Taxable income in Pennsylvania excludes important sources of income including social security and pension income as well as the earned income tax credit.

A larger percentage of college students in Philadelphia now compared to 1973 would inflate the ranks of low income taxpayers. The effect is likely to be very small but I need to do more work to nail that down.

Here is a somewhat more comprehensive source for data on incomes from the 2005 ACS. No comparable data is available for 1973.

The taxable income data really only capture best income from work and especially for high income taxpayer’s unearned income. So after taking into account the quibbles this data confirm a larger body of empirical work which documents a dramatic increase in earnings dispersion since 1973. Earnings dispersion both pre and post taxes and transfers has increased overtime i.e. the growth in dispersion is driven by trends earnings for workers not government tax and transfer policy.

--Mark Price

In answer to the question, are there political solutions to the problems of the bottom half of wager earners, yes.

The problem in this thread is that the original solutions offered were not political, they were personal. While there are personal ressponsibilities we all have, even at the lowest levels of income, those solutions are not enough to solve political and economical problems.

Which is why pretty much everything I have been saying is in response to this point Otis made above:

A lot of that has to do with our values. What do we value? Isn't it possible to be poor and live a happy, prosperous life? Can't you be poor and feel the need to kill someone? I'm not saying that it's ok to be poor. We should do everything we can to lift peopele out of poverty.

But people need to realize that we live in a capitalistic society. That is not going to change. In a capitalistic society, there are winners and losers (rich and poor; haves and have-nots). This is the society that we live in. Is it right? No. But it's not going to change.

Yes we do live in a capitalistic society, and we have for a long time, but the nature of the economy capitalism influences--the actual things that economy focuses on and produces--has changed so much that far fewer people are living as comfortably, in terms of income, then they did in the 40's, 50's and 60's. Those decades were not all that great in a lot of other ways, but in broad terms poor people were better off.

And this is not just about the class you are born into, ALL young workers in this economy are facing huge challenges which government is fundamentally unprepared to address at this moment. So while capitalism may be here to stay, the way government functions as a mitigating force on capitalism can change and can be effective at reducing the wage and income gap.

Within that context, personal responsibility plays a role, sure, but the example of the worker Otis cites above who takes responsibility within the rule of the current game is simply not applicable to all of the people whose income and opportunity is shrinking. The reality is that of the 30 or 40 people who are employed to run one FYE or one Gap, only a handful will ever become managers, and even when they do their top income is never gonna be much more than 40 or 50 k. That's why systemic changes need to happen like improving education on the worker side and forcing workers to offer healthcare (like RX for PA is doing) on the employer side and using munincipal dollars for strategic and sustainable economic development on the government side.

I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese

(Speaking of personal responsibility.)

makes way more sense in the 'trying to figure out what the hell has gone wrong and why' register and not the 'proving I know more about x or y oblique side issue' one.

Ray is acutely observing much of the underlying problems that complicate some of the initial analyses on this thread, and I don't think that this back and forth gets us very far.

To expand upon your placing blame, I'd like to agree, in part.

I think it comes from the top and the bottom and is met in the middle without any resistance. You're right in that we can't just blame the poor and that we have to look at this commerical, consumer oriented culture promoted from up-high.

How is it that we can have kids play video games where they can jack police cars, kill innocent pedestrians and blow stuff up for no other purpose than just to have fun, and no one is outraged--clearly, someone on that corporate board didn't take responsibility. Clearly, a parent didn't take responsibility. Is that as bad as when it happens in real life, killing cops, etc. No. But, it is indicative of a society that just doesn't care anymore.

How is it that when in a place like Haddonfield, teens absolutely destroy a home in a party, and it is met with a yawn by the community and parents. Clearly, those parents aren't taking responsibility.

I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese

To add to Price's work.

Mean Household Income of Quintiles

Source: U.S. Census Bureau | Income in 2005 $

Part of the answer it gives is as follows:

When did household income inequality increase?

Whereas the data on household in-come inequality between 1967 and 1980 are ambiguous, it is clear that the household income distribution became increasingly unequal beginning in 1981.

and

The aggregate shares approach also indicates growing household income inequality from 1980 to 1992. The net percentage change in the aggregate share of household income received by each fifth of the income distribution. Households in the top fifth of the distribution (particularly those in the top 5 percent) increased their share of aggregate income, while those in the bottom four-fifths lost ground. Households in the top fifth of the distribution increased their share of aggregate income by 7.3 (+/- 3.1) percent from 1980 to 1992. During the same period, households in the lowest two-fifths experienced a sharp decline in their share of aggregate income. The bottom fifth's share of aggregate income declined by 11.6 (+/- 2.8) percent. Households in the second fifth lost 8.7 (+/- 2.6) percent of their share of aggregate income, not significantly different from the loss experienced by the bottom fifth. These changes highlight the growing gap between the country's richest and poorest households

and

What drives changes in income inequality?

Researchers have tied the long-run increase in income inequality to changes in the U.S. labor market and household composition. More highly-skilled, trained, and educated workers at the top are experiencing real wage gains, while those at the bottom are experiencing real wage losses making the wage distribution considerably more unequal. Changes in the labor market in the 1980s included a shift from goods-producing industries (that had disproportionately provided high-wage opportunities for low-skilled workers) to technical service industries (that disproportionately employ college graduates) and low-wage industries, such as retail trade.

But within-industry shifts in labor demand away from less-educated workers are, perhaps, a more important explanation of eroding wages than the shift out of manufacturing. Other factors related to the downward trend in wages of less-educated workers include intensifying global competition and immigration, the decline of the proportion of workers belonging to unions, the decline in the real value of the minimum wage, the increasing need for computer skills, and the increasing use of temporary workers.

