On Tue, 06 Aug 2013 16:50:37 +0100, scott wrote:

>>> Not exactly the huge disparity you describe.
>>
>> 3*15 = 45
>>
>> 3*60 = 180
>>
>> The gap is the important thing, not the factor.
> 
> That doesn't make any sense, to keep the gap the same the poorest 20%
> would need a far higher rate of income growth than the richest 20%.
> Eventually, in a few decades, if the gap is kept at say $45k, the
> richest will need to be earning $1m or whatever and the poorest $0.95m.

Sure it does:

45 - 15 = 30

180 - 60 = 120

120 > 30

The factor isn't the important thing, the disparity is the important 
thing.

Both groups are subject to the same 600% inflation.  Those who now make 
$120K more than they did at the start of the period are far better off 
than those who only make $30K more, especially when both groups have 
similar fixed costs (the cost of a gallon of milk is not dependent on the 
purchaser's income - if I make $6K/year, I pay $4.50 for that gallon of 
milk, the same as someone who makes $100,000/year).

The base fixed costs are the same.

>> The initial gap is what makes the disparity that much larger,
> 
> Go back far enough the presumably the gap gets almost to zero dollars?

I never claimed that.

>> and as I said, when you compare the numbers to the rate of inflation,
>> the story gets much worse for those in the lower 20th percentile of
>> income.
> 
> Those figures already take into account inflation, as they are all based
> on the value of USD in 2007.

Citation?

Jim

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