« The 20 best songs of the 1960s | Main | The Female Brain »
Pulled from the comments on Alex
The Bartels result may be just showing that in an economy when average incomes are are rising rapidly, the low income groups benefit more than the higher income groups. Since WWII, with the exception of Eisenhower, no Republican was president when the average income was rising rapidly.
Here is the link for a relevant graph. Here is a graph of the Bartels result. And here is Greg Mankiw on inequality and unions, in case you missed it, perhaps Greg's best post so far.
Posted by Tyler Cowen on August 23, 2006 at 06:31 PM in Economics | Permalink
Comments
I do not generally follow Mankiw's blog too closely, but
if this is his best post so far, then he is not so great.
What is good about this post?
He claims that the correlation between rising inequality
and declining unionism is explained by the sectoral shifts
away from manufacturing. This may be true in the US, but
then in substantial parts of Western Europe, including some
countries that do not have high unemployment, such as the
Netherlands and Scandinavia, these same sectoral shifts have
occurred, but unionism has held up and inequality has not
increased, or increased nearly as much as in the US.
Then he argues that unionism has declined in the US because
people do not want to join unions and have elected politicians
who are anti-union, partly as a result. This is probably
correct. There are also plenty of studies that Americans
are more tolerant of inequality because we see greater mobility
in society with it. So, while this does not say declining
unionism caused higher inequality, it does agree that the
two are linked via socio-political-economic attitudes.
Posted by: Barkley Rosser at Aug 24, 2006 1:19:34 AM
Hmm. I'm suspicious of the time lags and expectations involved here. Maybe when people expect lots of future income, they vote to share the wealth (Democrats). When people see economic insecurity coming, they vote for lower taxes, greater nativism, and more aggressive defense (Republicans). IMHO as a Southerner, the Republican Party has been much more successful at exploiting popular fears, especially in the South, than the Democrats have been.
Posted by: DK at Aug 24, 2006 8:35:03 AM
I also think many voters believed that Republicans would get spending under control, along with those tax cuts. However, spending (mainly military) is out of control, with no end in sight.
Posted by: Mcwop at Aug 24, 2006 8:41:24 AM
Interesting how the long run secular movements in average income
seem to have an extremely strong correlation with the long run
secular shifts in the stock market PE.
Just a random observation.
Posted by: spencer at Aug 24, 2006 9:28:11 AM
For my thoughts (on taxes, especially) see
http://www.rasmusen.org/x/2006/08/24/sources-of-rising-income-inequality/
Posted by: Eric Rasmusen at Aug 24, 2006 11:15:47 AM
It is very true that wages/incomes rose rapidly under Eisenhower... However, Eisenhower was a "different" kind of Republican. Eisenhower actually thought that our immigration laws should be enforced. Yes, a shocking idea that subsequent Republicans have only had contempt for. Indeed, Eisenhower showed just how easily illegals can be removed and the rule of law upheld. Using just 1,075 agents Eisenhower removed at least 80,000 illegals and another 500,00 to 700,000 fled on their own.
See "How Eisenhower solved illegal border crossings from Mexico" (http://www.csmonitor.com/2006/0706/p09s01-coop.html) for an article describing the highly successful 50s immigration crackdown.
Yes, wages once went up under a Republicann. A Republican who believed in enforcing the law. Notably, Sen. Lyndon Johnson (D, TX) and Pat McCarran (D, NV) favored Open Borders on behalf of the cheap labor interests. Clearly little has changed in 50 years.
If Bush acted like Eisenhower, wages would be rising for working people today… And Bush might not be the least popular president in decades… Not a chance of that.
Posted by: Peter Schaeffer at Aug 25, 2006 9:24:36 PM
The nature of the "evolving economy" since the end of WWII is the reason
for growing economic inequality. After WWII, America was "king". Slowly
however, advances in technology and diversification of the economy, made
people less accountability for anyone but themselves. Nowadays, the whole
U.S. economy is based upon "acquirism". Like squirrels, people spend their
lives competing for the best housing, the best schools, the best car, etc.
This "acquirism" has sped up the economy and has led to the abandonment of
respect for laws and moral responsibility for others. Since WWII, the unions
have gone the exact opposite direction that Eugene Debs, the famous union
leader, had anticipated. As the unions became more of a protection for
middle-class workers, to protect their interest and welfare, the "low wage"
workers were abandoned by unions. You see many low wage workers today, who
make up a substantial portion of the workers, who essentially have few if
any rights to protect themselves from the mercy of arbitrary and unfair
actions of the employer. This is driven by the "acquiristic" competition
amongst people today. Some are winners (and are protected), while others
are losers (having virtually no rights to protect them).
Posted by: Jim at Aug 26, 2006 8:34:14 PM
