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Job families and income inequality

Paul Krugman has an interesting blog post today about income distributions, and why the rich tend to feel poorer than they used to. He noted in passing that he had always been taught that income distributions were log-normal for most incomes, switching over to Pareto for large incomes.

I dug in to this dataset and found an interesting follow-up tidbit. His statement about distributions seems to be correct. What’s interesting is that the cross-over point between the two seems to be happening at roughly the 75th percentile, at an income of $87.5k. Apparently incomes above this threshold behave like “large incomes,” with a power-law scaling that suggests a self-similarity of the economies of the rich to the very rich to the really very rich; whereas incomes below this threshold are following a completely different model, bunching up more towards middle values.

Here’s a graph of this income data on log-log axes, to make it clear. The Y-axis is the (decimal) log of household income, in dollars; the X-axis is the (decimal) log of the percent of society, so +2 corresponds to the poorest members of society, 1 to the top 10%, 0 to the top 1%, etc. Note that the curve is linear on its left-hand side (i.e., a power-law curve, a Pareto distribution with α = 0.56) and curves down sharply at a log-percentile of 1.39, i.e. at the 75th percentile of the distribution. The original data is available here.

Income distribution on log-log axes

This suggests that incomes in these two ranges are driven by fundamentally different dynamics, which shouldn’t be surprising. What I think is surprising is that, once upon a time, the “two dynamics” were those of earned income versus investment income, but this cutoff point seems far too low for that to be the case. Instead I suspect that we’re seeing a switch between a “professional class” — which includes much of our modern super-rich [cf. Christina Freeland’s recent article in The Atlantic, and particularly her note that today’s rich tend to be rich from earned rather than inherited or purely passive income] — and a “working class.”

The boundary isn’t the old blue/white-collar boundary; many white-collar jobs are clearly on the bottom side of the hook. (And NB that jobs can pay more than $87.5k and still be logically on the bottom end of the hook; first, actual salaries include things like regional variation, which this chart averages over nationally; and second, a job could represent e.g. the upper end of a job ladder which has a log-normal distribution, and thus be a bit above the threshold. The distribution we’re seeing here is a sum of two distributions, Pareto for jobs which pay higher on the average and log-normal for ones which pay lower)

It may be very interesting to characterize the growing income gap in our society by trying to characterize individual job ladders (i.e., sets of positions which are roughly equivalent, which individuals are expected to move across over the course of their career — although not necessarily at a single company) by their geographically-normalized income distribution. I would bet that if we compared the income distributions for a few hundred job ladders, we would find that they tended to fall into two pretty clear buckets, and that looking at the qualitative characteristics of those two buckets would tell us a lot about who is actually winning and losing in this new world. I’d bet that some of the results would be surprising, especially for jobs close to the edge — e.g., traditionally white-collar jobs now in the low bucket, or blue-collar ones in the high bucket.

Published in: on January 14, 2011 at 11:28  Comments Off on Job families and income inequality  
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A news tidbit not to miss.

Tom DeLay, formerly R-Texas, the former House majority leader who helped build and control the Republican majority for years, was sentenced to 3 years in prison for money laundering, in what was essentially a political malfeasance case. (It had to do with illegally funneling corporate contributions into campaigns)

Two things are important to remember about this story.

First, it’s not a small deal. The former House majority leader is going to prison for crimes directly related to the way he operated his office. While the story might be somewhat buried at the moment because of our recent spasm of political violence, it’s something which belongs on the front pages.

Second, what’s very interesting in this case is that DeLay’s defense essentially said that this was a political witch-hunt, charging him criminally for doing what “everyone was doing.”

There are a lot of things worth parsing in this defense. First of all, I’m fairly certain that everyone was not, in fact, doing it. If they were, then we have a much more serious problem on our hands, of the complete failure of the rule of law; and if everyone in the House was doing that while he was majority leader, it suggests a much deeper malfeasance.

But also, note the implication: it admits that there was a widespread (among whom?) perception that corruption was widespread and acceptable, and that this was a normal and legitimate way of running the government. Remember, this is what one of the operational leaders of the party was saying — it’s not some random guy in the street. If the leaders feel this way, then the members will follow. And you get the party you pay for.

