Rise of the Creative Class Worked a Little Too Well
This article made me curious about something, statistic wise, with inequality.<p>Imagine we have a kingdom of a million workers and one king. Inequality would be mostly invisible. Unless you compare yourself to the king (and who would dare do such a thing..), you&#x27;re doing pretty well - or at least as well as average. But now let&#x27;s imagine the king wants to modernize his land. So he starts developing and training people. And now we have 1 king, 50,000 skilled experts, and 950,000 workers. Well there&#x27;s not <i>that</i> many of those skilled workers, so they must still be pretty special. It seems kind of unfair, but things are still pretty decent.<p>And now imagine the king trains another 50,000 experts and grants 10,000 of the already existing experts vast tracts of land. Now we have 900,000 workers, 90,000 experts, and 10,000 lords. Now inequality is starting to feel very real. There are lots of these guys and they don&#x27;t seem to be anything special. How is it that they&#x27;re doing so well, while the majority struggles?<p>I think we can say that the king&#x27;s actions have greatly benefited society. Yet there&#x27;s a strange paradox. As benefit, and privilege, comes to more and more people - it seems ever more unfair for those yet to benefit themselves. And now imagine by the time our hypothetical skilled individuals start to become the majority. It would begin to seem something beyond fair. As we start to see things like there being only 200,000 workers left, they would start to see their situation as more and more desperate. Indeed they would start to seem to be a sort of slave caste.<p>A quick search for information to try to see if this is indeed what is happening yielded this [1] study which seems to lend some credence to this possibility. In particular they examined the percent of individuals in each income group, based on real incomes. These showed that the middle class has been substantially chiseled out (shrinking from 38.8% to 32% of the population) but that alone is disingenuous. What&#x27;s happening to every class&#x27;s population? Here are their data for this specific question:<p>- Change in share of each class as a percent of US population. 1979 -&gt; 2014<p>-----<p>- Rich: 0.1% -&gt; 1.8%<p>- Upper Middle Class: 12.9% -&gt; 29.4%<p>- Middle Class: 38.8% -&gt; 32%<p>- Lower Middle Class: 23.9% -&gt; 17.1%<p>- Poor or Near-Poor: 24.3% -&gt; 19.8%<p>-----<p>This seems incredibly positive at a glance, but this change in demographics has indeed resulted in very large measurable changes in inequality. In particular in 1979 the bottom 3 economic classes controlled 70% of all income, with the upper class and rich controlling the remaining 30%. Today those numbers have practically swapped. The lower 3 classes control 37% of all income to 63% for the rich and upper middle class. Though, on the other hand, the top groups have also more than doubled in size.<p>One other issue I noticed is that the study (at least at a somewhat intensive glance) did not seem to meaningfully consider that many things critical to the growth and health of the lower classes, such as education and housing, have inflated in price far beyond nominal inflation rates. So real income measurements can be quite misleading. Nonetheless, I&#x27;m not sure why but I had not strongly considered this before. This article emphasizing the inequality as more of a changing of demographics than an existing demographic making themselves even richer was what brought it to mind.<p>[1] - <a href="https:&#x2F;&#x2F;www.urban.org&#x2F;research&#x2F;publication&#x2F;growing-size-and-incomes-upper-middle-class" rel="nofollow">https:&#x2F;&#x2F;www.urban.org&#x2F;research&#x2F;publication&#x2F;growing-size-and-...</a>