Comments: 270

  1. It appears that those cities clustered closest to the axis are mainly from Wisconsin (or Johnston). What explains their relative stability? I know the answer, but why is that not included in this discussion? Is that not relevant?

  2. @Ben Please recite the answer that you know.

  3. @5barris Economic opportunities that create wider disparities did not develop in these places.

  4. @Ben Same can be said for all rural areas. There is nothing pulling people out of the cities because there are no good jobs anywhere else.

  5. Enrico Moretti’s “New Geography of Jobs” is a must-read on this topic. The paradox of growth alongside inequality laid out there is compelling, and calls into question the ability of the free market to equilibrate itself without intervention.

  6. When does sharing the wealth of these prosperous firms, ever factor in? By sharing I dont mean redistribution of wealth, but pouring more of the profits back into a high performing business so all the employees share in its profitability. Not just the few at the top, in control of that distribution. There are plenty of people working for these companies where the inequality of high value skills versus lower value are felt, like a gut punch. Where an unproven college grad with the right CV, is over valued compared to experienced, long employed Office Assistants, etc, who basically run the day to day of the businesses. There are plenty of middle level non management staff in these urban, high performing firms, who are scraping by, but pound for pound contribute more to the company's bottom line then that gaggle of new college grad recruits most of whom will wash out in approx. 2 years. Share the wealth.

  7. Excellent analysis. I must, however, quibble with some of your statements. I graduated as an engineer in 1981 and my son graduated in 2015. His starting salary was about equal to mine, adjusting for inflation. So society values engineers about the same now as in 1980. And I believe the same is true of lawyers. While a more aggressive anti trust stance may help close the gap, I'd love to see an analysis of the actual tax rates of these two groups over this time period. Nothing redistributes income like taxes. The funding of public education in America also exasperates the wage inequality issue. Manufacturing jobs left many cities with inadequately funded schools, which in turn leave many of the 90% earners getting inadequate educations. And this in turn reduces their capacity to compete for the jobs of today. (talk to any employer - it's very difficult to hire qualified workers today)

  8. @deedubs And why aren’t the employers and capitalist paying for the training? They have had forty years to show their system works yet they keep socializing their costs and blaming government which they defunded. They want trained people they should pay for it. Since they haven’t tax them.

  9. Good analysis. Particularly telling here in flyover country is automation, globalization and the decline of manufacturing have decimated well-paying jobs that once required no more than a high school diploma. Even the farm is more automated now than ever before and science has changed the crops. In 1980, the average farmer grew crops that ultimately fed 18 people. Today it is 43 and our neighbor was a testing area for automated farm machinery 8 years ago which will further reduce farm labor. Two things stand out in every part of the country. First, there is no longer an equal opportunity for an equal quality education for everyone. Educational inequality is helping drive income inequality. Second, every high school graduate should assume their education is incomplete. Whether technical school, apprenticeships, community college or 4 year college, education beyond high school is necessary to get a middle class job these days and in the future.

  10. @tom Are you complaining that the average farmer can feed so many people? I thought food was good. There will soon be 8 or 9 billion people on Earth. Who will feed them? One of the main reasons why there were people available to do manufacturing was that they were not needed to make food for the rest of us.

  11. @danarlington not complaining at all. Just the facts of how agriculture has changed along with other industries with automation.

  12. I imagine this must come as a blow to the Binghamton Opera Company. And, I suspect that their Fine Art Museum is losing membership. Will the Shakespeare Theater reduce their offering in 2020? As is the often the case, here in the never, never land of enlightened Progressives, you have gotten a firm grip on the wrong end of the stick and refuse to let go. The reason that New York City is filling up with rich people is the same reason that another class of individual finds welcome and a home in centers of the mud wrestling community. Rich people live in rich places with rich environments that include amenities not available in the great waste lands between New York City and...twenty years ago I would have said San Francisco, but that city and its culture have gone far, far into the dark lands of political correctitude and their predilection for contemporary, Latinx, differently enabled, LGBTQRSTUV, international, Union friendly art, theater and music is more a source of amusement than inspiration. Chicago is not terrible, aside from our orchestra's insistence upon performing in padded cell; the Opera is quite the equal of yours and both Shakespeare and Gaugin are welcome here. And income inequality flourishes, likewise. It is called freedom and capitalism and while both have their drawbacks, the stuff You People offer as an alternative is the reason the Oval Office is brimming with The Donald. Every time Nancy opens her mouth, I reach for my MAGA hat.

  13. Oh, you mean the Tri-County Opera? Perhaps include the Binghamton Philharmonic, or the Schorr Family Theater? One of the best SUNY schools is located outside of this struggling city, and there's an observatory, local history museum, and other venues, along with a PBS station that reaches 2 tiers, the Southern Tier of New York, and the Nirthern Tier of Pennsylvania. Any city known as the 'parlor city' is destined to struggle in the 21st century, but keep your snobbery to yourself, please. Some of us like living here.

  14. You are quite the enlightened individual. Must be great to know you.

  15. @Good John Fagin After living in suburban New York and suburban Philadelphia (among other places), I moved to the Binghamton area more than 20 years ago and have yet to meet a single mud wrestler. You find happiness where you look for it, and I like this town just fine.

  16. This has happened over and over again in our country ie the rich getting richer or in certain times the poor using the richer like with the welfare state abuses and rent control. Now it is the former. Don't soak the rich, give the poorer a leg up with job training, temporary welfare benefits if called for, minimum wage increases etc. etc. Don't view it as the rich must pay, view it as giving everybody a fair shot at being rich and if they don't get it, don't fall through the safety net.

  17. @Paul What profession might that line cook be trained for? And what jobs are available for someone who isn't able to earn a high school diploma -- or be trained for something that pays a decent living? What should happen to the people who simply don't have the abilities to rise to higher levels?

  18. @Rea Tarr thank you for your reply. Hope is not to cold up there in Malone, it a bit messy here in Bklyn. The bottom line is to give the bottom guy on the totem pole every help you can give them and then if all else fails, welfare. If this happens, let the rich guy make as much as they want as long as the lowest guy doesn't fall thru the safety net. That is what is going on now. One example, as many as 50,000 Americans at any one time either are under insured or have no medical insurance.

  19. This trend is not limited to the US - it shows up even in W. Europe and even in countries like India that have embraced capitalism. Giant cities now wield more economic power than their countries, and urbanization is an increasing trend. Those who hold capital in these cities e.g. housing stock, grow richer much faster than the labor that moves there, not to speak of those who don't live in these Metros. This trend has other long-term negative side-effects - it reduces the mobility of the workforce within the country, for example. And of course, the effect on representative federal elections polarizes the politics of the country radically, encouraging far-left and far-right ideology. One solution might be for government to find ways to incentivize successful businesses to build a presence in these "left-behind" towns e.g. Armonk, NY (in the heyday of IBM), Rochester, NY (Kodak), or even Hillsboro, OR (Intel) as opposed to existing large metros. The way the recent Amazon HQ2 beauty contest went, does not, however, inspire confidence. There are some instructive examples in Europe though. Dresden has turned into Germany's high-tech town, even though it languished in communist E.Germany for years. Ditto for the town of Glashütte that now has a thriving watch industry. And Innsbruck in Tirol where Svarovski put down deep roots.

  20. Isn't what is being labeled as inequality really just dispersion? Where is the "inequality" in a job market? Don't people just get paid what the market sets (in the long run)?

  21. This economy values an engineer so much more than a line cook because the skill sets and education required for a line cook are significantly less than those for an engineer. This is why so many people are qualified to be line cooks and so many fewer are qualified to be engineers, the pay differential also being a result of supply and demand. The disparity between value-added for a line cook vs an engineer also helps explain the salary differential between the two. It is only communists (or the crypto-communists who call themselves “democratic socialists”) who believe that compensation should be driven by the rule “from each according to his ability, to each according to his need.”

  22. @Mon Ray Wages for low skill jobs have stagnated in the face of inflation, meaning an actual decline in pay. Certainly, a line cook deserves an adequate wage regardless of how many people can qualify for the job. If a person wages were determined solely by how many people can do the job, most managers and all politicians would be paid nothing.

  23. @Chris The article says real wages for the bottom have increased 15%. It's not much but it's not a decline in the face of inflation. "Real" means taking inflation into account. Anyway, it is not true that most people can be politicians or managers. Most politicians lose their elections and only a few people who start work make it into management.

  24. @Glenn Ribotsky, I work in construction/engineering. No they're not. One engineer is worth a 100 laborers.

  25. The Economist uses the same data to show our major cities are becoming more integrated

  26. This article misses a chance to try and understand what’s good and bad about inequality. Inequality by itself does not make people’s lives better or worse. If you add rich people to a town, that increases inequality without by itself changing anything for everyone else. It can be positive by increasing the tax base. However inequality can change prices and for whom the town is run. It would be interesting to know what richer and poorer towns think about the changes.

  27. @jerryg Not exactly true. Adding rich people, especially a lot of them, to a town does change the town and all the people in it. That’s because rich people behave and spend their money differently. They buy or build housing in the best neighborhoods, all congregating there, which drives up the prices in those neighborhoods. It increases income segregation and the schools become more segregated too. That hurts middle class families who used to be able to buy homes in those nice neighborhoods, but now they will either have to spend a lot more on housing in those Neighborhoods or move to a different neighborhood with lower quality public schools. And that, in turn, will drive up housing costs in those neighborhoods. Social consequences abound.

  28. @Cam What you've really proved here is that providing school funding through local school districts increases educational and social inequality. It should be noted that the United States of America is the only major developed country on the planet that funds schools this way. Just about every other country has federalized educational funding and educational standards.

  29. The foundation of inequality has been the unprecedented rise in the stock market from 1983 to 2019. Those who have invested or involved in investment have done much better than anyone else. It's so simple that it's a shame economists and politicians have failed to notice. If there is a fix, it is shifting money (through taxation, most likely) from investors/savers to spenders/non-savers. And one wonders why it's so difficult?

  30. @OneView Yes, the stock market, but even more effect from private equity, where the returns are much higher. Nothing else has contributed more to the concentration of wealth and enormous gulf between the .01% and the rest of us. And these folks are the ones who have stripped companies of pension plans, so even the few whose jobs haven't been replaced by a circuit board can barely hold together.

  31. @OneView Once upon a time there was a recommendation to invest some of Social Security in the stock market. Liberals shouted it down, calling it a gift to Wall St. It amounts to giving wage earners a chance to participate in the gains that investors have. Your solution is to take rather than give.

  32. Investors often lose money. When a wave of people retires, what happens when they collect?

  33. This is an important point. Too many stories and opeds in the media are based on the supposed city/rural economic divide. In fact low-income people have been falling behind everywhere. Democratic as well as Republican policy has assumed that if those at the top get more money, it will eventually mean more for those at the bottom, but there has been little trickling down. Wage suppression is an important part of making profits in the short term, and CEO's will work hard at it. Tax policy is not irrelevant. For example, why would CEO's pay themselves enormous salaries if most of it is taken by the government? Low tax rates shift effort to making a quick killing instead of building up business for the long term. There is no reason to assume that lower inequality in the era of progressive taxation was an accident, and there was certainly no lack or effort by anyone in that time.

  34. I am shocked. The Upshot documents sharply rising income inequality in American metropolises, but mentions absolutely nothing about the GOP's actions that brought about that inequality: its war on labor unions; Reagan's slashing of income tax rates for the wealthy, which led to what Thomas Piketty noted was the rise of "super managers" making tens of millions of dollars a year. Not a word about Republicans' keeping the minimum wage at levels far lower than it was forty years ago. Not a word about the attack on defined benefit plans, and the push of workers into risky and vastly under-funded IRA's. The Upshot continues to demonstrate that its focus is on obfuscation of the GOP's role in destroying the middle class, instead of principled and courageous illumination of its actions.

