Wealth gap

whynot_31

There has been a lot of conversation lately about how wealth is not equally distributed in NYC or the US. This video discusses how it is distributed on a worldwide basis.

Spoiler alert: It is even more lopsided.

...it would be interesting to see the statistics over time.

pragmaticguy

Didn't bother to watch the video but the question remains....WHY does wealth have to be evenly distributed? Which of course will open this thread up to numerous comments and should be a source of debate for at least a week.

whynot_31

Wealth has never been evenly distributed.

It is closely correlated to things like education, country of origin, opportunity, work, skills, inheritance, etc.

The appeals to "shared responsibility" seem to lose traction as they become more of an "other".

I.E. We often feel the most responsibility to someone who lives in our apartment, and then progressively less as the circle is expanded to identifiers like neighborhood, city, state, nation, continent, world.

pragmaticguy

Wealth shouldn't be evenly distributed...at least not by mandate. There's no reason why I should get some of Buffet's money just because. In any event, lots of people talk about the uneven distribution of wealth but I'll bet they're not giving the homeless people they might see in the street a $10 bill. Because when it hits their pockets is when they stop talking about it.

whynot_31

When I think about it, money is not wealth.

If you were to take away everything of monetary value from someone of middle or working class means, it is very likely they could pretty quickly return to a similar standard of living.

....Thier friends, family, education, work ethic, physical health, behaviors, and positive outlook tend to pretty quickly get them back on their feet.

stacey

PragmaticGuy said:

Wealth shouldn't be evenly distributed...at least not by mandate. There's no reason why I should get some of Buffet's money just because. In any event, lots of people talk about the uneven distribution of wealth but I'll bet they're not giving the homeless people they might see in the street a $10 bill. Because when it hits their pockets is when they stop talking about it.

I read a great article that unfortunately is spoken in the voice of Cookie Monster:

Yes, there always going to be rich and poor. But we used to live in country where rich owned factory and make 30 times what factory worker make. Now we live in country where rich make money by lying about value of derivative bonds and make 3000 times what factory worker would make if factories hadn't all moved to China.

Capitalism great system. We won Cold War because people behind Iron Curtain look over wall, and see how much more plentiful and delicious cookies are in West, and how we have choice of different bakeries, not just state-owned one. It great system. It got us out of Depression, won WWII, built middle class, built country's infrastructure from highways to Hoover Dam to Oreo factory to electrifying rural South. It system that reward hard work and fair play, and everyone do fair share and everyone benefit. Rich get richer, poor get richer, everyone happy. It great system.

Then after Reagan, Republicans decide to make number one priority destroying that system. Now we have system where richest Americans ones who find ways to game system -- your friends on Wall Street -- and poorest Americans ones who thought working hard would get them American dream, when in fact it get them pink slip when job outsourced to 10-year-old in Mumbai slum. And corporations have more influence over government than people (or monsters).

It not about rich people having more money. It about how they got money. It about how they take opportunity away from rest of us, for sake of having more money. It how they willing to take risks that destroy economy -- knowing full well what could and would happen -- putting millions out of work, while creating nothing of value, and all the while crowing that they John Galt, creating wealth for everyone.

That what the soul-searching about. When Liberals run country for 30 years following New Deal, American economy double in size, and wages double along with it. That fair. When Conservatives run country for 30 years following Reagan, American economy double again, and wages stay flat. What happen to our share of money? All of it go to richest 1%. That not "there always going to be rich people". That unfair system. That why we upset.

whynot_31

cookie monster wrote: It how they willing to take risks that destroy economy -- knowing full well what could and would happen -- putting millions out of work, while creating nothing of value, and all the while crowing that they John Galt, creating wealth for everyone.

Cookie Monster-

When someone claims to be creating wealth for everyone, you have to realize that their primary motivation is to create wealth for themselves, and that -by doing so- some wealth MAY end up being created for others.

Rarely do people do things for "the common good".

stacey

And thus the difference between then and now.

pragmaticguy

Well, I'm not sure about that and the 7.2% of people that are still unemployed, not including those that have stopped looking for work altogether, would probably not agree either.

whynot_31

Stacey-

Do you think people had a more "common good" approach to creating wealth in the past?

I tend to believe humanity's motivations and goal were indentical then to what they are now. We are no more (or less) altruistic than we ever were.

...it is just that in the present environment, some are positioned to achieve incredible amounts of wealth, while the vast majority is not.

Is the question we should be asking "how rich is too rich"? Or, "how poor is too poor"?

pragmaticguy

If the things that you need to sustain yourself and/or your family cost one dollar more than what you have then you're too poor. As for being too rich....I don't think that really matters. Of course, there's always being "too envious" which is what many of the people that are left are when it comes to those that they (we? me?) classify as being too rich.

whynot_31

Yes, envy is a problem.

I suppose we could define envy as occurring whenever someone has enough, but wants as much as others.

...which is kind of confusing because even billionaires likely feel this toward multi-billionaires.

The problems stem from not being able to objectively state when someone "has enough", and then applying this standard at both ends of the spectrum.

pragmaticguy

As Oliver Twist once said..."please sir, may I have more?"

whynot_31

It is important to be polite when you are in a relative position of powerlessness.

A successful uprising seems unlikely.

pragmaticguy

The powerless ones are polite to the rich, the rich are patronizing to the powerless. Either way, the ones without much of anything are going to feel like crap.

stacey

whynot_31 said:

Stacey-

Do you think people had a more "common good" approach to creating wealth in the past?

