Poverty may sensibly defined in the case of America's doubling every two generations per-capita GDP as: living to work instead of working to live.
Inequality triage in the American labor market should recognize that it cost the least to help those who need help the most: less than 4 percent increase in the cost of GDP output would cover a raise in the minimum wage from $5/hr to $12.50/hr -- about how much we grow every couple of years -- yielding a minimal needs (for one person) raise for 40 percent of our workforce (even Mexicans and Chinese!).
Were the American minimum wage $10/hr in 2008, could it fall to $7/hr by 2048 even as average income doubled? Very easily; as long as low wage workers remained totally ignorant of the maximum ownership (and ultimately consumers) might be willing to pay them (highest willing price gauging true utility value) -- and if they remained utterly helpless institutionally to enforce that price. Nothing remotely resembling "perfect competition" has anything to do with setting America's lower wage levels.
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Dean Baker (in 18th reply on his blog post) reproduced what he called "a slightly altered table from Gordon's paper, showing income shares in 1972 and 2001" -- my percentage changes on the right.
0-20_______2.6%, _ 2.0%________- .6%__ -12.3%
20-50____ 16.0%, _ 11.7%_______ -4.3%__ -11.7%
50-80____ 33.7%, _ 27.2%_______-6.5%____ -7.4%
80-90____ 17.0%,_ 16.1%________ - .9%___ -
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90-95____ 10.8%,_ 11.3%______ +_ .5% __+
95-99.0___12.2%,_ 14.8%______ +2.6% ___+ 3.1%
99.0-99.9__ 5.7%,__ 9.6%_______+3.9% ___+ 7.0%
99.9 -100__ 1.9%,__ 7.3%_______ +5.4%__ +12.4%
6.4% loss of overall share meant 14.5% chop of 50-90 percentile share.
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I am adopting Bladerunner replicant leader Roy's desperate plea for America's lower 50 percentile earners: "We want more life, f____r."11:57 pm
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