Re: Greg Mankiw's Blog: Pay at the Top

In a brief post, Mankiw points to a NY Times article that says:

the share of concert ticket revenue taken by the top 1 percent of pop stars — measured by sales per concert — rose to 56 percent in 2003 from 26 percent in 1982.

The quote is interesting in itself, leading one to conjecture the various means by which the top is separating from the bottom, but the comments are quite compelling.

One commenter said:

talking about ticket sales for musicians ignores touring costs

Another:

If corp. execs account for only 8.5% - 20% of the top 0.01 percent of the income scale, who are the other people up there?

And the reply:

Tiger Woods, Michael Jordan, Barbra Streisand, Steven Spielberg, Mick Jagger, Julia Roberts....

There are 750 major league baseball players alone, a majority of whom probably earn over $1 million per year.

Me: It would be interesting to see a breakdown of the top 0.01 percent of the income scale.

Another commentator directed the conversation to another side of the issue:

What we should be concerned about [is] the difference between the poor and their costs of living.

As Jeff Sachs put it "inequality is rising because 200 years ago everyone was poor."

If Bill Gates stock goes up or down (resulting in greater or lesser inequality) that does not hurt me if my incomes and costs are constant.

This is because wealth is not a zero sum game. By having more money that does not mean that you are taking the money from other individuals.

Another:

Actually, inequality is presently rising because the middle class is shrinking.

Another give and take:

Every trip to the gas station reminds me that my costs are not constant, while my paycheck changes far less frequently, and not always for the better, especially when my diminishing medical/dental benefits are taken into account.

And the response:

We do not b[u]y gasoline for its intrinsic value but for an amount of travel at a level of comfort and prestige. So since car engines have for the last 15 years or so gotten about 1% more efficient each year (and hybridization make cars about 25% more efficient in one whack) and because the fuel cost is less than the other costs of driving and, for what you get, cars have been getting cheaper (they used to go 100,000 miles now they go more than 200,000 miles, air bags etc.) the cost of an amount of travel at a level of comfort and prestige is falling all the time.

Questions, questions...