  35. @Sean Yet most of the cities with the largest increases in inequality have been predominantly controlled by Democrats for the last 30 years. And how they howled when the SALT deduction limit on federal taxes was instituted -- which would seemingly have aligned with their stated aim to "tax the better off more". Odd.

  36. @Cecil Scott Income inequality has vastly more to do with national policy than the actions of mayors.

  37. @ Cecil Scott. The issues addressed were federally controlled. A politician in a city that you call democratically controlled was not for example, able to veto the reagan tac cuts

  38. So sad. Thank you, stupid leaders, who have allowed mega-mergers and the flight of manufacturing. Thanks for ruining our country and depriving people of jobs.

  39. "In New York, the real wages for workers at the 10th percentile grew by about 15 percent between 1980 and 2015, according to the Fed researchers. For the median worker, they grew by about 40 percent. For workers at the 90th percentile, they nearly doubled." In other words, every level earns more since the pie got bigger. Those with a righteous dedication to income equality have to choose: accept a growing pie, with some getting proportionately bigger slices, or demand equal slices, with a very high probability that the pie will not grow. One of these makes people materially better off, while one indulges puritanical ideas about economic justice.

  40. @Bob Krantz, Whoa, factor in the cost of housing, the price of food, the cost of owning a car; all significantly lower in Binghampton than NYC. It doesn't make all of it up but then people in Binhampton aren't likely to work for Goldman Sachs. Which may be looked at as a positive, depending on your point of view.

  41. @Bob Krantz your argument ignores the fact that while the income of those at the 10th percentile grew, it didn’t grow enough to keep up with the cost of housing, going out to a restaurant and so on, the prices of which have been driven upwards by those at the 50th percentile and above.

  42. @Bob Krantz Stretch a rubber band too much and the rubber band snaps. Time to live in the real world.

  43. What you keep in your pocket matters. What would help would be changing the way school taxes are paid, and cancelling some of the larger exemptions, so that those who aren't in the top 10% can afford to live without doubling or tripling up in housing. Another help would be the federal government -- fund those special needs mandates. And the school district...annual raises for its employees as a percentage are anywhere from five to a hundred times the raises for the parents who do work on the books.

  44. As a rule, doctors, engineers, computer scientists, lawyers, and professors want to live and work in a vibrant metropolitan centers such as Manhattan because of the cultural advantages and the multi-cultural environment. Tech used to dominated by a few large firms such as IBM and AT&T, Boeing, GM, Ford, GE, etc. and they would control the labor market including pay and locations that were less expensive for them but undesirable for employees. These larges firms could dictate the labor market pay and location. Now, there are many more firms that are paying the tech talent their true value and competing for top talent and therefore they need to pay appropriate wages and locate where the talent wants to live. Manhattan and not Binghamton. Amazon HQ2 was split between DC and NYC because that is where the talent wants to live. Instead of focusing on wages, there should be a focus on the cost of living especially when bad policy has made living costs unaffordable for people with lower wages. For example, because of artificial scarcity from zoning density restrictions the cost of apartments and housing has risen in NYC, but also Boston, DC, Seattle, SF, and LA. In Tokyo the costs of housing has not increased in two decades because there are national laws against zoning density restrictions. In 2014, there were 20,000 housing units built in NYC, 90,000 in CA, but 140,000 in Tokyo.

  45. @David MD Ah, at last. Private property and the limits of American constitutionalism.

  46. @David MD David MD, keep going. If low wage earners can’t afford to work at my company, there’ll be fewer available, and I guess I’ll just have to pay more to get one. Markets are better problem solvers than ideologues - mostly.

  47. Growing inequality is one of the two major issues of our time (the other being global warming). That notwithstanding, inequality driven by rich people choosing to live in fewer and fewer major metro areas isn't a sign of anything other than the choices made by the top 1/2 of 1%.

  48. I wonder if we are focused on the wrong question. I think that people who spend approx. 10 years in school to become engineers and innovators should be paid more. I also think that it makes sense that they go to where the jobs are... I think that the question more worthy of this level of focus is about the skills or education gap. Along with questions about the quanity of these types high wage jobs .... even if NYS was to miraculously raise the education standards to encourage more participation in STEM classes would there be enough of these high wage jobs for all the engineers and innovators?

  49. Raising the minimum wage would help. Not everyone can be an engineer

  50. Low-income city dwellers are at a much bigger disadvantage. My experience in Chicago is the only firsthand experience I have on this untenable situation. The shiny parts of Chicago will almost let you believe in a vibrant Chicago with growing income. I lived in Streeterville with a mix of businesses and residential highrises; thirty-something-year-old couples mixing with retired empty-nesters who moved back to the city. They will tell you every chance they get about how their part of the American dream gets tarnished by the south and west side of Chicago. The low-income and high-income Chicago lives in two different economies. There is nothing wrong with rising income or young educated couples living their dream with two-income households. I loved living in this Chicago - clean, beautiful streets, morning dog walks along the river, wholefoods, parks, and nice cafeteria bustling in the morning. However, it is unacceptable that the other Chicago cannot feed itself and the mortality rate is as high as in any third world country. Houses are run down, stores have hardly anything good, and unemployment is visible in every street corners. Exodus of black citizens of Chicago tells you that the youth sees no path for them to this other economy of Chicago. It is not an economic ladder - it is a community where a path between low and high-income citizens does not even exist. This article is a stark reminder that our governance structure has failed us.

  51. Last night I watched a TV special on Homeless in Seattle Then I looked at Seattle Craigslist where rents are by the week, not the month as most places are. The cost per week far exceeds per month where I now live. Very glad that right after the 2016 election I decided to move from Chicago, where housing is also exploding. My condo doubled in 14 years, now doubled again in under 3 years. Bought a cheap house cash near a big college and a wonderful empty forest. As I am over 65, I can also defer my RE tax until I pass. No snow here! yet...

  52. Interesting that Washington D.C. spikes up there with the other top rankers.

  53. A "find you city" option on the interactive would have been helpful. Thanks.

  54. We need more and better education for everyone and jobs to fill for everyone.

  55. Well, we do. But the rote jobs people used to do have been replaced by machines, and not everyone is amenable to buckling down and doing difficult academic work. Not everyone can become a physician, a physicist, an accountant, or a civil engineer. Where are our token booth clerks, highway toll collectors, supermarket check-out people, our ditch diggers, our assembly-line workers? Automation and computers took their jobs. There's more to it, of course: Americans like cheap junk, and lots of it; so we get our products from China, where people are housed in barracks and spend their days putting things together. Buy American. And use birth control, the great leveler: You can do a good job of rearing 1-2 kids under hard circumstances, but not 4-6.

  56. Think it’s bad now. Wait for the next severe economic downturn, triggered by our debt fueled shell game casino economy, where these inequality and declining standard of living trends will accelerate to hyper drive and expand. The upper management/professional class Top 10% know this and that is why they are complicit in this bubble with others who move in and out of the 1% based on the rise and fall of their equity stakes. They are just trying to hold on because they are smart enough to be terrified about what will happen to their own standard of living in the next downturn and could care less about people living on the other side of the moat they have constructed.

  57. The seeds of income inequality were planted by the Reagan tax cuts for the wealthy. Obama's Fed ratcheted up income inequality by institutionalizing public support for Wall Street, which continues under Trump. Beneficiaries include most if not all decision-makers in our society, so reversing these economic policies will be difficult.

  58. @RC Income Inequality is based on pre-tax, pre-transfer payments. It is symptom of changes in labor demand, not tax policy. Said another way, the statistics don't compare net take-home pay of a physician to the wages + Earned Income Tax Credit of a working single father earning $30K/yr. If Andrew Yang provided that working father with $12K additional, it wouldn't show up in the inequality statistics (since the demand factors that drive the single fathers wages aren't changing). The story of income inequality is one of high demand for very specialized labor (such as patent or intellectual property attorney) and low demand for barbers, cooks etc due to fiercer labor competition.

  59. It began under Bush II, not Obama.

  60. @Dinahfriday Sorry it was Ronald Reagan and Milton Friedman that preached "Trickle Down Economics". We now that was one of the biggest lies told in modern American politics.

  61. The continued use of the phrase highly skilled is inaccurate and revealing of unconscious bias at best. How are we defining “highly skilled” in this article? High wages aren’t a hallmark of “highly skilled” positions. It’s a hallmark of a society that values certain people and certain skills over others. I work in academia with many very highly skilled and highly educated people who make very little money. And this is in one of the richest and most prestigious public universities in the country. I work with brilliant, highly skilled researchers who are going into the social work field, where a masters degree is a minimum requirement. People in these positions often qualify for food stamps. And they have masters degrees at minimum! This perspective also covers over the fact of the gender pay gap and inherently implies that cis men are more highly skilled than people of other genders. While I’m sure this article is well-intentioned, it is contributing to the problem of income inequality that is perpetuated by a highly toxic form of (patriarchal) capitalism that values certain people over others and claims it does so on the basis of “skills,” when the data so clearly shows otherwise. I am personally and professionally deeply offended by the inherent bias and perpetuation of a violent marginalization of so many different communities who have been told their entire lives that they are worth less than these “highly skilled” employees. Please do better research.

  62. @Elle Can you share this data with us? "While I’m sure this article is well-intentioned, it is contributing to the problem of income inequality that is perpetuated by a highly toxic form of (patriarchal) capitalism that values certain people over others and claims it does so on the basis of “skills,” when the data so clearly shows otherwise"

  63. @Elle Wake Up! The economy is not some conspiracy directed by some evil genius bent upon creating anti-social outcomes. It's an organic process in which things become "valued" according to the relationship between supply and demand. Rational and successful individuals structure their lives to optimize their prospects within that reality. You knew all along that you were not going to become wealthy pursuing an academic career in social work. Who is to blame for that decision. The saddest part of this new public obsession with inequality is the desire by those who are not succeeding to punish those who are. Do we really think it is a "problem" that some in our society develop highly valued skills, earn superior incomes, move into desirable places, and then try to create advantageous conditions for their families? Is that something we want to stop or curtail? Our society once was based upon individual freedom. Sadly, many of us use that freedom poorly, and then look for others to blame. Sorry Elle, it's a competitive world, always has been and always will be.

  64. @AR Clayboy The issue isn't so much about punishing successful people. It's that the current economic dynamics are so skewed that it has created fewer opportunities for people to climb the economic ladder. You attitude in regards to "Do we really think it is a "problem" that some in our society develop highly valued skills, earn superior incomes, move into desirable places, and then try to create advantageous conditions for their families? Is that something we want to stop or curtail?" Reflects that prevalent attitude among many Americans; "I've got mine and if you can't get yours, then too bad." We used to be a country where the social consensus was it's better for society to offer people the opportunity to improve their lives, based on your opinion and the people that agree with it that isn't necessarily true any more.

