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the 80th percentile isn’t the problem

Okay, so I know three days is like a thousand years in internet time. But this Sunday Times op-ed, “Stop Pretending You’re Not Rich,” is still bugging me. The title is perfect guilty liberal upper-middle-class New-York-Times-reader clickbait. And sure enough, it was all over my social media feed.

But I think the piece gets things wrong in a particularly pernicious way.

The thrust of the op-ed, and presumably the book it’s promoting, is that upper-middle-class Americans—the top 20% by income—are the real problem, not the top 1%. They are capturing most of the income gains, hoarding opportunities, and they don’t even acknowledge their luck in being there.

A lot of the specific points, particularly about policies that benefit the moderately well-off at the expense of others, are easy to agree with. Exclusionary zoning is bad. 529 plans benefit the well-to-do almost entirely. The mortgage interest deduction is terrible policy.

But the real problem with the U.S. economic system isn’t the self-interested behavior of those in the top 20% of the income distribution. It’s that 1% of the population holds 40% of the wealth, and that GDP increases aren’t translating into higher incomes for most of the population.

The op-ed misdirects our attention away from these factors in multiple ways. First, it paints a misleading picture of this person in the top 20%.

Most obviously, it says that the average income of this group is $200,000, which I admit does sound pretty high. But using the average income to describe this fifth of the population is a problem, given the shape of the income distribution.

The median, which would be the 90th percentile, is $162,000. The 80th percentile is $117,000. (Here’s a quick calculator based on CPS data.) Very healthy, but not $200,000. The anecdotal illustration—the author’s friends who pay $30,000 a year for their kid’s high school tuition—also seems to point to someone with an income on the high end of this range.

Second, while the second decile is doing reasonably well, both its wealth and income are quite proportionate with its actual numbers. This paper is now slightly dated, but it does break out that decile—to show that in 2007 at least, it held 12% of total net worth, and made 14% of total income (see Table 2). You’d have to be pretty damn egalitarian to think that was unreasonably high for the next-to-top 10%.

Finally, yeah, the top 20% has seen more income gains than the rest. But the issue is less that they’re gradually getting better off, than that wages in general aren’t keeping up with either GDP growth or productivity. If you look at pre-tax income of the top 20%, exclusive of the top 1%, it’s increased by 65% since 1979 (see Table 1). Sounds like a lot—until you realize that real GDP per capita increased almost 80% during the same period.

So sure, the top 20% is unquestionably well-off, and indeed rich in global terms. And doubtless people in this group could show a little more self-awareness of their relative good fortune. And it would be nice if the mortgage interest deduction wasn’t the third rail of tax policy.

But the problem isn’t that the top 20% is doing reasonably well. It’s that the rest of the population should be doing that well, too. Ultimately, pointing a finger at the fortunate fifth is a sleight-of-hand that keeps our attention away from where it should be: on a much richer, more rarified group, and the broken system that allows it to capture the bulk of the gains that we as a society produce.

 

 

 

Written by epopp

June 14, 2017 at 12:15 pm

class and college

When awareness about the impact of socio-economic class was not as prevalent among the public, one exercise I did with my undergraduates at elite institutions was to ask them to identify their class background.  Typically, students self-identified as being in the middle class, even when their families’ household incomes/net worth placed them in the upper class.  The NYT recently published this article showing the composition of undergraduate students, unveiling the concentration and dispersion of wealth at various higher education institutions.

As a professor who now teaches at the university listed as #2 in economic mobility (second to Vaughn College of Aeronautics and Technology ), I can testify to the issues that make an uneven playing field among undergraduates.  Unlike college students whose parents can “pink helicopter” on their behalf and cushion any challenges, undergraduates at CCNY are supporting their parents (if alive) and other family members, bearing the brunt of crushing challenges. (In a minority of cases, students’ parents might help out, say, with occasional childcare – but more likely, students are caring for sick family members or helping with younger siblings.)

To make the rent and cover other expenses in a high COL city, CCNY students work part-time and full-time, sometime with up to two jobs, in the low-wage retail sector.  They do so while juggling a full load of classes because their financial aid will not cover taking fewer classes.  For some students, these demands can create a vicious cycle of having to drop out of classes or earning low grades.

I always tell students to let me know of issues that might impact their academic performance. Over the years (and just this semester alone), students have described these challenges:

  • long commutes of up to 2 hours
  • landlord or housing problems
  • homelessness
  • repeated absences from class due to hospitalizations, illness/accidents, or doctor visits for prolonged health problems
  • self-medicating because of fear about high health care costs for a treatable illness
  • anxiety and depression
  • childcare issues (CCNY recently closed its on-campus childcare facility for students), such as a sick child who cannot attend school or daycare that day
  • difficulties navigating bureaucratic systems, particularly understaffed ones
  • inflexible work schedules

These are the tip of the iceberg, as students don’t always share what is happening in their lives and instead, just disappear from class.

For me, such inequalities were graphically summed up by a thank you card sent by a graduating undergraduate.  The writer penned the heartfelt wish that among other things (i.e., good health), that I always have a “full belly.”  Reflecting this concern about access to food, with the help of NYPIRG, CCNY now has a food pantry available to students.