(Of course, this is from the same party whose chairman got caught spending a couple thousand of the party’s money at strip clubs, ostensibly to woo donors.)

Published in: on January 10, 2011 at 15:25  Comments Off on A news tidbit not to miss.  

U. S. Copyright law: A modest proposal

America’s copyright law has been amended several times over the past few decades, each time increasing the effective term of copyright. As a result, the current “public domain horizon” is 1923 —only a small fraction of works published since then have ever left copyright, and no new items are scheduled to enter the public domain until 2019. This has been largely at the instigation of some large rights-holding companies, most notably the Disney Corporation, who have a very strong reason to want to keep some of their old copyrights active. But the cost to the rest of society has been high; more and more works are going out of print (especially as the publishing industry suffers and cuts down on its backlists), becoming permanently unavailable, or becoming “orphans,” with no clear copyright holder and so no possibility of ever making their contents available to anyone.

I have a modest proposal.

A simple reduction in the term of copyright is, quite simply, never going to pass Congress. The legislative history, and the amount of money being funneled in to lobbying this issue, has ensured that. But consider what the owners of these copyrights really want to protect. Disney wants to protect the copyrights on Mickey Mouse because, frankly, they’re worth a fortune to them — the heart of their corporate identity. But a publisher holding on to a mid-list book or film right from the 1950’s isn’t doing so because it’s worth a fortune; it’s because it’s better to hold on to it than not. The actual value to the publisher of these works is trivial, even negative if one considers the cost of bringing them back into print.

So: I propose that we amend the copyright code so that the duration of copyright is set to 56 years, twice the duration specified for the first copyright term under the old 1909 Copyright Act; and following that, the holder of copyright may extend the copyright annually and without limit on duration — but that each such extension incur a fee which is significant but not exorbitant; say, $500 (to be adjusted for inflation) per year, and that this be applied retroactively (if at all possible; this may be difficult to implement) to all works copyrighted in 1963 or later.

(Why 1963? Because then the first term expires in 2019, exactly like it does under current law)

Any work which is still in “active use” by its publisher is presumably worth far more than this; the cost is trivial and the rights-holder basically gets an indefinite copyright on it. But any work which isn’t – which includes the overwhelming majority of all works – would expire after the 56-year window. The registration fee requirement would eliminate the need to define “active use” by statute (a problem in orphan works law) by simply leaving it up to an individual rights-holder to determine whether they still consider this right to be of value. This is a fairly long window, and I would personally prefer if it were somewhat shorter, but it does achieve the principal purpose of copyrights – to ensure that the creators of works are compensated during their lifetimes – while allowing a steady flow of works to enter our common treasury.


Published in: on October 11, 2010 at 22:38  Comments (16)  
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De mortuis nil nisi veritas

A few weeks ago, a fellow by the name of Jack Kershaw died in Nashville. The Dickson Herald, one of the nearby papers, has this obituary of him, hailing him as a renaissance man, an “﻿﻿artist, sculptor, homebuilder, farmer, lawyer, lecturer, Southern historian and Vanderbilt graduate.” It talks especially about his poetry and the lit mag he helped found, describing it as “one of the most influential publications in the history of American letters.”

What’s strange about this obituary is that, apart from a glancing half-sentence mention, it doesn’t say anything about what Kershaw was most famous for: being the attorney for James Earl Ray, the man who killed Martin Luther King. It gives similarly short mention to his great work of sculpture, a 27′ equestrian statue of Nathan Bedford Forrest, a general most famous for his war crimes during the Civil War; he was particularly noted for the systematic slaughter of any black soldiers who surrendered to his troops, and was later the first Grand Wizard of the KKK. I should note that Kershaw was not alone in considering Forrest a hero, a fact which in itself is rather alarming; but reading this man’s history, and the things he fought for, makes putting up a statue of this guy is something akin to putting up a statue to an Einsatzgruppe﻿führer.

The New York Times has its own obituary of Kershaw. This one gives  a little more context into the fellow who just died, including his most famous quote — “Somebody needs to say a good word for slavery.”

