Wage inequality gets worse. “Wage” you say?

“Wages for the richest 1% in the U.S. have soared 160% over the past four decades while the share of wages for the bottom 90% has shrunk, according to new data from the Economic Policy Institute. While there has been plenty of research on worsening economic inequality in the U.S., the new EPI analysis paints a clearer picture. The new findings are based on W-2 earnings, which include realized stock options and vested stock awards – forms of compensation not typically offered to the bottom 90% of earners.”

Source: Wage inequality gets worse

The standard definition of wages: “a payment usually of money for labor or services usually according to contract and on an hourly, daily, or piecework basis  often used in plural”

Stock options and stock awards are forms of compensation at risk. It is paid over many years. There is no guarantee that options will produce an actual reward. Stock awards typically come with performance incentives, restrictions and the ultimate value is based on the price of the stock. That is why executives receive the bulk of their compensation in other than cash. IN SHORT, they are not wages.

The cost of such compensation is carried by shareholders, not taxpayers.

The large numbers often involved may produce envy and cry’s of inequality, but they have no impact on the wages of average Americans who I suspect are unwilling to change their form of compensation.

17 comments

  1. As Quinn said, wealth is not a zero sum game. Just because someone else makes more money doesn’t mean it comes from you. In addition, somewhere between 80-90% of millionaires made it on their own, they didn’t inherit it. This means they either innovated, or had a business that employed others. The hate the rich trope is nothing more than jealousy. Get off your bum and either innovate or start a business instead of complaining about what others have.

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  2. I favor soak-the-rich taxation, for one thing because large disparities in income are widely regarded as unfair. This perception strengthens the push toward socialism, which I hope we can avoid.

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      1. First, let’s define rich. Then why shouldn’t everyone be treated fairly and what have the rich done to harm the little guy. In fact, most have created new industries, new opportunities, millions of jobs that never existed plus the bulk of their wealth comes from investing thereby creating new wealth, not taking from others.

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      2. “In fact, most have created new industries ,,,” More than 50% of rich people have created new industries??

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      3. As I said define rich. If you look at the very top of wealthy, yes most have created new industries or new businesses and concepts that have benefited the world.

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      4. Did Buffet create a new industry, or even a new business? Not so far as I know. This effusive praise of the rich seems wildly exaggerated, to me. And, in any event, it’s irrelevant to my observation above.

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      5. Well, Buffets salary is $100,000 a year. Everything else is in investments and he has pledged to give virtually all of it to charity. What about Musk, Gates, Bezos, Jobs, etc., etc. but in any case why vilify the successful, why do the rest of us deserve more of what’s theirs? What prevented most of us from doing what they did?

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      6. “Well, Buffets salary is $100,000 a year. Everything else is in investments and he has pledged to give virtually all of it to charity.” Does any of that bear on whether he started a new industry? I would not have objected if you had said some rich people have founded new industries. But you said most have, which is absurd. But when I question this, I’m accused of vilifying the rich!

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      7. I think if you want to put the effort into it, you will find the root of most of the very rich is someone who started a new industry, innovative new business strategy and the like and along the way brought many people with them up the ladder. Stop nit picking words and focus on the big picture if you are serious.

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      8. So now your claim is not about most of the rich, but “the root of most of the very rich”? How foolish of me to take seriously the words you actually wrote.

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      9. The public definition of rich is very subjective…unless you can specifically define an amount and a logical reason as to why then whom can you punish with additional taxes.

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      10. Mik, “rich” means you have a lot of money. The logical reason for taxing the rich is the Willie Sutton principle: That’s where the money is.

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      11. “Everyone is rich relative to someone who has less.” Taking that as an observation about English usage, that is not true.

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  3. IMO…a future tool by our government leaders will be to punish the “rich” with additional stock market taxes to support the “poor”…heads they win and tails you lose.

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