again may have described it most succinctly, “Socialism is a philosophy of failure, a creed of ignorance, and a gospel of envy. Its only inherent virtue, the equal sharing of misery.”

    So why is the middle class shrinking?

    A plenitude of factors; since the 1930′s, an America buffeted by successive waves of inflation and deflation greatly reducing the purchasing power of the dollar, brought about by adoption of a fiat money system.

    Over regulation of businesses coupled with world competition for manufacturing, driving increasing numbers of US manufacturing overseas, in a desperate attempt to remain competitive.

    The entitlement state long since having expanded past its sustainability and a culture which has replaced saving and delayed gratification with the instant gratification that credit and debt temporarily provide.

    All of these factors reinforce each other, amplifying their effects upon each other.

    The factors do not pop into existence out of a vacuum.

    They are progressive stages in great civilization’s life cycles: English historian Edward Gibbon, in his “The History of the Decline and Fall of the Roman Empire” identified the following five attributes that marked Rome at its end:
    1) first, a mounting love of show and luxury (that is, the worship of affluence);
    2) second, a widening gap between the very rich and the very poor
    3) third, an obsession with sex;
    4) fourth, freakishness in the arts, masquerading as originality, & mere enthusiasms presented as creativity;
    5) fifth, an increased desire to live off the state.

    The left has greatly accelerated these trends and encourages them in a strategy of internal sabotage of American society.

  6. waltj Says:

    Geoffrey B, as you’re probably well-aware, the 1950s through the mid-1960s were kind of an economic “sweet spot” for America, in that it was possible for a low-skilled factory worker to climb into the comfortable middle class without advanced education or extensive technical training (i.e., skilled trades). My high-school-graduate father did exactly this, making good money by working at one of the Big Three auto makers in a job that he simply showed up for one day. He retired before the high-quality, low-priced, fuel-efficient Japanese imports hit our shores in a big way and rendered obsolete the auto industry’s business model. The companies, and the unions, couldn’t adjust quickly enough as Toyota and Honda ate their lunch. As with cars, so with other industries. There’s about as much chance for us to return to economy of the 1950s as there is for a 1974 Pinto to win Daytona.

  7. Geoffrey Britain Says:

    Born in 1948 I’m familiar with that time period. Not to diminish that sweet spot, but it was not just the manufacturing factor that created the low cost of living index of the time. Fuel was incredibly cheap until the OPEC’s arab oil embargo artificially raised world oil prices. Permanently affecting not just transportation, but food production, energy production and manufacturing costs, especially in plastics, a skyrocketing industry from the very early 60′s onward.

    The Japanese imports were initially of very poor quality and only had fuel economy to recommend them. Unlike the Big Three whose quality declined, the imports continually raised their quality and the Big Three never attempted to pay more than lip service to fuel economy. Like generals fighting the last war, they continued to insist that all Americans wanted big cars. The triumph of imports had as much to do with incompetent intransigence by the Big Three as it did with fierce competition.

    We certainly can’t return to the 50′s but in less than another generation, robotic manufacturing will both eliminate the current Chinese labor advantages and also return manufacturing to the region where consumption occurs. The Chinese are living on borrowed time.

  8. holmes Says:

    Well, the point of the article above is the contention that the middle class is not shrinking. And the glory of the 50′s, 60′s, is a little overplayed and mostly based on people’s anecdotes. We weren’t that wealthy a society. There was a lot of growth and thus more movement into the middle class, but that’s because the rest of the world was devastated. Still, % growth does not equal wealth/standard of living. It shows growth. There were a few industries in particular that benefited from protective trade policies, like steel and the auto industry, and Unions did help obtain above market benefits for a time. But if you look at wages as a % of GDP, they don’t actually change much over time. What changes or what has changed is what people can buy with the same benchmarked dollar.