Written by katherinechen

March 22, 2017 at 5:18 pm

global resistance in the neoliberal university

intlconf
Those of you who are interested in fending off growing neoliberalism in the university might be interested in the following international  line-up at CUNY’s union, PSC.
You can watch a livestream of the conference via fb starting tonight, Fri., March 3, 6-9pm and Sat., March 4, 9:30am-6pm EST:
…an international conference on Global Resistance in the Neoliberal University organized by the union will be held today and tomorrow, 3/3rd-4th at the PSC, 61 Broadway.  
 
Scholars, activists and students from Mexico, South Africa, Turkey, Greece, India and the US will lead discussions on perspectives, strategies and tactics of resisting the neoliberal offensive in general, and in the context of the university in particular.
 
You can visit this site for a link to the conference program:
 
Due to space constraints, conference registration is now closed. But we’re thrilled by the tremendous interest in the event! You can watch a livestream of the conference here: https://www.facebook.com/PSC.CUNY.  If you follow us on our Facebook page, you will receive a notification reminding you to watch.  
 
We look forward to seeing some of you tonight and to discussing the conference with many of you in the near future. 
 

 

 

Written by katherinechen

March 3, 2017 at 11:29 pm

supreme court game theory

Right now, Senate Democrats have a choice, they can vote to confirm Supreme Court nominee Neil Gorsuch or reject. This choice is complex:

  • How desirable is this individual nominee?
  • How desirable is it to filibuster this individual nominee, even if he is desirable?
  • How desirable is it to punish Republicans for not holding a vote on Merrick Garland?

I think these issues are subtle and interdependent. For example, it is unclear whether Trump would nominate another Scalia type jurist, who is very conservative but does show some degree of independence. Thus, this may be “as good as it gets.”

However, voting in favor of Gorsuch, or simply not filibustering, raises a number of issues for Democrats. First, it essentially confirms a new norm in the Senate. If the President and Senate are from different parties, the Senate can deny the President the power to appoint any Supreme Court justices. This is a real shift. Technically, the power granted by the Constitution is “advise and consent,” not complete denial. Second, allowing the Gorsuch nomination to proceed without a major fight will probably inflame the base. The Democratic base could reasonably ask why Republicans are happy to filibuster and Democrats not so much.

My prediction is that Senate Democrats will allow Gorsuch to be nominated without much fuss because Democratic primary voters won’t punish them. The Democratic base seems to be very ineffective when it comes to punishing deviant behavior. Thus, the marginal Senate Democrat will probably focus more on general election voters in swing states.

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Written by fabiorojas

February 13, 2017 at 12:01 am

conspiracy theory, donald trump, and birtherism: a new article by joe digrazia

search-images

Joe DiGrazia, a recent IU PhD and post-doc at Dartmouth, has a really great article in Socious, the ASA’s new online open access journal. The article, The Social Determinants of Conspiratorial Ideation, investigates the rise in conspiratorial thinking on the Internet. He looks at state level Google searches for Obama birtherism and then compares to non political types of conspiracy theory, like Illuminati.

The findings? Not surprisingly, people search for conspiracy related terms in places with a great deal of social change, such as unemployment, changes in government, and demographic shift. This is especially important research given that Donald Trump first rose to political prominence as a birther. This research is indispensable for anyone trying to understand the forces that are shaping American politics today.

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Written by fabiorojas

February 8, 2017 at 12:22 am

the muslim registry is next, so it is time to prepare

Scatter Plot also has a post about political activism and the anti-refugee ban

Only seven days into his presidency, Donald Trump has issued cruel executive orders aimed at immigrants and refugees. One recent executive order banned the re-entry of any individual who was a citizen of Iran, Yemen, Syria and other countries. The order was especially cruel in that it applies to travelers who had already secured visas, green cards, and other paper work. Observers noted that the order applied to newborn infants, the elderly, and the disabled, none of whom present risk.

In response, lawsuits were filed and protests erupted. Thankfully, at least two federal court judges believed that the executive order was likely invalid and ordered a stay. However, this is a short term victory. It will not be hard for the Trump administration to rewrite executive orders and propose legislation that comply with American law. This is because courts time and time again have agreed that people do not have the freedom of movement.

As time passes, the Trump White House will learn how to write policy in ways that pass judicial review and that are approved by Congress. This is deeply problematic on two levels. First, restrictions on migrations are irrational and cruel, no matter who is president. But also, the successful imposition of anti-immigration policy will embolden the White House to follow through on one of Trump’s most repulsive proposals, a religious registry.

What do to? I think the strategy is obvious. Simply, resist these anti-immigration proposals now so that future proposals are harder pass. How? There are simple ways: simply say to your friends and family that immigration is ok; call your local representatives; donate to groups that litigate on behalf of immigrants; and, for the brave, their will be plenty of chances of non-violent civil disobedience.

