Steve Stewart-Williams is correct. While it is technically true that the middle class is shrinking, this is because the upper class has grown enormously. You might not consider $100K in 2023 rich, but 87% if the people in 1967 would have thought so. You also might misread the lower part of the graph, thinking the light blue is a poverty rate. It is a low income rate. The poverty rate is about half that at 11%, and that is before those people have been given cash and non-cash benefits. I am not saying the poor do not "really" exist. They do and I knew them as a social worker. I wouldn't want to raise a family on $30K a year either. But historical comparisons usually reveal the opposite of what activists and young people with no clue want you to think.
Relatedly, the memes you see comparing CEO salaries to average employees are extremely good examples of lying with statistics. The CEO of Starbucks received $96M for the last four months of 2024 after being hired away from Chipotle. About $90M of that was in company stock, so that he would have, y'know, skin in the game. It's not liquid. He can't cash it in and spread it around. His employees "averaged*" about $15K**. Why doesn't the selfish bastard share all that money with his employees? For openers, there are over 350K of them and most of them are part time. Part-timers get medical, dental, 401K and other benefits. I'm not saying I'd like to work there, but it's not the salt mines. Of the CEO money that is liquid, he could cash it in and personally give everyone in the company more that ten whole dollars this year. I don't know him from Adam. He might be a miserable, greedy, abusive sonuvabitch that you would pay money not to have coffee with.
*Don't get me started.
** I actually doubt this one. But whatever it is, they only get another $12.
9 comments:
Just using constant dollars only tells part of the story, since house prices rose faster than inflation.
Yes, 'constant dollars' is very sensitive to the weightings used. I suspect that the poor public schools that exist in so many areas raise people's living expenses by either (a) forcing them to put their kids in private school (which won't count as inflationary even though it costs them money) or (b) move to an area with better or at least safer schools.
WRT housing, new houses and apartments have both gotten much bigger. It is hard to quantify in terms of wealth what it means to live in a space which would have been considered huge in your parents' childhood, or the reverse, the feeling of constraint living in an older house much smaller than the ones your friends have. You would feel poor. Also, second homes are more common. I will be writing about housing and wealth soon, and already have a couple of paragraphs in. Also, the divorce rate has gone up and the number of children has gone down since 1967, so "household wealth" is much greater per person with more space, clothing, and vehicle each as well. As you say, constant dollars is only part of the story.
re CEO salaries, I note that there is much less complaint about athlete, movie star, and tv personality pay levels.
An typical post of the 'ordinary people were much better off' genre:
https://x.com/robkhenderson/status/1959257060220006803
A lot of false equivalences in both the McDonald's ad and the X post. It's more like $8, there were fewer fries, and you couldn't buy even a small house on a $2K/yr salary.
I've never understood quarreling over differences in salary. Someone's paying the salary with resources he has legal control over. If he's overpaying, he'll probably find he's made a mistake in the allocation of the resources, and someone else who allocated more skillfully will outcompete him. As long as neither violence nor fraud is involved, why is it my business?
Texan 99, I wondered about that long ago and decided that something else is at play, as we have discussed before. There is something primitive that is not just envy, but an automatic assumption that someone who has more than others must have cheated to get it. In a hunter-gatherer society, this would be true. A skilled hunter or craftsperson might have twice as much as others, but not ten times as much.
Part of it, I think, is that people can accept somebody getting a lot more $$ than they do if it is obvious that that individual can do things that they can't. Most people can surely accept that they can't play baseball or basketball at a high professional level...maybe even that they can't sing or act at a professional level, But relatively few people have any idea what the CEO of a major company actually *does*
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