working class

[Bradford DeLong]

>At 05:49 PM 6/29/2002 -0700, Joanna wrote:
>>At 01:14 AM 06/29/2002 -0400, Brad wrote:
>>>Let me enunciate as gospel the rule-of-thumb that Bob Litan and I
>>>agreed on: that more than 3 times your current consumption level
>>>strikes you as absurd and wasteful luxury. The median family income
>>>in America today is going to be about $54,000 this year. Taking a
>>>rough guess at the progressiveness of the tax code, you would need an
>>>income of about $220,000 to get you to the point where, from the
>>>perspective of the median, you are starting to buy stupid and
>>>pointless luxuries that nobody really needs... That gets you down to
>>>2% of families in the upper class.
>>
>>This is an honest question: why distinguish on the basis of 
>>luxuries? Why not distinguish on the basis of whether one has to 
>>work for one's living or not? In some families, two earners can 
>>pull in 220,000 but, depending on how extended they are, they could 
>>be a month away from the sidewalk. Others (who have capital) also 
>>have the same income without ever having to work a day in their 
>>life. Granted, both cases depend upon the same economic system, yet 
>>it makes more sense to me to put the first family in the working 
>>class and the second in the capitalist class.
>>
>>I am not trained in economics, so please, why not slice it and dice 
>>it this way?

I think the big issue is, "What is the cost of job loss?" If the 220K 
working family has an easy time picking up new jobs at 
near-equivalent wages, it's hard to see why their skill-based wealth 
is any different from asset wealth. Asset wealth can vanish too. If 
the cost of job loss is high, however, then I think you're very 
right...

Brad DeLong