I tend to believe humanity's motivations and goal were indentical then to what they are now. We are no more (or less) altruistic than we ever were.

...it is just that in the present environment, some are positioned to achieve incredible amounts of wealth, while the vast majority is not.

Is the question we should be asking "how rich is too rich"? Or, "how poor is too poor"?

Yes I do. I am not looking for a handout but I do want benefits. I have been continuously employed full-time for the past 27 years. Before that I worked part time since I have been 14.

When I first started working companies would give you health insurance, there was no money taken from your paycheck to pay for your own healthcare. 401-k's were matched almost .75 for every dollar. People were able to save and were able to feel secure in their job. They were willing to go above and beyond for their job and many people started at a company and retired from that same company. Owners/companies took pride in their workers, they had office outings, christmas bonuses and EVERYONE seemed happy. While this was happening NY was still at the top of finance, as well as shipping, textiles, etc. Now you are an "as is" employee, you must pay for your health insurance, you are expected to give more than you receive and worry about if you will be let go before you get too old to start again in another position.

It's not about being rich its about the excess. I mean really do you need a $15,000 Hermes bag? Do you have to have 8 cars for a 2 person family?

stacey

I also find that it was easy to find a second job to work when I needed more money or when I was saving for something big. Now so many people are looking for work that its hard to find a second job.

whynot_31

In the past, I think companies provided the benefits you described because OTHER companies were also providing them.

Now, as you point out, very few of the businesses do so. Companies no longer need to compete for workers in the same way as they once did.

Companies "race to the bottom" in order to survive, and

-yes- make a profit.

Competition from overseas as well as cheaper labor markets in the US, plays a big role in the process.

stacey

whynot_31 said:

In the past, I think companies provided the benefits you described because OTHER companies were also providing them.

Now, as you point out, very few of the businesses do so. Companies no longer need to compete for workers in the same way as they once did.

Companies "race to the bottom" in order to survive, and

-yes- make a profit.

Competition from overseas as well as cheaper labor markets in the US, plays a big role in the process.

That's why the quality of work is crap just to save some $

whynot_31

Quality has become less important, now that we have a culture of obsolesence and ever changing fashion and technology.

....many industries which previously counted on skilled workers, now can be just as effectively staffed with quickly trained, disposable ones.

As a result, such workers have very little bargaining power.

stacey

That's why I don't understand how so many people can be anti-union.

whynot_31

By creating an artificially high price for labor, unions can result in companies moving their production elsewhere, or outsourcing labor intensive functions to non-unionized domestic 3rd parties.

The fundamental problem is one of an over supply of labor, relative to the demand for labor.

In such an environment, attempts to artificially constrict the supply (i.e. unionize) often fail.

...but usually result in some catchy slogans.

witch-king

By creating an artificially high price for labor, unions can result in companies moving their production elsewhere

This implies there is a "natural" price for labor.

Labor faces a structural disadvantage: capital is mobile, labor is not (in most cases). The best case scenario for labor are high levels of unionization and the unionization of entire industries either nationally or globally. These conditions would create a disincentive for investment flight from one area to another.

whynot_31

The natural price of labor is where supply and demand intersect. This will vary by region, among other things.

Needless to say, going against what it is natural is part of nature. Cue Love and Rockets.

pragmaticguy

I'm not pro-union per se, but let's face it, companies won't do things unless they're forced to whether by worker strikes or boycotts. But even those things won't evenly distribute wealth. It will just give people a better fighting chance. As for companies giving benefits...when I worked for a major bank they were nice to have but I've been self-employed for over 20 years and as of now my health insurance costs about $16,000 a year. I get no 401K or pension and I'll have to live off what I save and social security if that will even be around. Retirement is no longer in my lexicon. Of course, the more I have to save and the more I have to spend on health insurance means the less I have to spend on cars, housing, etc so this contributes to a drain on the economy which has been stagnating for five years now. It's a downward spiral.

whynot_31

I agree, altruism is very rare, if existent at all.

The problem is that many employees have to rely on this elusive trait, because their power to demand things thru strikes and boycotts is very limited in the present environment.

Instead, they have had to result to government intervention. ...a much weaker tool.

pragmaticguy

Unfortunately government intervention for employees only works where OSHA is concerned. If a company wants to discontinue their pension plan they get the government to take it over through the Pension Guaranty Board which always results in a lower payment to the retired employee. Hence, it appears that government doesn't give a hoot about the lowly worker, only about the stockholders who pay a low tax rate on their capital gains anyhow.

whynot_31

I was thinking in terms of government setting and enforcing a minimum wage.

Enforcement is lax.

pragmaticguy

Enforcement of minimum wage is quite a high priority I would think. Of course if it's hidden it's tough for the feds or the state to know but once it comes out the fines and penalties are huge. Jail time may also be involved. As for setting a minimum wage...well, that's something different.

whynot_31

It is especially difficult in communities with large numbers of undocumented workers.

But, even among those on the books, enforcement remains a struggle: http://www.dol.gov/whd/statistics/2008FiscalYear.htm

Needless to say, if government does not enforce a minimum wage, organized labor has really difficult job constricting the supply of labor in low wage and low skill industries.

pragmaticguy

There are quite a few low skill industries that pay more than minimum wage. I have seen warehouse jobs going for $12/hr which of course is not a bundle but still better than $7.25. But then, if everyone made $25/hr who'd be left to clean the bathrooms at $7.25.