  65. A related discussion to today's topic is in Sunday's NY Times (12/01/2019), where an article by Scott Shane discusses the economic impact of Amazon on Baltimore, by making it a type of warehouse hub for its regional operations. On a site where GM and Bethlehem Steel once had manufacturing plants, Amazon has sited two "mammoth" warehouses. Per Mr Shane: "Those on the floor earn $15.40 to $18.00 an hour, less than half of what they their unionized predecessors made. But in Baltimore's postindustrial economy, the jobs are in demand." A key part of Mr. Shane's analysis discusses how effectively Amazon uses IT data gathering methods to control and winnow its work force. Per Amazon, 309 workers were dismissed at these two warehouses last year for failing to meet productivity standards. (Whereas, other legal sources stated the number of workers dismissed was more than 800.) On a more positive note, Mr. Shane cites a futurist and tech specialist, Amy Webb, who states that currently at these warehouses: [(The marginal productivity of workers/Their wage rate) > (The marginal productivity of IT-driven machinery)/(All marginal expenses due to this machinery)]. In other words, a la the above cost estimates, and per Ms Webb; the robots haven't taken over just yet. But, "It's that we've been relegated to robot status." [12/02/2019 Mon 11:42 am Greenville NC]

  66. @John Joseph Laffiteau MS in Econ The most important takeaway from this article is NYC & SF are Democratic strongholds from top to bottom. These cities should be a showcase of how well we can address the issues of inequality. Instead, it's yet another example of our total intellectual bankruptcy. It's symptomatic of a much bigger problem. The growing divide between some Democrats who want to practice what they preach & fanatical progressives who want to strangle everything. Environmentalists in SF will go to the barricades to stop any housing projects from being built. Mind you we are talking about affordable housing for working-class families. Thanks to their efforts the gateway to middle-class security, has been pushed beyond their reach. The ease with which environmentalists can stop housing developments is a direct result of the numerous local & state laws that favor environmental concerns over affordable homes. The result: millions of hard-working people are without access to high-quality low-cost housing. NYC not only has some of the most segregated public schools but some of the worst. Parents here will go into heavy debt so they can send their kids to private schools rather than public. The DOE says a huge percentage of public high school graduates can't read or write on a college level. It's no wonder they flounder when they get into the working world. Why is anyone surprised at the inequality in our major cities when we can't even address our most basic problems?

  67. @John Joseph Laffiteau MS in Econ Here's the point: I couldn't care less what Amazon is able to squeeze out of its workers, or what its productivity is. If you're paying poverty wages, then you are cheating the workers, and you're destroying our society. Amazon should be forced by federal law to pay a living wage. Period. The wealthiest man on the planet should get a conscience. And if not, America should enforce a living wage.

  68. @ Sean, 15.40 to 18.00 an hour is $32,032.00 to $37,440.00 a year. That these are poverty wages is new to me. Last I looked the poverty level for a family of 4 was $25,750.00 and the poverty level for an individual was $12,490.00. Amazon’s wages may not be cushy but they are well above poverty levels.

  69. The most important takeaway from this article is NYC and SF are Democratic strongholds from top to bottom. These cities should be a showcase of how well we can address the problems of inequality. Instead, it's yet another example of our complete intellectual bankruptcy. It's symptomatic of a much bigger problem. The growing divide between some Democrats who want to practice what they preach & fanatical progressives who want to strangle everything. Environmentalists in SF will go to the barricades to stop any housing projects from being built here. Mind you we are talking about affordable housing for working-class families. Thanks to their efforts the gateway to middle-class security, has been pushed way beyond their reach. The ease with which environmentalists can stop housing developments is a direct result of the numerous local & state laws that favor environmental concerns over affordable homes. The result: millions of hard-working people are without access to high-quality low-cost housing. NYC not only has some of the most segregated public schools but some of the worst. Parents here will go into heavy debt so they can send their kids to private schools rather than public. The DOE says a huge percentage of public high school graduates can't read or write on a college level. Unacceptable! It's no wonder they flounder when they get into the working world. Why is anyone surprised at the inequality in our major cities when we can't even address our most basic problems?

  70. @Bill Brown Are you proposing just giving up? Or is Blame the solution? I read both in your comment, so I'm not sure of what you propose: apathy or blame. Good luck with that.

  71. @dannyboy No. I'm not proposing that we give up....never. Progressive Democrats control most of the major urban centers cited in this article...in fact, in most cases, they have absolute control of the political machinery. Look at the results. Massive inequality. Why should we trust them with the reins of power if these are the results?

  72. @Bill Brown I could offer a counter to your argument rural Louisiana, where lax environmental regulation has led to communities near petroleum refineries with some of the highest cancer rates in America. Low taxation means these communities also suffer from children getting sub-standard educations, and poor infrastructure which makes them undesirable places to start or expand a business. The result is type of grinding poverty that doesn't get the media attention that urban poverty gets but leads to the same type of hopelessness. Oh and most of these places have Republican mayors, and state legislators.

  73. This chart looks fancy, but very hard to track individual dots with the uniformed color pattern. Would be interested to see Nashville in 2019, relatively low for 2015, but with huge population increase past several years, one would assume the wage gap has increased even more.

  74. Any analysis like this is, of course, skewed by the fact that it is based on wage income. Rich people, especially very rich people, don’t make their money from wage income, they make it from profits on investments, irregularly occurring fee income, commissions, rent income, inheritances, and from other non salary sources.

  75. @Pottree Yes, Rich people get richer from excess returns to their capital and excess rentier income. Do you see how this discourages productive work?

  76. @dannyboy In order to get rich from rental income one has to have property. That property has to be built and maintain to get a return on investment. If a investor invest capital in a company that company has to produce goods or services that provide a return on investment. Investment and returns on investment do not necessarily discourage productive work. But what we as a society haven't confronted is that the return on capital now exceeds what was traditionally the return on labor. That has skewed the economic dynamics of this country to benefit investors to the detriment of wage earners.

  77. @Carl "rental income" in economic terms it not only what tenant pays landlord. It includes the extra amount earned from capital.

  78. This is not new, nor enlightening. As manufacturing jobs have gone away, OF COURSE the gap is rising. Does not mean anything should be done about it. It's just what it is.

  79. @Roy P You posit that "It's just what it is", as if government policies and corporate machinations had nothing to do with it. But they did. So change those and you will have different, more healthy outcomes.

  80. @Roy P It is what is, that's cool. But don't beef if the market makes corrections by means of crime, social unrest and revolution.

  81. Did the study include assistance from various points to those with low incomes. For example, if those with low salaries have an effective negative income tax rate, or get other forms of assistance, the degree of inequality might actually turn out to be less extreme. Things might not be as bad as the chart indicates.

  82. One thing we didn't need in New York, if we wished to reduce income inequality, was more real estate speculators buying up sites for super-skyscrapers to provide every last visiting billionaire with his (or her) own pied a terre. That was what Michael Bloomberg most notably brought us -- and here we have him running for President!

  83. Billionaires should be taxed at a higher rate, but there's no doubt that their New York City real estate taxes are hefty and help for our municipal and social services, also hefty.

  84. @B. Yes, but if they're only using their NY residence as a pied a terre and not their legal residence, they're not paying any taxes in NY--PH

  85. @Piri Halasz "let's limit prices by limiting supply" - people who slept through economics class

  86. It is important to analyze this in the context of what income is required for a decent standard of living within those cities, including other non-wage support and services. Income is only one component of this equation. All things considered, I’d rather have the higher inequality driven by some having higher wages than less inequality caused by people losing high-paying jobs. More high wage jobs and a strong economy can be leveraged to bring up the low wage workers. Job and population loss leaves little room to mitigate social problems. Examining the political anger in the country, It appears that most of it is not in the larger, high income cities. It is in the downward sliding rural areas and smaller cities. That tells me a lot about what is going on.

  87. The high income earners did so be their talents, hard work and acquiring skills of the global economy. Even in schools, you can see which kids strive and which kids spend all day playing Fortnite. Invest in better STEM education for all, encourage work rather than computer games, have a basic support for healthcare for all as a human right. Essentially provide the resources for the low income a decent quality of healthcare and access to education and training but they have got to strive. Meanwhile, tax the super rich. Amazon is exploiting the internet - there is no place of origin of manufacture and and of the company, and isnt it the law that country of origin must be disclosed? I dont want to buy things from.some sellers in some countries. Basic legal and tax inequities / loopholes have to enforced to address unfairness

  88. I lived in a small post-industrial city in Upstate New York. There was very little income inequality. NO ONE had any money. This was not what was promised back in 1980 when everyone was convinced that a more aggressive free market economic approach was going to make us all better off. That approach was only half successful. It made people at the top better off. The market was supposed to redistribute that wealth to others. That didn't happen as promised. It may never happen. Income inequality may just become a fact of life. But at least we can stop giving tax breaks that make it worse. We can stop going down the path of tax breaks, budget cuts, and deregulation.

  89. "That didn't happen as promised." Of course not; they lied. The economics profession, is, through deifying the 'free' market, one of the most brazen and ideological components of oligopolistic capitalism. Rampant inequality is not merely a byproduct but its raison d'etre.

  90. @Karen Thornton you hit the nail on the head ! Since the 80's politician having been promising the masses yet delivered $$ to their funders. The politician, elites and those that to whom their re-election dollars came from benefited the most along with folks close enough to these groups to grab their share. I think NYT alone has enough data, i.e. "promises not delivered" from their paper alone -14215 days to be precise from 1/1/1980 to come to this conclusion.

  91. This doesn’t capture nuance. It also infers that rural areas have chronic poverty and have zero capacity to create jobs of value. There is nothing pulling people out of the city. There are no jobs of value outside it. That is a real problem as well that can be addressed through government green technology focus in moving to areas and build infrastructure of value outside the main hubs that care the only ones providing middle America even a chance at a life.

  92. Inequality is life. Stop with the socialist dreamy stuff.

  93. "But they would not alter the fact that this economy values an engineer so much more than a line cook." There's a lot of truth in this. It's comes down to need. At some point we're all going to need the services of a plumber, electrician, a doctor and lawyer and a banker. I can't do those things myself, and I'm going to have to pay for that. Grudgingly I might add. Esp the plumber. Restaurant employees, sit down or fast food, I don't really need those services. It's sure nice to patronize them but if things get financially dicey it's the first thing I have to cut out. Same goes for dry cleaning, maid service, car wash, etc basically any classic service industry job. Therein lies the predicament for folks who fill those jobs. It's precarious and not great for supporting a family. It's okay as a starter job or for those who don't have a command of English (immigrants) but to live on? Not sure it makes sense either to raise the pay up to an amount that won't sustain the position. $15/hr might be okay but if a "living wage" in the area is $25/hr a business might find it can operate only with 2 employees instead of 5. Or go automated instead. However, I do believe nurses, teachers, and those who make up mid class professions (often public sec jobs) are woefully underpaid and do need salaries commensurate with their positions. Don't ask a prospective teacher to have a $50K degree but only pay them $35K/yr. And that's on voters too for not paying for that.

  94. This is normal and expected. Cities are where high-IQ people come to work on tech, finance, law, etc. As the economy gets more specialized and knowledge-based, high-IQ people will naturally and disproportionately benefit. Charles Murray pointed this out in the Bell Curve years ago.

  95. Added to the highly paid technology workers at the top expanding, you have the major metro areas flooded with immigrants, both legal and illegal willing to work for any low wage at all. This is like a rubber band being stretched at both ends. No one wins this game or really can even afford to play it.

  96. This really seems to reflect the disintegration of the social contract, the sense that we're all in this together. A few comments have mentioned labor unions. True. And yes, Republicans have waged war on unions. But the bottom line is that workers stopped organizing because they bought into the lie that capital (vs labor) was the sole engine of economic growth. Millions of workers envisioned their 401k growth as a substitute for wage growth, and the one percenters in charge were happy to oblige. Fundamentally this is a me-instead-of-you mindset, the false and silly fantasy that because I have 50k in an IRA I'm part of the ownership class. And concurrently automation and data science are putting millions out of work. Barring some sort of unforeseen economic use for the human body and the labor it could provide, or massive government intervention, inequality is going to get much worse before it gets better. Consumption is still the engine of the economy. I'm wondering if consumers' unions might replace workers' unions in some fashion.

  97. This is on study area where looking at outliers might be very informative. While company towns likes Binghamton or Schenectady took and are taking body blows by the departures of key jobs (IBM and GE) are there other places, similar demographically that are prospering? Are there other factors at play? Perhaps its also impacted by people settling where they're around people who are politically or socially like themselves. Binghamton and the Southern Tier of NY are largely deep, deep red. The laws, the people and general culture reflect that. While it's comfortable to those who've lived like that for generations, the newcomers may not feel so welcome. And yes, I understand the regional exceptions exist (Ithaca) but look at the voting patterns in that area to get a sense of the culture and its ability to be truly tolerant and accepting of diversity.