  9. Richard Aubrey Says:

    WRT income distribution: Most reputable work is done with a cap. A-Rod’s income may pull up an average, but the average guy isn’t participating in the inflated number.
    I believe the Labor Department, where most of these figures originate, has a cap of $600,000, everything above being considered an outlier and not representing trends which are useful except in dicussions of why some jock or rapper gets so much more than a teacher.
    Not so long ago, the max was $300,000. When it was raised, the usual suspects claimed the rich were getting richer, when all it meant was that we were considering more of the rich when before we had not.
    WRT the sweet spot. Part of it was expectations. A two-car garage used to be a sneering description of the showy rich. Three bedrooms, one bath…normal.
    When I went to college in 62, bringing along a desk lamp was a pretty good deal, and if somebody on the dorm floor had a record player, he had a lot of friends.
    Today, in material terms, the average poor person lives about as well as the average middle class person in the Fifties.
    Consider that the WW II generation did not expect to live in their own home as part of being married until some time had passed. My folks lived in apartments from the time my Dad got home from the war for five years. The last four was because the building boom hadn’t gotten up to speed and there simply weren’t homes available. That generation thught they were in fat city.
    But that home was the starter house. Later came the got-it-made house. Younger kids grew up in the got-it-made house and took that as baseline.
    The progression was aided by the fact that most mortgages were for fifteen years, which piled up equity hugely faster than the thirty-year plan.
    And most women worked, but much later, after the kids were more self-sufficient.

  10. holmes Says:

    ^This

  11. bob r Says:

    Bill Whittle: Rich Man, Poor Man.

  12. artfldgr Says:

    between those times, the kids who were taught by the union people of Dodds class, had kids and had decided to move their industry into a taxable place.

    ie. today, 50% of the population does not make taxable income… this is divided among people who can and people who cant…

    ie. back then, 50% of the population didnt make taxable income… this was divided among husbands who supported the family and the family

    marx and harmon and all them were basically saying, how can we tax women

    for some odd reason, women managed to escape the tax man with their work. from bake sales, to small businesses house money, to charities, and on and on.

    just to be clear…

    a woman today works… and pays taxes.
    most of what she makes if she is married, goes to pay two entities… the state, and a woman to watch her kids… the woman that watches her kids, pays taxes too…

    so, before, all this would not go to the state, it would go to their children… and their family..

    so in essence… from woodrow wilson onwards, the idea was to get women to work (a big war helped), then the work women did all day would be taxable at 30-50% depending.

    not to mention that this would also justify state intervention, help with state schools, justify higher taxes to be taken from the women to be given to women, to be given to the state again.

    women called this forced economic slavery “Liberation”

    now, we are finding out that what we had was best
    and that what we had WAS NOT A MYTH!!!!

    you can read recent articles that are now all chiming in on the stuff i brought up half a decade ago… the baby bust, which sees 30% of doctors retiring without replacements… and on and on

    Wage Gap Myth Exposed — By Feminists
    http://www.huffingtonpost.com/christina-hoff-sommers/wage-gap_b_2073804.html

    How many times have you heard that, for the same work, women receive 77 cents for every dollar a man earns? This alleged unfairness is the basis for the annual Equal Pay Day observed each year about mid-April to symbolize how far into the current year women have to work to catch up with men’s earnings from the previous year. If the AAUW is right, Equal Pay Day will now have to be moved to early January.

    the state hasnt changed in 40 years…plus
    because its not real. its been reported its not real for over 40 years too… but in order for our society to accept the truth, we have to have honest women who would fight for an honest answer, not lie and dissimulate when the false fact works to their advantage.

    anyone see that happening?
    anyone see the tongue studded, tramp stamped, bisexual hater of men who claims to not hate them, STD vector, and who wants more than equal status, and feels they have been cheated by men since time started…

    will live up to the ad copy they write about her?

    but when it boils down to it, we have known for DECADES That this is a fake number… however, what the readers dont get is this:

    feminism is promising women that they can be free of the responsibility of their own actions

    so when you read this:

    One of the best studies on the wage gap was released in 2009 by the U.S. Department of Labor. It examined more than 50 peer-reviewed papers and concluded that the 23-cent wage gap “may be almost entirely the result of individual choices being made by both male and female workers.” In the past, women’s groups have ignored or explained away such findings.

