At Work

What is this thing called inequality?

The main reason for the gap between the many and the few which has happened over decades, is lack of economic growth.

The main reason for the growth in wealth of the few is growth in their investments in the form of stocks, real estate and their businesses.

Americans enjoy the benefits of a global economy which has lowered the price of many goods and services Americans buy each day.

Unless we stimulate economic growth which creates demand for skilled workers there is no reason for worker wages to rise. Competition for workers will increase the value of cash and non-cash compensation.

Economic growth must occur on a global basis because no nation can survive in isolation.

Personal economic wellbeing in the form of income and wealth cannot be had without personal growth taking advantage of every opportunity. The job of the worker is to increase his/her value to the employer.

The few do not prevent the many from opportunities.

Government’s role is not to force transfers of wealth, but to create an environment that stimulates economic growth to the benefit of all.

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5 replies »

      • Thought a little more about this.

        Humans have been walking around the earth for maybe 100,000 or so years (depends on who you ask, and how you ask I guess). Importantly, during the first 99,750 years or so, other than royalty, most humans lived on the equivalent of maybe $700 or so a year (in inflation adjusted terms) … dirt poor (and I mean dirt, just barely above subsistence level). That is how poor is defined today < $2/day(15% of the world's population). Low income is $2 – $10 a day (56% of world's population)

        Then, about 250 years ago, something radical happened. We had a revolution in trade, then an industrial revolution, then "revolution after revolution", it came more frequently, it became commonplace, so regular, it changed from revolution to evolution – radical though each change may have been. And, you know what, just 10 – 12 generations ago, people started to get richer, and then they got richer and richer and richer. That wealth started to show up first mostly in places like America, home to capitalism, a place where private property rules were enforced and defended. As those rules spread to other countries, wealth started to accumulate there as well.

        And here we are today, in America, with a median household income of about $50,000 – pretty much unchanged, in inflation adjusted terms, since 15 years ago.

        Assuming we can continue to achieve the 2.5% or so growth rate we have had (off and on, higher and smaller, etc. since world war II), that median household income in America of about $50,000 (assuming no avalanche of immigration), will increase to about $90,000 in 25 years, and assuming the trend continues, to $160,000 in another 25 years (50 years total).

        Can the trend continue? And, will we, in trying to address those below the median, effectuate policies and rules that will chill the growth by those above and at the median? That is the promise of socialism some embrace:
        – The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries. Winston Churchill
        – The problem with socialism is that you eventually run out of other peoples' money. Margaret Thatcher
        – The function of socialism is to raise suffering to a higher level. Norman Mailer

        Importantly, remember that few people working today and earning at the household median wage, if anyone, will likely still be employed 50 years from now. So, inequality of who? Inequality concerns about a yet to be born person who in 50 years will be at the median household income in 2066?

        Just as importantly, consider what is not measured effectively by changes in income or relative income. As scholar James Q. Wilson has stated, β€œThe poorest Americans today live a better life than all but the richest persons a hundred years ago.” In 2005, the typical household defined as poor by the government had a car and air conditioning, two color televisions, cable or satellite TV, a DVD player, and a VCR. If there were children, especially boys, in the home, the family had a game system, such as an Xbox or a PlayStation. In the kitchen, the household had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker. The typical poor American has more living space than the average European. The typical poor American family was also able to obtain medical care when needed. Poor families certainly struggle to make ends meet, but in most cases, they are struggling to pay for air conditioning and the cable TV bill as well as to put food on the table. Consumer items that were luxuries or significant purchases for the middle class a few decades ago have become commonplace in poor households. As a rule of thumb, poor households tend to obtain modern conveniences about a dozen years after the middle class. Today, most poor families have conveniences that were unaffordable to the middle class not too long ago.

        Consider this. I am not poor. But, Saturday, I finally arrived at a place many other Americans, including many of the "poor" achieved years ago with their smart (Obama)phones. I activated my new cell phone, an iphone 6 SE. Compared to the pager I used just 20 years ago, this thing is magic! Compared to the digital camera I bought as a gift just 10 years ago, this thing is super magic!!! It serves as my watch, my alarm clock, my internet connection, my radio, my camera, my fax machine, my calculator, it orders pizza, car service, delivers and sends mail, … And remember folks, it does each and every one of those things better than each and every one of the machines it replaced!

        Poor? Income inequality, you gotta be kidding me.

        Just a day ago, it was mothers day. My mom passed 15+ years ago. But, when I think of poor, I remember my grandmother, my baba, who was born in 1895 in Slovakia, survived a peasant existence, and came to America in 1925 (just before they reduced immigration). In her arms was my mom, Mary Eleanor, a babe of 11 months. What a risk my baba took as she made her way through Ellis Island. She had left it all behind (what little she had, mostly family). She showed up with what she could carry along with Mary Eleanor. Not too long before my baba died in 1975, we talked (mostly me and Mary Eleanor) about what my baba had seen in her lifetime, including but not limited to:
        Modern Olympics,
        Electrification,
        Shift to autos
        Controlled flight in airplanes
        Radio
        Pro football
        Two world wars
        Washing machines and dryers
        Pro basketball
        Korea
        Vietnam
        Television
        Jets
        Computers
        Rockets
        Armstrong on the moon AND BACK
        and so much more…

        My baba's income, all of her life, would qualify her for poor, or at best lower middle class. Here is a lady who had five children, who made ends meet during the depression by renting rooms, taking in laundry, and, (don't tell anyone) brewing moonshine during prohibition.

        I was 23 when she passed. There was always a smile, a quiet pride in her family. I never, ever heard her complain about anything, not once, not ever. Certainly not about income inequality because, you see, she considered herself rich. And she was!

        Like

      • We have become more willing to envy and criticize others than to work for what we want these days. Look what is written by the Washington millennials in gov’t the press releases and Tweets. The have no clue.

        Like

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