  98. The NYT is not afraid to report the bad news about large cities ran by Democratic politicians. However the impact of millions of low-skilled undocumented immigrants is not included in the analysis.

  99. @Dr. John oh please: "the impact of millions of low-skilled undocumented immigrants " you mean the people working here as farmworkers? Housekeepers? Haven't seen too many white males wanting those jobs and besides that's a false flag/red herring promulgated by the right to spread hatred and fear of the "other". I very much doubt that the highly paid immigrant engineers/doctors/lawyers that are HERE are "undocumented" . That highly educated Indian neurosurgeon is not stealing "bubbas" job. However, the corporations that OUTSOURCE engineering/Tech work to India/Asia ARE "stealing our jobs". Go after them! Those are the companies laying off people (engineers/tech workers) and replacing them with people in India/Asia . And the coming "robopocalypse" for jobs .....robots are being used (and are in planning to be used) to automate manufacturing, shipping, delivery, driving,....that is for sure going to take away jobs from the undereducated.

  100. @Dr. John What do you believe is the significance of the fact that large cities tend to be run by Democratic politicians? Do you honestly think Republicans would improve inequality? What relevance do these immigrants have? Do you believe low-skill jobs would pay any better if they didn't exist? Why bicker over pennies while a small number of people make off with the bank?

  101. Our thoughts, exactly. Thanks!

  102. Gee.... what's wrong with: "From each according to his talents; to each according to his needs." Oh foul heresy! That dares to question the Moloch of the Market. But I ask again, by what logic, external to the fetish of the market, should a physician bloat while a janitor starves? Oh, it will sagely be said -- as we have been taught to say -- the first fulfills a more important function. Oh yes? Then why does a Hollywood clown earn more than a surgeon? Your principle has no clothes. I call it out. The title of the article ought to have read: Free Market Capitalism proves to be destructive of Just Civil Society. Oh huff and puff. Such childishness! It certainly should not see the light of day in the Times.

  103. @Chip "Gee.... what's wrong with: "From each according to his talents; to each according to his needs."" You expect people to work without the motive of personal gain. Your proposition relies on the fantasy of human selflessness. A physician clearly should make more money than a janitor, not only because their job is more important, but because it takes enormous effort to become proficient at it. That a janitor should then starve is a false dichotomy. The rich entertainer makes more than a surgeon because of the sheer number of people their job interests. I don't see how this is an argument of substance.

  104. if line cooks and store clerks were compensated fairly with living wages and health care, education and rentals were accessible and affordable, the disparity of rich and poor would not be so painful. the gutting of the middle class has destroyed the social fabric of our country

  105. @pamela The employer and employee negotiate compensation. If it wasn't fair, they wouldn't enter into the relationship. The government should step in to set wages? Perhaps you'd feel differently if they stepped in to lower your wages 20%, or required you to double what you pay landscapers/lawyers/accountants/housepainters/whomever

  106. @pamela - People are paid what their job is worth, as determined by the person paying for the job - the employer. If prospective employees are not willing to do a job for what the the job pays, then the position goes unfilled, unless the employer can figure out how to make the job more valuable and raise the going rate - usually by adding automation of some kind. Look at the ordering kiosks being installed at McDonalds or the groceries self-checkout machines. The only way to increase your income is to make yourself worth more to prospective employers. Get more schooling, learn a better skill, master what you do better than others around you. Then employers will compete against each other for your services. That's what happens all over Silicon Valley and in other tight labour markets.

  107. @Andy Deckman what are you talking about? compensation WAS negotiated by unions for 33% of employees a few generations ago. and yes, i would be willing to pay more if health care, education, and rentals were more affordable.

  108. When this current Bubble bursts, things could get very ugly.

  109. One mustn't forget the impact of Clintonian trade policy. Democratic policy favored coastal cities and abundant consumers of Chinese goods. One can argue that the US should subsidize Mexico's industrial development, but those pushed out of US jobs should not pay the whole bill for that generous gesture. We used to try to compensate to a modest extent, those thrown out of work by national trade policy that helps some sectors while devastating others, but the amounts given workers to retrain or move are pitifully tiny these days. It is estimated that over 700,000 US jobs were lost by NAFTA. Upstate NY (which includes Binghamton) was devastated. A corridor once booming with industry now has virtually no national corporations. On NAFTA-induced losses, see Jeff Faux, “NAFTA’s Impact on U.S. Workers,” Economic Policy Institute, December 9, 2013. http://www.epi.org/blog/naftas-impact-workers/; and Robert E. Scott, “Manufacturing Job Loss: Trade, not Productivity, is the Culprit.” Economic Policy Institute, August 11, 2015. http://www.epi.org/publication/manufacturing-job-loss-trade-not-productivity-is-the-culprit/

  110. @Martha There can be no doubt that upstate NY has suffered at the hands of a competitive global economy and ruthless business and consumer demand. That said, NAFTA was hatched under Reagan, negotiated under HW Bush, and signed by Clinton with a majority of Republicans. https://www.washingtonpost.com/news/fact-checker/wp/2016/05/09/history-lesson-more-republicans-than-democrats-supported-nafta/ Many northern jobs moved to southern states before moving out. Today, support for NAFTA is equally mixed both among business and the general public. This is because NAFTA is far more complicated than simply blaming it on Clintonian policy or the Democrats alone. This can be attested to in the last article you cite which states the chief reason for job loss in trade is due to currency manipulation and, principally from China.

  111. The US has the highest level of inequality among developed countries. That means that many people do without basic necessities. There are too many homeless, food insecure, indebted, without medical coverage. The US was great when FDR was in office. He had solutions to many of our problems expressed in his Second Bill of Rights, which was written into law in post WWII countries but not here. To fight Fascism we not only mobilized for war, the top marginal tax rate exceeded 90%, which is why income inequality was not so extreme. It is difficult to tax the rich because they game the system, but that’s where the money is. It is morally right to have a strong social safety net so that everyone has the basics for a dignified life. A high marginal wealth tax would pay for universal health care (including vision, hearing, childcare, and long-term care), free public higher education, supplemented income for displaced workers, and well-maintained infrastructure. That would damp down inequality and make the US a much better place. Electing Bernie would be a good start. Republicans oppose all of this, even now opposing the fight against Fascism. We may have lost WWII. http://gopiswrong.net/

  112. @Robert Vogel Yep, things were great during FDR's time in office. A depression that lasted 10+ years and then WWII. Everyone had no money and then everyone went to fight the war. Things couldn't have been better.

  113. "At the same time, automation, globalization and the decline of manufacturing have decimated well-paying jobs that once required no more than a high school diploma." And it will get worse. College should be free. Not everyone can be an engineer....but kids need a shot to reach their optimum potential.............

  114. @TWShe Said In 1960, California made college free, from Junior Colleges to the University of California. The result is that California boomed!!

  115. @Rick Come Again--California Tuition is not Free--

  116. The Fed conclusion was that high opportunity for skilled workers (which would include New York's dominant financial sector, and also NY's less than dominant tech sector) drives them to hubs and creates inequality. Low opportunity areas (such as the upper mid-west) have less inequality, but less opportunity to go with it. I suspect that markets will figure this out without a governmental intervention. People will come to understand they can live better in Binghamton than Brooklyn with lower income.

  117. But the jobs are in Brooklyn, not Binghamton. You live where your job is.

  118. @Meighan Corbett Unless you telecommute, which is becoming increasingly prevalent in many career fields.

  119. Something neither the article nor the comments mention (unless I missed something): if perceived inequality is a key source of support for right-wing populism, how do we account for the fact that the largest urban centers are most Democratic? Obviously the "working class resentment" argument is too simplistic in this case. At the very least it needs refining.

  120. @Steve Right-wing populism is strong in the fringes of urban centers and rural areas. Right-wingers told the that sector of the electorate that they could get a better "deal" from them. In terms of social issues, they have received what they desired, but on economic issues, I don't think they have. Core urban centers have received better government services and that may be why they're Democratic.

  121. @nedpgh Yes, but the peripheral, fringe areas are not the centers, are they? It may also be the case that urban centers have a higher minority population -- to cite just one significant factor. My point is that it is not only an over-simplified class phenomenon.

  122. Unions. Strong unions would be beneficial.

  123. @M Why? So they can build a resort?

  124. The wage ration of 90th/10th percentile are gross wages. When they are adjusted for taxes and transfers (e.g. child tax credit, earned income tax credit in 2015), the equality is much less. The highly unequal areas of CT, NY, CA are the areas where the combined Federal/State/City income taxes are the highest, with marginal rates around 50% for taxes on high incomes. That is not to say that inequality is not increasing, but there is no need to over-hype it by using the ratios before taxes and transfers.

  125. @Baron95 If anything this whole study and graphic is UNDER-hyped, because those at the top of the income measures pay less overall in taxes, because much of their wealth is not in wages, but in investments other less-taxed forms of wealth, versus lower income data points who have most or all of their wealth in just straight wages. So, your point is invalid.

  126. @Nico Anderson That's not true. higher income earners pay more, almost invariably.

  127. @Maximus Both you and @Nico Anderson's points are valid: recent federal administration tax cuts have given more back to high earners, particularly in states without higher taxes. And higher earners pay more in dollars, yet the percentage paid of their disposable income is considerably less. Considering changes to this national (or international) phenomenon will be extremely challenging.

  128. Something my family doesn't want to acknowledge at all is that more socialist/FDR-like policies help to keep society more equal in status. Small town/rural America hugely benefits from subsidy by the federal government to keep it as an attractive place to stay and invest. When unions are decimated, federal funding is cut, and small towns are forced to burden more costs, they simply can't compete with large urban areas that have infrastructure, universities, and larger tax bases. Small town America advocated for small government and with that comes the death of rural America. That's capitalism for ya.

  129. @Drew What subsidies are small towns getting? Nothing keeps it a good place to invest when there is no market. Since you seem to dislike capitalism, what exactly is your alternative? Did it ever occur to you that people don’t live in small towns because there’s nothing there?

  130. The United States was built mostly by men lacking higher education, because the government gave resources they stole from the Native Americans away for free or nearly for free--land, lumber, minerals, oil etc. That had pretty much wound down by the 1920's, which were artificially boosted by a cut to near zero in the capital gains tax. Then the piper got paid in the depression. The entire process got reset by WWII, when much of the worlds economy was destroyed, leaving the US as the global leader both economically and militarily. China and the Soviet Union were behind "curtains" and did not compete. Now those advantages are long past, there is no reset on the horizon. Globalization, automation have taken hold. That means that uneducated people are in little demand. As time goes by, educated people will be in less demand too. Then see what happens.

  131. @Rick Very good description of the two great advantages of America - the expanding frontier and WW2. Since then we have made political decisions aimed at maximizing creation of wealth without regard to its distribution. The beneficiaries of those decisions primary goal is to perpetuate themselves and their advantages. And now they have the resources to do it.

  132. @Rick I don’t really agree. Many uneducated people in the US have good careers in the skilled trades. The US had a “labor shortage” (meaning, excellent wages for labor and low immigration) for the 1945-1985 period. I don’t think technology and globalization have eliminated the most middle class opportunity in the US. Immigration has. Low unskilled wages have been great for well educated elites and terrible for middle and lower income citizens. The underlying demand for blue collar work in the US remains strong and the wealth to pay for it is immense. But the wages will be low if elites continue to get their way on immigration.