    no… thats not what they did, and the feminist who fights feminist is not really fighting… (she is covering all the bases, so you can have anything you want, but your going to get spam with it… you can have spam eggs spam spam and bacon…; that only has a little bit of spam in it).

    the feminists been promising women that they can be liberated from responsibility from the lives, their chiouces and even being women and giving birth.

    i wonder if people here know that? that they are promising young women that they will be equal with men only if they too, don’t give birth.

    dress in a mini skirt, go into a dark alley in the worst part of town, get raped by a illegal immigrant you support, and whose fault is it? cant blame the victim, can you?

    if so, then why can you apportion responsibility in civil cases? because women are not responsible for the outcome of their own choices.

    you have sex, you get pregnant despite 23 different forms of birth control, several of them free… and the tax payer has to pay to abort the baby, potentially sterilize the mother, and have a technition do it, as obama care means not enough doctors.

    and all so she doesnt have to be responsible for a chopice she made.
    [edited for length by n-n]

  13. artfldgr Says:

    let’s start from a comment found on Sunshine Mary’s blog:
    http://thewomanandthedragon.wordpress.com/

    “Our entire social structure is designed to support women’s living any way they want.

    Employers are required to follow a host of laws addressed to women in the workplace: anti discrimination in hiring, work assignments, work practices, workplace accommodations, and facilities. Anti sex harassment laws with insanely punitive consequences for men and insane definitions of “sexual harassment” (being defined as sexual conduct by unattractive men and any conduct by anyone that any woman doesn’t like). FMLA for childbirth and maternity leave.

    Women are allowed to do and say anything they want anywhere. Men are restricted in their speech and conduct. VAWA, which has a “must arrest” policy in a domestic violence call. Women can assault and beat men in public with impunity and the tacit support of feminists.

    There are new social customs to constrain most men. A man is forbidden to notice an attractive woman at work. He is not to comment on it, talk about it or even look a second or two too long. Nuclear rejections, public shaming are the norm if a man she deems unattractive deigns to talk to her in public. Men are never, ever to even notice good looking women. Older men are shamed from dating or having sex with younger women, and are shamed into dating women “more their age” for the specific purpose of providing men for lonely middle aged unattractive battle axe divorcees. Men are never, ever to comment on or appreciate a woman’s physical appearance, or compare an attractive woman to an unattractive woman.

    Attractive men are exempt from all of these legal and social conventions.”

    think of MGTOW as a Mahatma Ghandi response to the despotic femnazi’s

    by the way, what the women know of all this, is what feminists tell them. so when you read about PUA things from them… you read… look at what the horrid men are doing… when you read the young men who are learning PUA, they are saying “i dont want to act this way, i dont want to disrepsect them and play them, but i am tired of losing out to such people in the club as she finds dirtbags fun – that is until she decides to have kids and buy property.. then she wants the nice guy to fund her..

    ie. they learn to be sociopaths manipulators just to not be cut out of the GENE pool.

    but most women dont get that the point of Couger town is to try to get older women to enjoy their lonely years with no one (poaching younger women’s potential mates), and not advise young women as to what happens.

    women dont monitor what their advisors are advising in terms of whether it works, or whether their mates will accept it.

    we are now finding out that when men pitch in to do the housework, women have less sex with them (And more sex with that bad boy that also doesn’t do housework).

    so was men refusing to do housework really just a way to make sure the relatioship stays togetehr? he knew what worked genetically, she only knew what she read in a magazine.
    [edited for length by n-n]

  14. southpaw Says:

    It’s interesting that in a capitalist society, we people are focused on income inequaltiy as if it’s a national problem to solve, instead of as Thomass points out, how many people moved from one level to another.
    The measure of a society’s opportunity for success would be better measured by what percentage of its citizens moved steadily up to higher income levels, than taking a snapshot of it at any one time. A snap shot of income data simply tells you the range of income for that population.
    The government pushing down one bar on the right, doesn’t translate to the other bars moving up, as if they’re all connected by a crankshaft.

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