At the same time, changes in living arrangements have occurred that tend to exacerbate differences in household incomes. For example, increases in divorces and separations, increases in births out of wedlock, and the increasing age at first marriage may have all led to a shift away from traditionally higher- income married-couple households and toward typically lower-income single-parent and nonfamily households. Also, the increasing tendency for men with higher-than-average earnings to marry women with higher-than-average earnings may have contributed to widening the gap between high-income and low- income households.

Source: http://www.census.gov/hhes/www/income/incineq/p60204/p60204txt.html

any thoughts on this post: (since this thread is beyond beat to death)

http://youngphillypolitics.com/future_philadelphia_s_economy_and_michael_nutter

The statistics that measure U.S. family income, while most likely accurate, fail to recognize that since we have agressivly moved labor oveseas at a much more rapid pace since the mid-1990s, there has been a raise in the standard of living for many families. They are just not our families. Simply measuring the U.S. does not mean anywhere near what it did when we were 95% of the workforce. I think efficiencies in production have been achieved but the rewards may be felt moreso in newer overseas operations than ours.

I am not suggesting that I am in favor of exporting the only substanial productive middle class in history that we achieved from 1947 to the late 1980s, only suggesting that it has been done and the old refereces do not tell the whole story. A rising tide does lift all boats. Now, however, they are not our boats.

With regard to runaway executive compensation, and there is plenty of evidence of that without performance, we may be missing another major shift, this time in oversight. It is my guess, (and it is only a guess) that since the distribution of stockholder ownership has been expanded so greatly in recent years, the day of large block ownership running a watchdog operation on managment seems to be over. Those with major holdings used to virtually control stockholder meetings and hold feet the fire regarding all expenses, with a performance/reward approach to compensation that seems to have vanished.

The face of the corporate word and the poltical relationships have changed much more significantly in the last 10 years than most recognize - - not necessarily for the better - - and both political parties have equal resposibility here.

Jim Foster
Independent Candidate
8th City Council District

It is good you are asking them. Unfortunately I don't have time to even try to answer them. But they are not reallly for me, are they? You ask them as if we are disagreeing about a lot of things. If so, I don't know what they are other than your interesting, but I think not quite correct, point about the economic benefits of high marginal taxation on the rich.

One important point though...You were in some ways right before about the fifties, or more precisely the time from 1947 to 1973 when the economy was growing fast and inequality was declining. It was a very good era economically except in the older urban areas, which were beginning to suffer from the problems that so afflict us today. My criticism was only about the extent to which high investment was responsible for these good results. Investment was not especially high. But we were benefitting from, in no particular order, (1) US dominance of a the post-war global economy that allowed large US corporations to reap oligopoly profits that were to some extent shared with their unionized workforce; (2) productivity increases that were due to the exploitation of the domestic application of the technological innovations of the1 1920 to 1945 period; (3) strong labor unions; and (4) a domestic political agenda that supported expansion of the public sector (schools and universities; roads and bridges; etc.) and the maintenance (and in the sixties expansion) of social welfare spending.

On a more general point: A number of your questions point at villains: those who elected Reagan, those who engineered white flight, etc. There are certainly villains in the 20th century economic history of the US but not everything happens because of villainy. A lot of what happens in political and social life is unintended. But those with power can take better advantage of unintended consequences than those without power. No one brought about the economic difficulties of the mid to late 1970s except, to some extent,the Saudis. That the technological impetus of the early post-war period ran out and that foreign competition increased and undermined the position of major US corporations were not intended by anyone. And they were exacerbated by the bad timing of the business cycle as far as the Carter administration was concerned. The post-war bargain was not working any longer, especially but not only for business. When Democratic administrations lowered unemployment and increased social spending, wages would go up and business profits would decline. American businesses could not secure the same level of profits because productivity growth was slowing down and their oligopoly profits were challenged by foreign competition. We all suffered when efforts to sustain high wages and profits without productivity growth lead to inflation and when efforts to restrain inflation lead to recession.

Right wing economists had new-old ideas about how to fix our economic difficulties and the business community saw lower taxes, decreased regulation, and a tilt against labor as a way to shift the balance of bargaining power against labor thereby restraining wages, increasing their profits and enabling them to regain their footing against foreign competition. And, of course, they argued that these policies would also lead to increased investment that would restore productivity growth. But inflation was wrung out of the economy not by productivity growth but by the worst rececession since 1929 and by labor bashing. And for this and other reasons, working class wages began to stagnate and taxes became less progressive and inequality increased (This was intended and the people who intended are villains.)

Reagan was partly the result of this rightwing ideological shift but he would not have been elected without long term and short term unintended consequences I just described, as well as the Iraq hostage crisis. (If Democrats had an alternative analysis that would have enable Carter to plausibly argue that he could restore productivity growth in a progressive way, things might have been different.

And that is my way of pointing out that our economic history is a product of the interplay of long term structural forces and short term factors, and only the latter are partly under our control. We have to try to identify these structural factors so that we can take advantage of the short term factors that might enable us to gain power and use that power to move our political economy in a progressive direction. That's why it is so good that you are stimulating and taking part in this discussion. Right now, the left has no commonly accepted strucutral analysis of our economic difficulties and thus no program as ambitious as the one the GOP had in 1980. You can see the result in the pretty dismal offerings that we are getting from most of the Democratic presidential candidates.

I don't have such a structural theory and I'm fairly uncertain about much of what I think I know about political economy. But I'm glad you and others taking part in this thread recognize the need for one.

PS GDP is not a measure of economic inequality at all but just the sum of all good and services produced.

Check it out. Cicero is the best.

If anything, I'm teasing a little bit because this is the sort of stuff I have to study, and you (and apparently Gaetano) do it for fun.

--Tim