  133. What was different 40 years ago? The author fails to mention the role of unions in raising income for the 90%. As union density (the % of the workforce in unions) has declined, a much larger share of income is going to the top 10& and the top 1%. All gains in productivity have gone to the top. The "good manufacturing jobs" of the past were only good because they were unionized. The service jobs most people are working in now can also be good, if the employees can bargain collectively: retail, hotel, restaurant, hospital, janitorial, home aides, security, delivery, warehouse, etc. The "market" or "forces" decried by the author is the massive inequality in BARGAINING POWER. Big business has nearly all of the power, except when employees have rare educational capital: engineers, coders, lawyers, etc. They have to pay a lot to get these employees. Everyone else has to work for the pay that's offered--and it's low. Congress should pass the Protecting the Right to Organice (PRO) Act. The House Democrats have enough sponsors to pass it, but they haven't. NOW's the time.

  134. @Kraig What industry are you planning to unionize?

  135. @Jackson Preferably all of them.

  136. At the end of the day Unions were crushed by the globalization of business. Greater than 100M new manufacturing workers entered the world labor supply starting in 80’s when there were a total of 30M in USA/Europe combined. You cannot have union workers in Detroit making $70/hr including benefits vs. Chinese or Mexican workers doing similar jobs at $7/hr. This would have ended one way or the other. The only solution is to keep ahead of the others in education, which we have more or less failed to do in the USA. Tariffs are too little too late and only hurt both sides. Eventually the Chinese economy will have and are having higher labor costs and will not be as big a threat. Education is the key to future success in higher cost countries, will we keep up?

  137. Binghamton has far lower inequality than New York City. Binghamton’s median income is approximately $31,000 and NYC’s is approximately $58,000. In other words, NYC residents are far better off than Binghamton residents. The article points out that the lower inequality in Binghamton occurred because high paying jobs left, not because low paying jobs paid more. Inequality is far less important than absolute income, a lesson that every person who has ever experienced socialism understands deeply.

  138. @Shiv "In other words, NYC residents are far better off than Binghamton residents." Playing with statistics are we? What this mans is that many, many more gajillionaires live in Manhattan. In Binghamton a fabulously wealthy soul is an outlier. In sections The Big Apple, they're the norm.

  139. @oogada I made sure to mention the median, not the mean (average) income in both cities. A few high earners don’t affect the median income. So no, I’m not playing with statistics.

  140. @Shiv A few high earners, no. Lots of very high earners, yes.

  141. This doesn't show the half of it. It only measures individual wages. With women's emergence in college and grad school attendance as well as their increased participation in the work force on the higher end (not as much as it should be, I know) the ratio of household incomes could in fact be even greater. Or at least the absolute amount differentials are greater. A negative biproduct of women participating in higher education and the knowledge economy is even more pronounced income inequality.

  142. First of all, as the article points out, those at the 10th percentile are better off by 15%than they were in 1980. To a large degree, it shouldn't matter that others are doing even better. How does it affect me if I am doing better to know that there are other people doing even better than me. The only problem I can see here is envy. Furthermore, the author doesn't ask the question as to why the bottom decile is not improving as quickly as the top decile. Over the last 50 years there has been tremendous downward pressure on wages of unskilled laborers in manufacturing industries. The fact remains, that competitive industries cannot afford to pay an American more money for the same job than they would pay an equally productive Chinese or Indian worker. That is why nearly all of our heavy (and heavily unionized) industries have moved overseas. While most of us benefit from open trade policies that keep prices low, the workers who lost their jobs have not benefited, and those who are still working for low wages are afraid that they too will lose their jobs if they ask for too much. Its time we started proposing policies that recognized this, instead of simply blaming the rich. Otherwise we are gong to face more elections like 2016 and Brexit.

  143. @chip Companies could afford to pay American workers if Americans had not been brainwashed to believe that we are all entitled to cheap clothing, furnishings, toys, etc. And companies have decided that rather than make reasonable profits, they are entitled to humongous profits. Even so-called “designer” clothes with high price tags are as often as not manufactured in developing countries. I have a lot of sympathy for the truly low income folks working multiple jobs to pay for necessities. I have less for those who bemoan wage stagnation while checking FB on the latest Iphone. And just to be clear, I am not a highly paid corporate attorney.

  144. Look up the price of a quality American made dress shirt (starts around $150) or shoes (starts around $250) and you will see that even many upper-middle class Americans cannot afford these prices.

  145. For a change, a balanced article in *tone* as well as content. Who but an unrestrained capitalist cannot agree with the concerns raised in this article? And an unrestrained capitalist should consider, if he or she has a working pair of eyes, the practical effect on quality of life even for himself or herself, when such chasms, nay canyons, result? Homelessness on a Dickensian scale, urban blight, and so much more. An entire capitalistic economy works better when all are employed and employable, and all can afford at least basics. I don't have answers, but I do see that tying overall housing value in a region to the highest incomes *will* make housing unaffordable for many. I support ceilings on rent.

  146. This is all the result of globalization. The labor pool has expanded by billions of people and somehow it is a mystery why wages have changed? A global economy means larger markets and greater profits, but it also means larger labor markets and more people competing for jobs.

  147. @Kohl The way we've handled globalization has been lousy. But globalization itself, the increasingly rapid interconnection of people, products, and ideas is unavoidable. Improving how we regulate that interaction is critical.

  148. @Oscar I could not agree with you more. Unfortunately, I don’t necessarily know what we could be doing to better handle it.

  149. In a socio economic system wherein the greatest rewards flow to the most valued professions, income and wealth inequality will follow. See the 11/2019 issue of Scientific America article entitled "Is Inequality Inevitable?" for the mathematical model which basically concludes, "yes, it is." So the issue is not whether inequality is an outcome of regulated market capitalism. It is. It always will be. Since regulated market capitalism has proven to be the most powerful means of raising quality of life for the most people in the shortest time, we better get used to it. Unless we want to experiment with Soviet or Mao-era communist economics. The issue is what, if any redistribution of the wealth created by regulated market capitalism is necessary to yield a quality of life to the critical mass of people needed to keep the locale, country progressing. To keep people optimistic that the whole system works for them even if some people make out a whole lot better than others. There's a clear message to the middle and working classes in the reality of the market economy. Value getting a good education and hold yourself accountable for giving it your best shot. Just as not everybody could play roundball like Dr J, not everybody is going to prosper in our socio-economic system. Oh, by the way, as artificial intelligence, robotics and other technologies mature even as their capabilities increase, the issue will only get thornier. At least education is portable.

  150. @TDurk “Since regulated market capitalism has proven to be the most powerful means of raising quality of life for the most people in the shortest time” Beg to differ. There are many counter examples — e.g., both Cuba and China are counterpoints, for different reasons. Plus, capitalism even with some regulation has still produced massive inequality, poverty, and widespread hunger. That was true in the U.S. and only partly ameliorated by social welfare programs. The choice is NOT between regulated market capitalism (that ship sailed a long time ago as the power elite and billionaire class captured government) and Soviet or Mao-era communism. That’s your ideology speaking. There aren’t many other options. Open up your mind to a greater range of choices. What we need is European style social democracy and a more worker-centered economy — or, even, *democratic* socialism.

  151. When I lived in San Francisco from 1982-1988, there were working class and middle class neighborhoods in addition to the wealthy areas. Now, the entire city (and areas surrounding the city) is inhabited by the extremely rich. What I don’t understand is where do the working/middle income people live? Where do The dishwashers, waitresses, and baristas live without two hour commutes? Pretty soon residents of San Francisco will be delivering their own meals and washing their own dishes at restaurants, making their own coffee, and policing their own neighborhoods.

  152. Or could it be that they’ll be doing their own shopping, cooking their on meals, and making their own coffee?

  153. I suspect the inequality is greater than depicted for two reasons. First the data analyzed do not include incomes for the top few percentiles according to the notes at the end of the researchers report. They have seen the largest increases in income over the past several decades. Secondly, the researchers appear to be using before tax income, which does not control for the fact that due to the myriad federal income tax cuts since the 80's the top ten percent of income earners after tax income has increased much more dramatically than other income earners. These other earners have seen much more modest increases in after tax income due to tax cuts, while at the same time experiencing a dramatic increase in social security tax withholding during the 80's which for many earners have wiped out the gains from income tax cuts.

  154. There is an article in this month’s Economist that makes exactly the opposite claim, that inequality is actually much lower.

  155. @Susan Is the Economist referencing the same data set?

  156. One result in Philadelphia, we have 86,000 more women than men. I see those fine young republican boys just racing in to scoop them up.

  157. Good ole’ trickle down economics!

  158. Many well off professionals I know in Seattle complain bitterly about the homeless here, maybe not realizing that their high salaries are part of the problem. It's obvious by now that the income of the upper 10% are driving higher costs in the big cities, as they bid up real estate and other goods. Meanwhile, the price of real estate, health care and education are forcing the middle class to borrow more and more, and forcing the folks at the bottom, who may also have mental health and addiction challenges, out onto the streets. It's also become obvious to many of us that the real solution lies in progressive programs like universal health care, student loan forgiveness, and subsidized education, paid for by higher taxes on the upper 10%. The current trend is unsustainable and politically dangerous, and may lead to the election of more autocrats like Trump, not to mention increased suffering for millions of Americans.

  159. Kurt Vonnegut May have been into something with Harrison Bergeron. Perhaps the more productive members of highly productive clusters should be made to be less productive. Seriously....what are we saying when the data suggest an a) birds of a feather problem, and b) especially hard working (maybe even over achieving) birds? Are we saying the new increment from clustering is taxable to remedy the inequities? Are we saying we should prevent clustering? Are we saying clusters should change their admissions criteria?

  160. You have now convinced me more than ever that Democrats do not know how to run cities. Why would I want them to run the country?

  161. @RMM Have you looked at rural America lately? Wage and job growth are minuscule. Hospitals close because they are not economically sustainable, and meth and opioid addiction are ravaging communities. Young people can't leave these areas fast enough. Most of these communities have Republican mayors, council members, sheriffs and state legislators. Why would I want them to run the country?

  162. Cities are doing just fine, thank you very much. It is rural areas that are in deep trouble.

  163. fine for whom, Susan? The rampant homeless relieving themselves on the streets of California's major cities?

  164. What was different 40 years ago? There were not 15M+ low-skilled undocumented immigrants living in our large cities — most with low wages while driving down the pay of low-skilled Americans

  165. @Dr. John, Not many want to acknowledge that what happened during the 1980's and until the present, is that we have had massive immigration, most of it illegal swamping our cities, causing loss of jobs for the working poor, housing shortages are astronomical, Americans are being pushed to the streets and to drug addiction by our inept political class. Nancy et. al. did that to us.

  166. @JRS There are not many willing to acknowledge what happened because it is simply not as you suggest. There is no evidence that immigrants have done anything other than fill jobs most Americans don't want (including the homeless drug addicts whom immigrants also walk past on their own way to work, which are another problem entirely) and to fill demand while providing valuable growth necessary to our economy. Low skill, low wage jobs will always exist and, with today's economy, many still remain unfilled. The housing shortage is due to changes in our economy resulting from too many businesses and, ultimately, the workers they hire trying to function in limited places.

  167. @Dr. John Don't know where you got 15M+. Most data show 12M or less, and not all are unskilled.

  168. San Jose is right up there. It's suffering as a result, as a 30 year resident, I will retire elsewhere. 🇺🇸

  169. This analysis obscures major facts. 1. Salaries for people who have real skills and actually provide value -- engineers, doctors, teachers, nurses -- have not really gone up in real dollars. 2. Salaries for blue collar people who have real and valuable skills but do not require college degrees -- mechanics, janitors, line cooks, farm hands -- have fallen through the floor in real dollar terms. 3. Salaries for the parasites -- MBA's, economists, bankers, talking heads and political pundits, have gone through the roof.