Lovely fellow. Couldn’t be happier to see him in a box.

Published in: on September 24, 2010 at 11:43  Comments Off on De mortuis nil nisi veritas  
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Oh, this is going to be awesome.

Sharron Angle is running against Harry Reid (the Senate majority leader) this November. During the primary, she ran as a hard-line ultra-conservative, playing to the Tea Party. Once that ended, she took down her web site and replaced it with one suggesting that she’s a moderate.

Reid decided to put up a copy of her old web site, on the theory that such data should be preserved and publicly available.

Now Angle is suggesting that she wants to sue Reid for copyright violation.

Yes, definitely. Suing someone to make them stop repeating what you said in the middle of a highly-publicized election is an excellent strategy for burying the story. Please, go ahead and do this. I will make popcorn.

Published in: Uncategorized on July 7, 2010 at 11:14  Comments (8)  

Well, crap.





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Analyzing proposition 14

(Paraphrased, with some modifications, from a comment in ‘s journal)

Prop 14 has been characterized — I’d say mischaracterized — as opening up the primary system, or allowing people to vote in primaries other than their own. It really does something much deeper: It replaced the primary / general election system with a general / runoff system. The round 1 election is now not a party matter, but rather a general election; the top two finishers meet in a November runoff.

My thoughts on where this will lead, quoted from the thread:

But the measure isn’t about allowing non-party-members to vote in party primaries; it’s a wholesale conversion of the primary / general system to a general / runoff system. It means that we no longer have a phase 1 election which has a low turnout and is dominated by party bases; an interesting open question is whether the new phase 1 election, which is the one which behaves a lot more like a many-way general election, will start to draw the same participation levels that old general elections used to pull.

It’s definitely true that this will reduce the number of minor candidates; absent a cheaper primary phase, people need to run a working general election campaign in the first phase, and fewer people will do that. For candidates who are running inside a party infrastructure, that probably increases the effective power of party bosses, since their choice of which candidate to back is now being done before a primary season which could have given a seemingly minor candidate a chance to make a visible impact and garner attention. For candidates running outside of any hope of getting party backing, this just further marginalizes them, but to be honest they weren’t ever going to be major players in the general election, so that’s a smaller change.

So what I would expect to see now is: pre-election, there’s more internal party politicking over which candidates will get party backing. The first-round elections will be dominated (as in current general elections) by people with party backing or people with sufficient independent resources to mount their own campaigns. There will be a lot more noise around these elections, and probably turnout somewhere between current primary and general numbers. In most cases we’ll probably see the top two be from the two major parties, but the big exceptions will probably be when a big-money candidate comes in and challenges the party picks; those are going to be Interesting Years.

Then we’ll have a “general election” which is really a runoff election. Not yet sure what those are going to look like, since we don’t have much experience with those in California.

There’s a Washington Post article arguing that this won’t do much to moderate California politics. I think this is actually wrong; if the power of party insiders goes up at the expense of base voters, parties have an even stronger incentive to pick a candidate who has a strong chance of both making it to the runoff and then winning in a two-person general election. Candidates on either fringe will both have less ability to influence their own parties and less ability to run on their own effectively.

Is this a good thing or a bad thing? Honestly, I’m not sure. I’ve generally suspected that, in a country of this size, there are benefits to moderate governance; on the one hand this slows down reforms that I’d like, but it also slows down crazy people that I don’t like, and having seen what happens when crazy people end up in broad power, I’d say that avoiding this is a reasonable tradeoff. California has a slightly different calculus than the US as a whole; the state is traditionally a testing ground for new political ideas from both left and right, and so letting crazy people from all sides run the state is… well, the status quo. That has its merits and flaws (as seen in our lovely state budgeting process) but it does give the country a good way to field-test experimental ideas on only 1/8th of its population.

On the other hand, what better place to field-test a new election system? I say we give it a run and see what happens. Cthulhu knows, this state won’t be afraid to change it to something else if it doesn’t work out. Or even if it does.

