by divorced one like Bush
Let’s talk jazz: Still cashing the income inequality
berries, clams, dough, heavy sugar, jack, kale, mazuma, rubes, simoelan, voot. It’s all money.
I started this series to develop a simple model of income inequality so that I wouldn’t sound like I was chewing gum and people wouldn’t get all balled up on the heavy sugar.
The first one presented the model. 100 people, $1000 of total income. 1976: 8.7% of the dough to the One, all the rest of the jack to the Many. 2005: 23% of the sugar to the One, the rest of the voot to the Many. Basically, it showed why income inequality ain’t allowing the Many to by orchids. Also, maybe it’ll help you know one’s onions.
The second post addressed the concerns that the model was to simple. The sugar was heavier, the times were percolating I’m told. Except that the only real issue for my model was that the population would have to increase against the 1000 clams for the model to reflect the coffee made. There was less mazuma for everyone. Oh, and the total dollars to be made up with a tax cut to duplicate the take of 1976 is $1.4 trillion dollars.
In the end, none of this bodes well for the concern about multiplier effects and money velocity. Yet here we are all these plans being put into action to get people spending ’cause that’s the problem and the issue still gets no respect. We want to get more kale into the hands of the many, but we aren’t taking about anything related to increasing the share of income to the many (which would include the trade issue as Stormy has been hammering it).
HELLO! The reason people have no money is not because their taxes are too high, their health care is too high, their interest rates are too high; THEY NEVER HAD IT TO BEGIN WITH!
So, let’s see how much the 99 people of the Many would need in 2005 to have stayed even with their position in 1976.
First here is what the $1000 should be in 2005:
$3,429.93 using the Consumer Price Index
$2,811.66 using the GDP deflator
$3,891.74 using the value of consumer bundle
$3,296.90 using the unskilled wage
$5,013.86 using the nominal GDP per capita
$6,805.40 using the relative share of GDP
My model using actual income data came up with $6940 total, but based on per capita, it was only $5130.
Each of the 99 people had $9.22. In 2005 they would need the following:
$31.62 using the Consumer Price Index
$25.92 using the GDP deflator
$35.88 using the value of consumer bundle
$30.40 using the unskilled wage
$46.23 using the nominal GDP per capita
$62.75 using the relative share of GDP
My model, using per capita income resulted in $39.90.
Interesting No? The total personal income in the model comes out to be pretty close to the GDP per capita and relative share. So, the percolating of the economy did result in the same economic coffee in 2005 as in 1976. Unfortunately for the Many, the semoelan handled is less than the per capita and relative share of GDP. Can you say SCREWED?
My model also resulted in the number of $47.31 for each of the 99. That is the number to make up for the share of income lost to the One. It is essentially the number calculated based on nominal GDP per capita. Or, the unscewed number.
But, these numbers just show that using the percentage split, the One stayed even with the percolating economy and the Many dropped down to something less. It does not show the loss of purchasing. For that, we need to reverse calculate.
For the Many, they have $39.90 each in 2005. In 1976 it looks like this:
$11.63 using the Consumer Price Index
$14.19 using the GDP deflator
$10.25 using the value of consumer bundle
$12.10 using the unskilled wage
$7.96 using the nominal GDP per capita
$5.86 using the relative share of GDP
I think what we are seeing here by looking forward and then backward, is that the Many are earning more for their labor (wage went up), but they are not earning wages comparable to the contribution made to the rising GDP by their laboring. Who knew, Slave Wages is a real wage!