  170. @whaddoino Right on! Krugman likes to point out that when the financial industry was sane (35+ years ago) it accounted for only a small fraction of GDP - like 5% or less. Now it’s way over that - probably more than 20%. What did that get us, aside from the meltdown of 2008? Parasites indeed

  171. So this is supposed to make me support socialism where everyone is equally poor with a a loss of rights? We are free to make choices in life and what types of jobs we want. My neighbor wants less stress with more time off. To each their own. People in countries all over the world would love to have the choices & opportunities we have. Look at wealth distribution in socialist and dictatorships between their leaders & commoners. They don’t have a middle class.

  172. @JOSEPH The USA doesn't have much of a middle class, and there are a whole bunch of people from around the world who realize a country with such great resources that has no paid maternity leave, no free education, low taxes on the rich, for-profit healthcare, etc, is not the place to be a human being.

  173. @JOSEPH Lowering the inequality gap is not Socialism. European countries are capitalist but nevertheless have subsidized universal healthcare, free education, etc. Dictatorships are usually not socialist, save China, which has a booming capitalist class.

  174. @Kathy Barker I don’t think many of the regions you are mentioning are doing super hot economically. Much of Europe seems pretty stagnant IMO with its 1% growth... Meanwhile the developing countries are dramatically improving people’s quality of life and in coming decades could be dictating trade terms etc to these European powers. Can you imagine people in south-east Asia taking the whole month of august off???

  175. Reality Check the problem go all way back to NAFTA . Allowed our government to use tax money to purchase imports. Congress is still in denial trying to improve NAFTA so government has zero accountabity an corperate america can export last of jobs pay living wage. Even the 2008 crash actaully caused by NAFTA . Great Deception.

  176. “In these places, inequality and economic growth now go hand in hand.” That might have been Karl Marx writing about the inherent contradictions of capitalism in the 19th Century.

  177. @Rod That's right. And something needs to be done about it.

  178. How did the American unions prevent millions of US manufacturing jobs being moved to other countries?

  179. "In effect, something we often think of as undesirable (high inequality) has been a signal of something positive in big cities (a strong economy). " This is the problem. Its economists, and its economics pundits. In many ways its you. What do you mean "strong economy"? An economy where 90% of the people find themselves in worse and worse economic condition? An economy where some become ungodly rich by scamming everyone else, where financial institutions are less concerned about their status as institutions and more about reporting mega-profit every quarter? An economy eating its young, concentrating resources in flabby white hands that dump it into moldering Caribbean cellars where it does no-one good? An economy where the paper of record makes a healthy hunk of its bread selling $5,000 pocket books? An economy that makes millionaires of legislators who pass legislation favoring the rich and corporate, soaking everyone else to cover the shortfall, cutting every kind of social support to make up the deficit? An economy where sober media report with excited giggles the advent of "poor guy doors" in sparkling new condos, designed to spare the rich the sight of people they routinely impoverish? An economy eating its seed corn, refusing to support, oh, education and healthcare for the "children who are our future"? An economy that denies its age of greatest innovation and economic progress was an age of 90% tax rates and powerful unions? Sounds sick to me.

  180. Focusing on taxable income does not really represent what matters more, consumption of goods and services. In New York, consumption of goods and services is quite high for all people, emphatically including many of those in poverty as defined by taxable income. With that said, inequality has two major factors driving it. The success of high performing people (and to a lesser extent, their heirs) on the high end and an abundance of unskilled immigration on the low end, pushing the low end lower. Certain constituencies prize either or both of these phenomena, meaning that this is not necessarily bad news in the first place.

  181. @rjs7777 It seems to me one thing left out by both you and the article is the inequality created by investors, especially those at the tippy top. They may be skilled (or their brokers are), but are not wage earners. And your implication that the bottom wage earners are unskilled immigrants is either prejudicial or myopic.

  182. Generally speaking I have no problems with eating/soaking The Rich, but I fail to see how such mproves the job/life prospects of those being left behind. Since the advent of the Industrial Revolution it's been ever thus...

  183. How could this be I thought our big cities were becoming more progressive and democratic, yet they are dominated by the wealthy who chose not to live with the poor. So interesting

  184. @EAH The interesting thing is, it is the “socially conscious “ millenials who are shattering the cities through gentrification, with the weak excuse those residing in cities for generations are “making a profit” in millenials eyes by being forced out.

  185. Why should there be equality? I lived with below poverty wages for 7 years to get myself through a PhD program. now I earn over 150k per year. Why would I expect everyone to get a great income regardless of how hard they worked? Those well paying jobs available to anyone that graduated high school dont exist anymore. Be ready to work hard and smart and you can get wealthy.

  186. @George Then you're lucky, because at the end of seven years your field hadn't become obsolete and there wasn't a glut of PHds in your field entering the job market. In the mid 20th century there were relatively few people with law degrees, which resulted in family-wage earnings for white males born before 1940. Then baby boomers flooded into law schools and entered a job market that didn't have enough demand for them. During the early 1980s recession, a lot of people majored in programming and graduated in time for Cobol skills to be fairly useless. By the time someone graduates with a four to seven year degree, the market has moved on to new skills. This trend hasn't affected me, but I do keep encountering people who have lived this reality. As for main point of this article , the author hasn't argued the extreme position of absolute equality. The point is history shows how inequality results in rebellion eventually.

  187. @George There should not be equality. If you are smarter and cleverer than most people you should earn more.

  188. @John France prior to 1789 is calling you.

  189. Equality cannot be a goal in itself. In all the universe, one must go down to the level of sub-atomic particles to find entities that are absolutely the same.. As soon as things combine, differences appear. A government that tries to enforce equality among its citizens will become a tyranny. The government's role is to curb dishonesty and to ensure that each is given the opportunity to develop to the best of his ability. If each person achieves this development, happiness and satisfaction will follow, no matter what the differences in people's attainments.

  190. @David S. Hodes, MD Sorry, David, that is a bit of magical thinking. Equality can be a goal, more equality in pay can be a goal. Or don't use the word equality religiously. Each person does NOT have the opportunity to develop because some people are considered to be more deserving than others, and are paid less, are restricted from health care, have no jobs in their areas, etc. A government that permits some people to have too much (yes, too much) money, education, training to the detriment and exclusion of others is a tyranny to all except those who are profiting.

  191. Then what is the point of success? I six years younger than the man who owns the company I have worked at for 40 years. My grandfather had a sixth grade education, my father a ninth grade education. I grew up in Queens in the bad old days of the 1970’s and hold a public high school diploma and an Honorable Discharge. My boss’ family owned and operated a number of successful businesses as he was growing up; his father was very entrepreneurial and his mother was a college professor. He attended top notch Long Island schools followed by an MBA from NYU. He has put his two sins and five grandchildren through Ivys at full price. It is beyond absurd to think that our experiences, education, opportunities or lives would be anything alike.

  192. With such a logic, the FDR new deal would never have happened. Quit this kind of short sighted “morally based” political thinking and recognise that there are larger forces at play and that, basically, massive inequality is becoming in itself a theat to true free markets and an impediment to a meritocratic society. And if you don’t, accept that the Trump era is really just the beginning.

  193. There's also the reality of supply and demand in the labor force. Numerous jobs that previously required a high school diploma now require a college degree just because they can.

  194. Reinvigorating antitrust laws would help, no doubt, in slowing inequality, but the best place to combat these problems is with the tax code. The tax code could, in one for instance, make wages above a certain level -- say four times the wages paid to unskilled workers -- not deductible, forcing companies to take that portion of salaries directly from profit. There are hundreds of other similar-type changes that would alter the behavior of corporate executives to avoid harming the bottom line.

  195. So why do we continue to allow those who control capital to be our economic dictators? It’s not their money they’re investing, it’s ours, our collective savings and pension funds. Shouldn’t we be requiring regional balance in capital distribution instead of letting states and municipalities be extorted in order to get job generating investment?

  196. The “tax someone else but not me” mantra will not work when high-wage income, middle class professionals realize they’ll pay more in social security taxes than they’ll ever receive in social security benefits, while others will not have their entire “incomes” subject to social security taxes because they’re unearned income investments, inheritances, and pass throughs are not “wages,” per se.

  197. @PMD A small increase in FICA might be justified without complaint since fewer than half of all middle income Americans own life insurance, given that Social Security is also disability insurance, and the extent to which you will receive what you pay in (like each day of life) is not guaranteed. Meanwhile, as you suggest, we might look to other areas of tax law that are more inequitable and change them.

  198. It gets pretty obvious after a while that economists like Mr Manduca have never worked in tech and so attribute increasing wage inequality to phantom inequities or bad policies rather than what's actually happening. What's actually happening is that leverage in the form or productivity and reach in tech has made skilled jobs in those fields much more valuable. Since demand outstrips the supply of savvy workers in tech, wages have risen based on the increased leverage - worth - on an hour's wages. 50 years ago which I started in tech, it took a week just to write a small program. Now the same program can be written in hour or two. I think that makes an hour of labor worth 40 times as much. So, while my starting salary was 8K per year software engineers make 15 times that (you have to compensate for 5x inflation) today reflecting productivity and the reach (leverage) of the applications that they write. You'd see that if you worked in the field for as long as I have. Honestly if you want to fix inequality, rather than making the tax code more complex, just eliminate all deductions and set the progressive rates to yield some amount relative to GDP. All those deductions do nothing but act as subsidies to rich people. Given the overall complexity of the tax code, no one really even TRULY knows what the inequality situation in terms of wealth actually is. The distortions created are huge. Huge.

  199. This article shows how hard it is to understand a complex phenomenon. Part of the growth in inequality is because wealthier people are choosing to live in cities rather than to move to the suburbs. 30 years ago an upper middle class income earner would move to the suburbs to raise a family, which compressed inequality in the City while producing greater inequality in the suburbs. Those same folks now live in the City, with corresponding inequality effects per the article. Moreover, the rise of the two-income family exacerbates inequality. "Assortative mating" means that the family is more likely to consist of 2 MDs rather than one MD and (his) secretary or nurse. We ought to concentrate on increasing opportunity for all ahead of redistribution for its own sake.

  200. Yes, and your example shows how a (negative) freedom leads to inequality. Unless we mandate that MDs can no longer marry other MDs. Wages and (highly paid) wives drive inequality. This is the paradox as equality at the level of marriage drives inequality. Que the rebuttal about billionaires in the US of which there are less than 600.

  201. So, shouldn't we focus on educating more engineers (and all other highly skilled workers), to increase their supply? And, the more engineers we have the smaller the supply of line cooks, no? Assuming a constant demand for each category, shouldn't their price (wage) converge? Again, a focus on developing human capital in the form of educational investment is the answer!

  202. Its all about greed and callousness.

  203. Hey gang! Remember when De Blasio lectured us that inequality was "the defining challenge of our time"? And remember when he took bold steps to meet that challenge? We got a higher minimum wage, universal pre-K, all-in on 'affordable housing.' And the results are in! "inequality is widening to new extremes. So, you know what our oh-so-smart Progressives are going to do now? Admit they haven't got a clue? Don't be absurd: they will double down and try to cram more of the same down our throats by way of picking our pockets ever cleaner. What's that definition of insanity again? Doing the same thing...

  204. @HMI A "higher" minimum wage is still...minimum and it doesn't do anything to offset the real estate lobby, which is not exactly a friend of "affordable" housing. And pre-k would take about 20 years to really see results. So your idea of "the results" is a little skewed....to say the least.

  205. @RH De Blasio, like his ilk for the past 55 years, imagines himself engaged in some kind of a "war on poverty," whose most striking feature is that however many programs established, however many billions, or trillions are mandated to fund them, actual success is a permanently receding goal. This administration it's the minimum wage and 'affordable housing' (of which barely anything has been built over 5 years). And right on cue we get RH harrumphing that 'surely you can't expect results yet..." Whereas the one sure thing we know is that we can expect results...never. Not that that will cause our True Believer Progressives even to blink.

  206. It is eerie how Kurt Vonnegut’s dystopian novel, “Player Piano,” so closely parallels the phenomena described in this article. Player Piano is first a novel; it is not a prediction. But Vonnegut was able to describe this situation some forty years ago. Wake up!?

