Senate Republicans Block Tax Incentives

[YardleyLabs]

A=Poor
B=middle
C=rich
A+B+C=100%

To have an increased difference ("gap") between A & C, B must increase.

I didn't state the middle class is increasing, but just asking Yardly to explain his comment about the gap increasing between the poor and rich.
If you believe the middle class is shrinking, then what's happening to the rich since the poverty rate has remained around the mean rate?

The "genie" index is a calculation used to measure the extent of income polarization. It focuses primarily on the percentage of income going to the top earners and the bottom earners. Other analyses focus on the percentage of total income being earned by each quintile (20%) of the population as well as the top few percent.

What the data show are that the percentages of total income earned are increasing steadily for the top 20%, remaining relatively constant for the second 20%, and decreasing for the bottom 60% (Data are readily available on the Census web site). The rate of increase in real dollar income for the top few percent has been more than ten times the rate of increase for those in the middle (i.e., the middle class). For the bottom 40% there has been virtually no real growth in income over the last 15-20 years -- that is trickle down didn't trickle.

This pattern is not unique to America and, to some extent, is inherent in globalization. One of the primary effects of globalization, is inevitably that capital is more mobile than labor. I can easily unload investments in America and move my money to Asia to take advantage of lower cost labor. However, it is much harder for the labor to follow the jobs.

It is ironic that we have removed almost all barriers to the movement of goods and money, but that the movement of people is tightly controlled, creating massive economic imbalances. If, for example, cheaper labor could enter the US more readily, jobs would have been less likely to leave and our economy would be stronger. Instead, our jobs are being sold to other countries. and our workers are increasingly facing long term structural unemployment.

Neither political party is addressing this long term issue substantively. Instead, both try to cast it in ideological terms. It is really a question of economics more than politics. There is no reversal of globalization. Communication and transportation costs are less and less important to the total cost of goods. Free movement of money isn't going to stop. The rest flows inevitably.

[Buzz]

Communication and transportation costs are less and less important to the total cost of goods. Free movement of money isn't going to stop. The rest flows inevitably.

How does that stand up in a world of with at over $200/barrel?

I read an interesting article about shipping container costs when we were seeing gas at over $4/gallon. It was becoming an issue.

[WaterDogRem]

It is ironic that we have removed almost all barriers to the movement of goods and money, but that the movement of people is tightly controlled, creating massive economic imbalances. If, for example, cheaper labor could enter the US more readily, jobs would have been less likely to leave and our economy would be stronger. Instead, our jobs are being sold to other countries. and our workers are increasingly facing long term structural unemployment.

And who, do you think, has caused this?

[Buzz]

I'm thinking that you misread that line.

[YardleyLabs]

And who, do you think, has caused this?

Actually, it was caused by other countries progressing rapidly while we progressed more slowly. India, for example, made massive public investments in the development of technology centers to train programmers and analysts efficiently and provide them with an environment where they could improve their skills over time.

The cash to support this initially came from systematic programs to offer staff as contract programmers throughout the United States and Europe. As open architectures became more important, India was a major beneficiary because it had previously had limited access to mainframe technologies and relied more on UNIX and microprocessor environments. Contract programming staff tended to remain out of the country in 18 month cycles, returning to India to work in technology warehouses for the next 6-12 months to gain experience in emerging technologies.

Those training warehouses eventually became highly competitive, beginning the era of large scale off-shore outsourcing. The revenues from this contnue to finance the development of India's general economy. By the late 90's, India's warehouses were among the best system development houses in the world.

By contrast, American always excelled in the development of new IT technologies and in the design and management of large scale systems. However, there was also always a tendency to veiw programming as somewhat unprofessional. In the 70's, COBOL programmers were hired from among former soldiers, which had learned their skills working on DoD systems, and through importation of programmers from Ireland. COBOL, which was initially developed as a language that could readily be used by people of average intelligence, was well suited to accounting and business reporting systems. However, it was poorly suited for more advanced systems.

With the emergence of microprocessor based systems, database tools and more complex languages such as C became more important. That led to an era of programmers as rock stars. In the early 90's, a programmer skilled in technologies such as relational databases and 4GL languages was earning $100-200,000/year while COBOL programmers were earning $45,000.. One side effect of this was that companies essentially stopped investing in skill development, preferring to terminate those whose skills were outdated and hire contractors with the requisite technology skills. Major corporations suddenly began to outsource the majority of their development activities even when IT technology was a central strategic asset. As a consequence, those strategic skills are now more likely to be found in Asia than in the US.

This is an example of how the world has shifted, but similar patterns have emerged in multiple industries. One of the more interesting phenomena to explore, would be the percentage of American defense systems that are now being developed and maintained by non-citizens. Outsourcing strategic activities has long term consequences that our market economy is not very good at considering.

[WaterDogRem]

I'm thinking that you misread that line.

How so? Too fuzzy?

[ppro]

Yardley if possible could you elaborate on this statement" If, for example, cheaper labor could enter the US more readily...." thanks

[tom]

Yardley if possible could you elaborate on this statement" If, for example, cheaper labor could enter the US more readily...." thanks

That simply means that he wants you to work for acorns. (peanuts is what the "middle class" gets paid)
Remember those "jobs that Americans don't want"? (bet some would love to have them about now)