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PaperclipPerfector  11mo ago (text post)   29677 thread views

Culture War Roundup for the week of December 18, 2023

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there is less inequality but the upper ceiling is so much lower that it's legitimiately harder to get paid the same amount in PPP dollars there than in the US.

Why do you say "but" when those are the same thing?

There is less inequality in Indonesia than the US, but it's much harder to get paid US$30,000 PPP adjusted in Indonesia than the US.

Whereas if it were easier, higher achievers would tend to earn more, increasing inequality. What am I missing?

Not necessarily. Consider two societies. In A people either earn $100k or $50k or $20k, each is equally likely. In B people either earn $150k or $160k and each is equally likely. In this case everyone in B earns more than everyone in A, even though B has a lot lower inequality and it is a lot easier to make $160k in society B than society A, despite A having greater inequality.

You can also have the opposite situation, Consider B' where everyone either earns 15k or 16k except for one person who makes $50k. B' has basically the same level of inequality as B (if the population size is large, the single person making 50k won't change total inequality by much) and this level is lower than the level of inequality in A. However it's still a lot easier to make at least $50k in A (2/3rds of the population does it) compared to B' (only one person does it), despite B' having lower inequality.

I have underestimated the complexity of the question and your preparedness to consider it in detail. I idly wonder whether there are any real-world circumstances that would make those distributions likely, but I'm not willing to press the point.

I think the point is that western societies have enough of a de facto floor that inequality is mostly driven by the ease of reaching an upper middle class salary.

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