  207. Your calculations leave out a big part of the mix: huge numbers of poorly paid immigrants. They are also often here illegally, which, means they are less likely to complain or launch legal action. It's those same immigrants who make life possible for the top tier in terms of child care, housekeeping, food delivery, and a host of other things.

  208. Robert Frank already diagnosed this in "The Winner Take All Society,' "The Darwin Economy," and "Success and Luck: The Myth of Meritocracy." His most famous and impactful of these ("Winner Take All Society") was written almost 3 decades ago, so this has been old news for quite some time. It's only worshipful clinging to neoliberalism, and the intellectual and cultural inertia of sheer mental and moral laziness combined with the calcification of these doctrines in institutions and institutional practice, policy and custom, that prevents and remediation of this. I won't rehash Frank's arguments, but another worthy critique appeared in Harvard Business Review (of all places), called "Runaway Capitalism." Basically, its authors contended that "competition' and "return on investment" had pushed aside all other moral values and priorities, causing a morally dubious but "turbocharged" (to use a McKinsey & co. term for their Oxycontin promotion scheme) economic efficiency.

  209. Big Bob Frank fan here. Tell me critic of neoliberalism, what MBA program does he teach economics to?

  210. @JJ Cornell. Kudos to you on your appreciation of such a vital, important, insightful, wise analyst and critic of our system, very big warts and all!

  211. Envy is at the root of the preoccupation with inequality. It is one of the worst of human failings as it creates personal unhappiness, blocks spiritual growth, and motivates theft murder and destruction — Often on massive historical scale. If you really care much about inequality, then you have a personal character and spiritual problem. Equality is absolutely opposed to freedom. I don’t care much about stuff and actively reject ownership of the ordinary objects of middle class life. I have given away far more stuff then I have kept because that is the way I want to live. I feel no ambition to work more than the few hours a week now that are needed to meet my basic needs. Others with many times more feel driven to work harder to gain more. They create the infrastructure of a dynamic economy which allows me to live the unambitious simple life that I have come to prefer. The apostles of equality would destroy the freedom of one or both of us to spend our one life here living by the values that we each individually choose for ourselves.

  212. Unfortunately, the “choice” to live modestly but comfortably is precisely what is disappearing : i.e. the middle class. Such massive inequality has rotted out the middle precisely, a space where one does not starve or go homeless but also does not have a yacht or SUV. The opportunities to earn a dignified subsistence living with some perks or luxuries and especially the luxuries of time and healthcare are shrinking. What appears as a lifestyle choice to you is actually the middle class American dream in a nutshell. Reducing envy has nothing to do with restoring a middle class.

  213. @KBronson: with such a morally based worldview, there would never have been a FDR and a new deal. Quit your simplistic thinking and recognise that there are bigger forces at play here and that, yes, economic change accentuate economic outcome in a manner that has nothing to do with personal merit. A lot of the time, it really is just down to luck, birth, personal charm and family connections.

  214. @R. Certainly luck is much of the determinate of outcome but so what? In fact I think it is most of the determinant. What is personal merit anyway? If I am smarter than my brother did I decide to be brighter? Did he decide to be dull? Of course not. But so what. I believe that we should treat all people with kindness and tolerance and personal respect and if a man has that and his basic needs met, what difference does it make how much more anyone else has? Envy is evil and destructive and is at the root of the desire for equality. Equality is not found in nature. By the throw of the dice we are all unequal. Accepting such banalities is the essence of maturity. Respecting people also means respecting their freedom to be what they are and live with the life that makes for them short of the point of leaving those incapable of meeting basic needs to perish of want.

  215. Tech companies are struggling to hire the people they need. Naturally, high salary becomes part of the lure. If they don't offer that, they can't get anybody. Further, start-ups can't pay as well as Google and Amazon, who maintain large offices in affluent cities. So what are we to do? Ban these giants from opening offices in these cities? Put a cap on salaries to level the playing field for the companies? What?

  216. @Myasara Invest in the communities that foster your success. A struggling mental health hospital is in San Jose just steps from the space-age campuses and on-site chefs of Apple, Facebook, Microsoft, and LinkedIn. If you can't figure out what to do with $150 billion in cash, get out of the cafeteria and walk around during your lunches. If you are an innovator and well-capitalized, maybe you should be the one solving some problems.

  217. This does look like the old story of feudalistic cultures moving wealth to a few who rationalize their fortunes as the right of royalty. Of course, the increasing disparity of wealth eventually results in an overthrow of the ruling class. The question is, "will our democracy be a vehicle for change, or not?" If not, then the next question will be, "when and how will the ruling class be removed from power?" Stay tuned.......

  218. Growing inequality is not only a US phenomenon. It’s everywhere in the developed world. It is in England, France, Germany, Japan, Canada, etc too. What makes it more extreme in the US is the lack of a solid medicare for all system - one that basically does not depend on keeping a job with good benefits - and the economic stress caused to the middle class, one catastrophic illness or incident away from personal bankruptcy and homelessness. Credit to Elizabeth Warren for her singular focus on retail finance regulations, personal bankruptcy regimes and retail lending predatory practices. And shame on Joe Biden, masquerading as a friend of the working class whilst consistently endorsing policies proposed by credit card and specialised finance policies: since 2005, in personal bankruptcy, credit card debts is given priority to alimony. Guess what the impact is on millions of mostly black single mothers. I hope Warren or Sanders make it past the so-called moderate who are really just economic republicans.

  219. 42% of U.S. workers earn less than $15 per hour. 68% of the U.S. economy consists of consumer spending. If you want to see a booming economy, give that 42% a raise.

  220. @Zep You got it! Also cut the top salaries of the corporate CEOs who make more than 400 times that the average worker. And break Amazon, Google, Facebook and the large pharmaceutic companies.

  221. @Susan ...I worked in research for a large pharmaceutical company. Small pharmaceutical companies by their very nature will be less successful in providing innovative new drugs because they lack the broad spectrum of science and scientists that nurture cross fertilization of ideas. Now your idea of doing something about CEO compensation is an excellent idea. Believe me, when it comes to a major pharmaceutic company CEOs are not innovators, and if an executive secretary ran the company for six months nobody could tell the difference.

  222. @W.A. Spitzer I too am a career pharmaceutical professional/scientist and I wholeheartedly disagree with your statement. How much time have you spent with executive leadership? It's easy to judge from the outside. Six months? The competitive advantage that biopharma must maintain has a much longer shelf life. A company's board needs to be thinking and making decisions to benefit for years, not months. Small pharmas are the scientific method in business form. They have a hypotheses for new treatments and they borrow money to develop and test them. More often than not the treatments fail to have a positive effect on human trials, but not because the pharmas lack "cross-fertilization" of ideas (in fact any such company that lacks the right talent spectrum to implement its ideas has a terrible CEO).

  223. There’s inequality everywhere. Who decreed life had to be equal or fair?

  224. Nobody decreed it, and there always has been and always will be inequality. But when the degree of inequality becomes extreme, those at the bottom are unlikely to remain complacent. Narrowing the extreme gap is only logical, if one wants to maintain a stable society.

  225. By all means, allow the corporate crooks to rig the game. And don’t forget to massively reward criminal politicians. Human rights, who needs that? Life was a great deal more fair when there were more unions, higher tax rates for the wealthy, lack of obscene CEO salaries, and lack of microsecond crooked insider trading. Fair? In this era? Oh no, just keep up the fantasy that the wealthy actually earned the no taxes level of nonsense.

  226. The problem you see is that capitalism fails to reward the best people while deifying the unconscionable.

  227. " . . . this economy values an engineer so much more than a line cook." This is not the reason that an engineer makes more than a line cook. The reason is that there are lots of people who can do the job of a line cook, but relatively few who can do the job of an engineer.

  228. @Colin Barnett It is the same with sports. Few can do it and they're paid handsomely. But one difference. Truly creative engineers can be compared to athletes, while the bulk of engineers, and other tech folk are just routine. Our system, however, doesn't do enough to broaden the availability to learn these routine skills, keeping the wages high.

  229. Sports figures are highly paid for the amusement they provide to some and the vicarious pleasure they give to others whose athletic prowess is not up to par. Plus, it's exhilarating to root for a team. I guess. Athletes are right up there with TV personalities. Teachers, nurses, sanitation men, engineers, and others who provide real services -- well.

  230. @B. There are 5,000 professional athletes in the country with a median income of $47,000. Contrary to popular belief, not all of them are millionaires. Those five thousand are the best, most hardworking of the millions who compete and don't make, and yet only a small percentage are handsomely rewarded. What do the best... doctors (n = 1.1 million, median = $180,000), teachers (n = 3.6 million, median = $60,000), engineers (n = 1.6 million, median $90,000) ...earn when they reach the 5,000 best in the country? I bet their median is better than that of professional athletes by a landslide.

  231. The biggest problem with worsening economic inequality and lack of economic mobility isn't unfairness, but social unrest. Arguably, the success of candidates like both Trump and Bernie Sanders in 2016, both of whom were essentially protest candidates against the status quo, should be a warning to all of us of what is to come if this isn't addressed.

  232. @Middleman MD Bernie Sanders' strong showing in 2016 is a "warning to all" of what's coming? Let's consider what Bernie Sanders wants to: impose sharply higher marginal tax rates on the wealthy (like those we had 50 years ago) in order to help fund universal healthcare (as is enjoyed by every developed country on the planet), fund free college tuition at our public universities (as is the norm in most developed countries), fund infrastructure development (to put it back on a par with European and Asian economies), raise the minimum wage and restore union rights. How in the world is that in any way threatening? How in the world does Bernie Sanders' care for the working man scare you?

  233. @Sean I don't think Middleman MD stated or implied that Bernie was a threat. Bernie's broad appeal, however, is a good indication of broad based discontent due to inequality. Not acknowledging or addressing the concerns of Bernie's supporters lost a presidential election for the democratic establishment in 2016.

  234. @Sean Minimum wage laws ALWAYS cause the poorest and newest worked to lose their jobs. There are many workers who can't always produce enough profit for companies to justify $15 an hour plus benefits and taxes, and those people pay the price for a few to earn a wage level imposed from the gov't. When your solution to anything means more decisions will be made in government offices, you just gave people you can't trust more power than they can handle. Hello, Venezuela.

  235. There are other trends that will be at play here... As the big metro areas increase in population of the highly paid workers, they are, de facto, not highly paid so much when their cost of living is so high. Making $200k/year and living in your van in the Bay Area just makes you "rich and homeless". Economic stresses like that cause 3 eventual corrective actions: 1) flight to smaller, but tech savvy, cities - both at the corporate level and worker level. 2) Changes in where work is conducted. Working from home is growing more and more. 3) Improvements in IT infrastructure in less developed areas. As an example, my wife and I lived in the Albany area. I am a contractor working in avionics in Connecticut, so I didn't (and still don't) work near home. We decided to move to exurban Missouri to lower our cost of living. Together, we are making about $200k/year, but she works from home as an IT manager, but I only owe 27k$ on my 1000 sq ft home on an acre. Compared to my neighbors, we are doing well, but this is all possible because of her employer (a nationally known health insurer) is fine with work teams spread across the country and because we have high speed Internet in a rural area. She and I are lucky and ahead of the curve a bit, but more working situations will be like ours in the years to come and this will "equalize the distribution of inequality" over time.

  236. @VJR You're lucky? But you're living in exurban Missouri.

  237. @PeteG I am in the STL metro area. It's very civilized.

  238. Inequality wouldn't matter if the basics were available to everyone at a median price, no increases allowed because of the demand curve. We all get the same shot at a short commute; a world class education; etc. Having a lot of money means that you can have a shorter commute if you work downtown and afford a great school for your child. It's those things where inequality hurts and is felt the most. Most of us don't care that some rich couple has a 200 foot yacht.