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Written by fabiorojas

January 30, 2017 at 12:16 am

let’s panic thoughtfully

Since we’re both here, my social media bubble probably looks a lot like your social media bubble. And in my social media bubble, people are freaking out about the Trump presidency. There are false voter fraud claims, ugly attacks on the media, chilling of speech at government agencies, and a whole host of policy actions many find disastrous. I am also disturbed and fear that the U.S. is making an irreversible turn toward authoritarianism.

At the same time, I’m disheartened by how quickly academics and others who should know better unreflectively buy into the latest outrage on social media. This has negative consequences independent of Trump’s actions. Catastrophizing the bits that aren’t catastrophic undermines our authority to speak up about the things that actually are. And further politicization of the media and, now, the federal bureaucracy will continue to erode the very things that protect us from Trump’s worst.

I do not mean to create a false equivalence here. What Trump has the power to do vastly outweighs the chattering of academics or journalists on Twitter or Facebook. But I have no direct influence over Trump’s administration. I can, however, exhort my academic colleagues to do better.

In that spirit, here’s two things to consider before you decide to share the latest outrage.

1) Is this an important bill? Or just another bill?

In the 114th Congress, more than 12,000 bills were introduced. You know how many became law? 329. 86% never even make it out of committee. There are a bunch of extremists in Congress. Some of them introduce the same bills over and over that are never going to see the light of day. This has been going on for decades.

A few days ago, an Alabama Republican introduced a bill that would pull the U.S. out of the United Nations. Twitter went nuts, quoting the bill with captions like “WHAT. THE. ACTUAL. HELL.” It spread like crazy.

Problem is, this is nothing new. This representative has been introducing this bill into each Congress for the last two decades. It has nothing to do with Trump, nor are there any indications it was treated differently this time. There are lots of things to get worked up about. This bill is not one.

2) Is this politics as usual? Or something truly new and dangerous?

There has also been a lot of freaking out in the last couple of days about the silencing of federal agencies. EPA, NIH, and USDA have all had reports about communications restrictions, including cancellation of a planned climate change conference and a halt on all “public-facing documents” at USDA.

A lot of Trump’s political agenda will play out—or not—through the executive agencies. It is very likely that his appointees will attempt to undercut what many see as their basic missions. By all means, oppose this with great intensity.

But when administrations change, they are going to point agencies in new political directions. I don’t have firsthand experience working in federal agencies. But I have spent a lot of time reading documents from just these types of agencies in the 1960s, 70s, and 80s. Putting a pause on public communication during a transition doesn’t seem that radical to me.

I keep looking for a quote from an actual agency employee that says, “This is wildly different from what happened when George W. Bush took office.” The closest I can find is ProPublica saying an EPA employee “had never seen anything like it in nearly a decade with the agency.” But that only covers the Obama transition, which aligned with the mission of the EPA. It’s not clear that this is not politics-as-usual. Could it transition into something new and dangerous? Absolutely. But that ship has not yet sailed.

Why commitment to critical thinking matters in the face of a Trump administration

I can already hear people yelling that I’m not taking Trump seriously enough. “This isn’t ordinary times! This is an emergency. Real lives are at stake!”

But it’s precisely because I don’t think this is ordinary times—because I think we’re in a uniquely dangerous moment—that it is especially important that we retain the ability to think clearly, for two big reasons.

First, treating every single action of the administration as dangerous and disastrous, without any larger context, further politicizes our fragile institutions. It may be too late for the media. But it is not good for democracy if our bureaucracies go rogue.

People are delighted that the Badlands National Park gave the administration a big old middle finger yesterday with its climate change tweets. But to the extent that federal government functions at all, it functions because of all the unelected, unappointed people who do their jobs, regardless of administration. If ordinary government employees become seen as actively in the bag for the left, we are one step closer to having our government stop functioning entirely.

Is there a time to say “no”, and openly rebel or quit? Absolutely. And if you haven’t already, you should probably write down your own personal lines in the sand, before our sense of “normal” further erodes. If you’re at the EPA, maybe it’s active suppression of climate change evidence. If you’re at NSF, maybe it’s meddling with individual grants. Maybe your lines have already been crossed.

But if they haven’t, as a civil servant you serve democracy better by doing your job—even if that’s carrying out decisions made by someone you hate—than by throwing shade from a government Twitter account.

Second, assuming everything is catastrophic limits our ability to focus on the real catastrophes. The single most dangerous thing Trump has done in the last few days (and I know, it’s been a busy few days) is double down on his claims about massive voter fraud. Because if people don’t believe that our elections are basically honest and agree to respect the results of those elections, our democracy is truly toast.

The good news is that, according to the Washington Post, “Trump has virtually no elected allies in this assault on the election system.” Not even Sean Spicer will say Trump’s claims are actually true.

If we cry wolf about every change that is not in fact catastrophe—if we suddenly scream “fascism” about changes that are part of the normal workings of democracy, we undermine our ability to fight the things that matter most.

And if we don’t have a democratic government, all this other stuff we care so much about—healthcare, immigration policy, racial justice, science, foreign policy, whatever your personal biggest concerns are—will be irrelevant. A fully authoritarian government can do what ever it wants, and we’ll have no say. Defending democracy has to be priority #1. And defending democracy means commitment to reason.

Written by epopp

January 25, 2017 at 5:10 pm