Published in: on June 9, 2010 at 14:57  Comments (9)  
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Proud to be an American

I’ve gone through an enormous emotional roller-coaster today. This morning, halfway through filling out my ballot, I was struck hard by a sense of civic pride, hard enough that I had to pause for a moment before continuing. I had just voted for a man named “Barack Hussein Obama,” who is black and half-Kenyan, and I was allowed to vote for him, and there was a reasonable chance he would be elected president.

Do you know what this means? It means that all of the stuff they taught us in elementary school, about how democracy is supposed to work, is actually true. Despite all of the cynicism we’ve acquired over the years, it turned out to be true for the simple reason that enough people thought it was that it happened that way.

That’s not to say that this country doesn’t have flaws; but systematically, as a people, we see them as flaws to be corrected, not the way that they should be.

A few weeks ago, I read an article in the Washington Post interviewing people in Virginia about how they planned to vote. One man that they were interviewing told the interviewer (angrily) what his plans were: “I’m voting for the nigger.”

No, I’m not going to bleep that word out. I want you to read it and realize all the things that sentence means. This is someone who by his own admission is racist; who is not well-educated, who does not live in a big city, who would call someone that in front of a journalist without being ashamed of it.

And this person thought about the country, and thought about his choices, and decided that he would, nonetheless, vote for him. The interview made it clear; he was thinking about the candidates’ economic and foreign policies, and made a decision based on his feelings and the issues.

Know what that means? That the American people aren’t stupid at all. They can have feelings and even prejudices, and still think about things and make decisions based on more than just that. The average American actually seems to understand the issues of this election pretty well. And I find that inspiring.

Today I saw some editorials interviewing people around the world. I was struck by interviewees in places like Egypt and Venezuela expecting that if Obama actually tries to govern, he’ll be stymied or possibly even killed by “them,” some shadowy force that actually runs the country. I know why they’re assuming this; it’s because that’s how it works in most of the world. “They” might do all sorts of things for display, but “they” keep a permanent grip on power.

I suspect that over the next six months, the world is going to change just because of that one thing. Because in most of the world, people look at America and assume that it works just like their countries; that ultimately, everything is run by corruption. And they’re going to see that no, Obama really is in control, and really does run the country — which means that all of their beliefs and hypotheses about how everything bad is inevitable are going to run up very visibly against reality.

And I suspect that al-Qaeda’s recruiting is going to fall through the floor, because suddenly the old spiel about how America is the great Satan and is really secretly plotting against you just doesn’t ring as true when the president’s middle name is Hussein and his skin is darker than yours.

And most of all, what I’m thinking about tonight is Martin Luther King’s last speech, when he said that though he may not get there with us, our country will reach the promised land.

You know what’s the most amazing thing of all about that speech, for someone who has one foot in this country and one foot in another? It’s that that speech was one generation ago. In one generation, we’ve gone from lynchings and civil rights marches to a black man being elected as president. Ultimately, there seemed to be more fooforaw about Obama’s race in the media than there was among the public; Americans, especially younger Americans, seemed to think that it was just a normal thing. In one generation, the country changed what it believed because it was genuinely convinced.

If this doesn’t shake you deeply, you don’t know what this is like everywhere else.

In Israel, the same time ago takes us to the Six-Day War. Twice that distance takes us to the Holocaust, and ten times that distance to various pogroms. And those things might as well have happened yesterday; everyone is still as rawly aware of them as they are of things that happened last year.

In Europe, in the Middle East, in all of the world, things simply don’t change on the scale of a generation, not without an enormously bloody war.

But in America, they do. Because ultimately, when all is said and done, we actually believe in what we preach.

That democracy is the best way to run a government, and elections should be free and fair. That people should be able to rise to the level of their ability, not just on the basis of their contacts and their power. That, ultimately, we are a single nation, no matter what we look like or disagree about.

My God. I still can’t type these things without crying.

Yes, we can, America. We just did.

ברוך אתה יי, אלוהינו מלך העולם, שהחיינו, וקיימנו, והגיענו לזמן הזה.

Published in: on November 4, 2008 at 22:38  Comments (16)  
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