  239. An equal society is neither possible nor desirable, so the current belief that income inequality by itself is a problem in need of a solution is misguided. This said, there are several problems with extreme income inequality in metro areas that impact the fabric of the city life. I live in the Bay Area and I can see the beautiful city of San Francisco basically divided between world-class areas with great food, shopping, lifestyle and so on, and between junkies-infested slums. A city requires a unified identity in order to function. The plague of homelessness is only one indicator of the city being ripped apart at the seams. Perhaps one solution is subsidized housing for those who actually work in the city and who are necessary for its daily functioning, such as teachers, waiters and so on. For the rest, living in a metro area is not a birthright.

  240. @Mor It's unclear what you even mean by 'an equal society' or who you think is advocating that. The point to many of us is that a society in which the top percent, or tenth of a percent, is absorbing a a hugely disproportionate amount of the wealth and resources is not sustainable and is morally reprehensible. And those who believe that the inequitable distribution of wealth in society these days is premised upon the merit of those at the top of the distribution simply haven't been paying much attention to how those people comport themselves and just what the value of their 'contributions' is. I've lived in the Bay Area off and on over the last four and a half decades and what I see in those self-described elites of finance and tech is a lot of rank, self-serving, consumerist parasitism which, to the extent that it serves anything at all, largely serves the interests of the already well off.

  241. @richard this is the kind of rhetoric that always sets my teeth on edge because it is informed by virtue-signaling and cheap moralizing rather than by facts and critical thinking. What do you mean by “disproportionate”? What is the proper gap between the rich and the poor? And who decides? The government? Well, even the most superficial acquaintance with the history of the last 200 years will show that any attempt at enforcing equality of income inevitably results in horrifying bloodshed. The Great Terror, the Cultural Revolution, Cambodia are what happens when the government, inspired by the notions of equality and justice, enforces its ideology upon a country. Are you saying that the technological innovations that have transformed our lives and expanded the boundaries of human knowledge are not worthy of reward unless the inventor “comports” themselves in accordance with your idea of virtue? And what should individual effort “serve” if not the individual himself or herself? Now, it is possible to argue that the poor need more help. Sure, I agree. But this article is not about how to uplift the poor. It is about how to bring down the rich.

  242. @Mor One can make the argument that its when inequality reaches extremes that bloodshed inevitably results - Alexandria long ago, the French Revolution, and so on. The "technological innovations that have transformed our lives and expanded the boundaries of human knowledge" are worthy of reward, but for everyone, as everyone has participated in its creation. It's "virtue signaling" on the part of the "Masters of the Universe" that only certain individuals should be rewarded, specifically those who own the means that such innovations are produced. If this fundamental imbalance remains unaddressed, I fear the bloodshed to come.

  243. I really wish people didn't think that just because it's possible to make data charts animated that this is a good idea. It is almost never a good idea, because that makes it impossible to gaze carefully at the data and absorb what you are looking at. It is very easy, on the other hand, to draw an arrow from one data point to another, obviating the need to move them around. And displaying earlier data in one color and later data in another color makes it very easy to distinguish which is which.

  244. @polymath I agree! You can get static graphs via the link embedded within the sentence ... "This chart, using data from a recent analysis by Jaison Abel and Richard Deitz of the New York Fed, captures several dynamics that have remade the U.S. economy since 1980."

  245. If you believe a city can really work without nurses, teachers, college faculty, firefighters, police officers, drivers, cleaners, waste removers, trades, cooks, childcare (and the vast majority of American jobs) then we can continue to build cities for the benefit of the wealthy. Many American cities are choking from decades of unbalanced growth. Initiatives to build mid-range housing and functional transportation to fill the gaps have failed. Commutes are long; congestion is fatal, and people are looking at options for housing. We love cities for rich culture and easy access to services. Is a city a city without the people who make the wheels turn?

  246. The income inequality problem isn't engineers and lawyers vs cooks. It's people who have investment income that pays them more without working than a lawyer makes working. It's people who have more money than they could spend in several lifetimes buying their political representatives to skew the system even more in their favor. This has included cutting back various kinds of assistance for the bottom 10%, making the problem worse.

  247. @mtbspd - - What you missed back at school was that EVERY dime that people have to invest today was originally taxed at the full rate for that city, state, and country. Before you reflexively moan over how the rich stay rich, remember that the Forbes 400 list of richest Americans is 92% replaced with new names every decade.

  248. @L osservatore Most of the biggest fortunes has been through three or four or five or more 1031 exchanges since that money was taxed, or are other forms of capital gains that have never been taxed, or were inherited through a structure that successfully avoided significant taxes. So, no, "every dime that people have to invest today" was not taxed. It was the great great grand daddy of those dimes that were taxed. Only about 1/3 of the Forbes 400 started out middle class or lower. About 1/4 are inherited wealth, or got a significant inheritance. However, the Forbes 400 are an exception, with significantly more wealth than the typical 1/10 of 1% chump.

  249. The wealthy town of Fairfield is next to the urban center of Bridgeport - previously referred as 'the armpit of Fairfield County' by Paul Newman. The factory infrastructure has abandoned Bridgeport, leaving behind a devastated community of homes owned by absentee landlords along with struggling schools, the majority attended by minorities. I teach in one of them.

  250. Why are the schools struggling? The tax base disappeared when the corporations left? And obviously, the old factory jobs disappeared, but that was a while ago.

  251. I like how the middle of the article sound unbiased and questions whether high paying jobs growing inequality is bad or not. Then for the rest of the article, it basically says that this is in actuality, bad.

  252. Normally, logically, inequality leads to an armed revolution. What for this one?

  253. In the post-Elizabeth Warren/Bernie Sanders world, the press has become enamoured with the idea that inequity (the choice of the word is even inflammatory) is evil. Instead, it is a marker of what is economically valued and a guide post for economic achievement (if you care about those things). NYC and Washington are far better cities (crime, living conditions, etc) in their current state than when I was growing up. NYC was a crime ridden armpit in the 70's and DC the same. Instead of policies and opinions which denigrate achievement and try and create and equal forest by cutting down the tops of trees, the press should rename the term - equitable distribution of earnings .

  254. It is a shame that economic growth has been concentrated in large cities to the detriment of smaller ones. This may spell doom for certain areas, but not people. People can relocate. The idea of moving to a place with better economic prospects is as old as the country itself. It is why immigrants have come to the U.S. It is why I left my home town to attend college, then moved again for grad school, then moved again to take a job. Along the way I have sacrificed friends, family and community. These are terrible costs. But the problem of regional economic disparity should be seen as one that imposes high costs on almost everyone (unless you were raised in a job center city) - either you sacrifice your community or your job prospects. It is incorrect to say that it "excludes" anyone.

  255. The article, and its associated comments, ignore the root of increasing inequality in the United States, and to a lesser degree other rich countries: the dissolution of progressive taxation. As Saenz and Zucman, showed in this paper’s editorial page several weeks ago, the effective tax rate for the bottom half of earners has increased 24% from 1962 to 2018, while over the same period it has declined 23% for the top 400 earners in the country. “Stop to think this over for a minute: For the first time in the past hundred years, the working class — the 50 percent of Americans with the lowest incomes — today pays higher tax rates than billionaires.” A regressive taxation system violates every common principle of fairness and equity we have as Americans. And it furthers income inequality in two main ways. Obviously rich people get to keep more of their money than poor folks, which makes them richer. But more insidiously, there is less money available per capita for government programs that have historically tempered inequality over the long term: education, healthcare, anti-trust enforcement, etc. Many readers’ comments scratch the surface of the problem without addressing the root cause of income inequality: our increasingly regressive taxation system.

  256. @Lamont According to Bloomberg, we have the following using 2016 IRS data: The top 1 percent paid a greater share of individual income taxes (37.3 percent) than the bottom 90 percent combined (30.5 percent). The top 50 percent of all taxpayers paid 97 percent of total individual income taxes. What is your suggested breakdown of tax revenue by income? Spoiler alert, the top percentiles pay a lot more of the total tax burden now than in your "progressive" era. So, one could srgue the lowering of high marginal tax rates, and thr increased concentration of wealth in those rstes, has been a big net benefit for government tax revenue.

  257. @Kevin You, and most of the politicians involved in this debate, are confusing income tax with total tax burden. See the Saenz and Zucman op-ed I cited above. https://www.nytimes.com/2019/10/11/opinion/sunday/wealth-income-tax-rate.html Your statistics speak to fact just how wealthy the modern uber-rich are—beyond anything that has existed in the history of our republic and most of Western Civilization since the end of feudalism.

  258. It's a huge house of cards. When the next recession hits and layoffs come, many people will flee San Francisco and New York City, because they won't be able to afford the rent. House values will fall and many people who earn a lot of money right now are going to lose a lot of money.

  259. @Mark : from your lips to God's ears!

  260. Wages for all workers will rise over the next 10 years as the population ages rapidly and the percentage of adults in the work force decreases. Only 58% of the population will be between the ages of 18 and 64 in 2030.

  261. Many comments would suggest that the urban inequality issue is an intentional one that has risen out of greed and selfish interests. I question this narrow approach. These urban , higher paid individuals are more qualified to support today's economy than the less skilled. They have better education and subsequent opportunities. The higher income is the end result, not the driving force. Obama said it well; it's about leveling the playing field, not curtailing success and creativity. The idea behind less costly education is not a handout, it's meant to fix the playing field.

  262. Why shouldn't society value an engineer much more over a line cook? Or a scientist over a truck driver, or any host of critical intellect, knowledge-driven jobs over an ever larger host of limited-educated job holders. Yes, it is elitists but it is also rewards those who spend their time learning, studying and sacrificing while dull June is polishing her nails. AI and automation will rule the drones and be ruled by the elites. So where does democracy fit in? Otto Bismarck understood the threat. Better the elites enter a social contract with the drones and spread the wealth or they will rise, much like the Trumpers, and drag down civilization into the sewer with them. But again, who really wants to condemned to Mississippi?

  263. Truck drivers get paid more than scientists, or engineers in many cases.

  264. @Will With increased health problems. abysmal health care, and paltry retirement options, not to mention being aged out of the job. Would you rather be a truck driver than an engineer?

  265. Inequality is a serious problem but it is not causing unrest or the type of political awareness that induces major change. When Americans wanted change bigtime --1932-- the unemployment rate was over 20% and widespread foreclosures on mortgages led to huge homeless encampments in the most obvious places. A large one was in Central park on the site of what became the resevoir. It took that to switch from the mindless republicanism of the 20's to FDR. Nothing like that obtains now. Different situation; different response. Many are dissatisfied but they have enough that they don't want to lose it. There is a profound and unchallengeable urge to protect what one has. That is why medicare for all and much else in the progressive program turns a big piece of the working class off. It is understandable and an effort should be made to understand it.

  266. @Bill H you are dead on. We will know when this becomes a real problem. Are we on the road to having this problem? It is hard to see when credit is still pretty well greased and we have record low unemployment. However, that could change pretty quickly. Deutsche Bank put out a cost reduction plan to be implemented over the next few years and it was dramatic. There are a lot of six figure, professional jobs in these metro areas that will be eliminated by automation in the next 5 to 10 years. At a former employer I watched entire teams exist just to smash data from one system together with data from another system using excel. That sort of overhead just doesnt make sense in a world where anyone can pick up python and spend a few hours a week streamlining data cleaning.

  267. @Bill H This is so true. Probably a testament to the notion that times aren’t bad right now. You’ll know when they are. There’s more than a critical mass quite content, and 100% not willing to undertake any kind of upheaval. Tinkering at the edges is fine.

  268. President Trump forced millions of US jobs overseas in just three years. Not.

  269. @Dr. John He sure is making Viet Nam Great Again....which is kind of ironic.....