Wealth Inequality in America

I believe James, that you are missing the point completely.

As you like to say..

One of the points Orejon is trying to make is that so much of just average success (being well-off enough) is so much more dependent on circumstances outside of what you can directly control that what used to work doesn't work anymore.
The definition of "success" isn't even the same anymore.

Add to this the fact that politicians and corporations are now exceedingly good lovers and most people lose hope.

But that's the problem with the old fashioned non reality based thinking that you and your kind display.
Somehow all of you refuse to even acknowledge the basic difference between now and then.
Your success is really a factor of things that you tend to take for granted.
Hence the inequality that ore keeps bringing up.

 

JW the economy that existed for your parents no longer exists for us fam. You must see that.

 

I wholeheartedly disagree with the belief that "it is much more dependent on circumstances outside of your control" to be successful. If that is your belief, then I don't believe you will ever be successful. Just being well enough off in most cases can be solved with hard work and education. There are people struggling today to find work because of the weak economy. But in a good economy, hard working educated people find decent paying jobs. Then they can work themselves up through promotions.

So because there are bad examples of politicians and CEO's...you believe the whole system is corrupt. There is no perfect world and no perfect system, but I would say ours is pretty damn good. Like I said before, if you don't like our system go live in Bolivia and tell me how that works out for you.

 

I understand that you whole heartedly disagree with me.

That's entirely the point.

And for those who hardwork and education and all the so called 'right' things that should by your formula grant them the same measure of success that you yourself seem to have found...
But have not found..
They would wholeheartedly disagree with you.

But of course, because that's your reality so it must be everyone's reality and if its not then they must be doing it wrong.

 

Maybe I'll take you up on that one. Well, I would if I could afford the trip, lol. Bolivia is one of the countries in Latin America that is beginning to take steps toward opening up opportunities for people traditionally locked out of opportunity, especially for the indigenous and blacks. My parents are both first generation college grads in their families and I have gone beyond them in education and am doing far worse.

I don't believe the system is corrupt. My experience with it is that it produces these types of outcomes because it is intended and designed to do just that. Policies are skewed to produce these types of results, whether it's transportation, education, utility, farm subsidy or a whole host of other policies that are designed to transfer wealth away from consumers with less disposable income, socialize any losses and privatize all gains. All perfectly legal, but not the outcomes the citizenry is told that their elected representatives are working for, namely the elusive "shared prosperity".

 

The economy always changes. But the economy just determines the amount of jobs that are available. The economy isn't directly responsible for wealth inequality or mobility. The wealth gap is because people who have money can invest and grow their capital. Those who have lower incomes do not typically have the money to invest and grow their money. So instead of lower income people saying "How do I become a millionaire?" they should be saying what can I do to make a better living. So if you're making minimum wage, go to a trade school and find a way to make $20/hour. Those opportunities exist. But everyone looks at the wealthiest person and gets frustrated at how rich they are instead of focusing on their own lives. Take small steps to get to your goal. I firmly believe that is possible to earn a decent living here in the U.S.

 

There are millions of hardworking people out there who are looking for jobs. I was unemployed for six months in 2009 when the economy went bad, so I understand that. But the poor economy just affects the number of jobs out there, it has nothing to do with the wealth equality debate. If this country we're not a pillar of hope and opportunity then we wouldn't have 11 million illegal immigrants come to this country looking for a better life. If America was as bad as you say it is, we would see 11 million people leaving and going elsewhere looking for work. But people understand this place still gives them the best shot at a better life. If you don't see that...then don't let the door hit you where the good Lord split you.

 

Shared prosperity only works if you have the entire society working towards a common goal with the same level of education/skill. You see this in many impoverished farming countries. Everybody does farming and they all export the same crop. Those are countries where you see that everybody is equal...no extreme rich and no extreme poor. Personally, I would never want to live in a place like that.

 

The jobs that are available are low paying. Sure there are jobs but its quite useless to work and still not make it through the month.
Not useless but unilaterally depressing and stressful.

It was not like this 50 years ago.
That was why we had stay at home moms and one income households.
This no longer applies.

Low wages are the new raise. For many many people

Just be thankful you aren't one of them.

And the name of the dabate is wealth inequality so I don't know what you're talking about.

 

I disagree. It is very simple to achieve a balanced approach to shared prosperity: end the deliberate skewing of taxation away from earnings and toward work - this has an inherent class bias, harming those who work for capital rather than those whose capital works for them (whether or not they have earned it because of their superior education and effort). Divide all profits equally between workers and shareholders according to the value of their percentage of inputs in the finished product. Require shareholders to lose their capital (rather than funding bailouts) if workers have to lose their jobs. Require even amounts of social investment (education, infrastructure, public health) across the society, regardless of the income level of the target community, etc.

 

An interesting article on the Worker vs. Corporation Divide

http://www.businessinsider.com/companies-need-to-pay-people-more-2013-8

One of the big reasons the U.S. economy is so lousy is that big American companies are hoarding cash and "maximizing profits" instead of investing in their people and future projects.

This behavior is contributing to record income inequality in the country and starving the primary engine of U.S. economic growth — the vast American middle class — of purchasing power. (See charts below).

If average Americans don't get paid living wages, they can't spend much money buying products and services. And when average Americans can't buy products and services, the companies that sell products and services to average Americans can't grow. So the profit obsession of America's big companies is, ironically, hurting their ability to accelerate revenue growth.

One obvious solution to this problem is for big companies to pay their people more — to share more of the vast wealth that they create with the people who create it.

The companies have record profit margins, so they can certainly afford to do this.

But, unfortunately, over the past three decades, what began as a healthy and necessary effort to make our companies more efficient has evolved into a warped consensus that the only value that companies create is financial (cash) and that the only thing managers and owners should ever worry about is making more of it.

This view is an insult to anyone who has ever dreamed of having a job that is about more than money. And it is a short-sighted and destructive view of capitalism, an economic system that sustains not just this country but most countries in the world.

This view has become deeply entrenched, though.

These days, if you suggest that great companies should serve several constituencies (customers, employees, and shareholders) and that American companies should share more of their wealth with the people who generate it (employees), you get called a "socialist." You get called a "liberal." You get told that you "don't understand economics." You get accused of promoting "wealth confiscation." You get told that, in America, people get paid what they deserve to get paid: Anyone who wants more money should go out and "start their own company" or "demand a raise" or "get a better job."

In other words, you get told that anyone who suggests that great companies should share the value they create with all three constituencies instead of just lining the pockets of shareholders is an idiot.

After all, these folks say, one law of capitalism is that employers pay their employees as little as possible. Employees are just "costs." You should try to minimize those "costs" whenever and wherever you can.

This view, unfortunately, is not just selfish and demeaning. It's also economically stupid. Those "costs" you are minimizing (employees) are also current and prospective customers for your company and other companies. And the less money they have, the fewer products and services they are going to buy.

Obviously, the folks who own and run America's big corporations want to do as well as they can for themselves. But the key point is this:

It is not a law that they pay their employees as little as possible.

It is a choice.

It is a choice made by senior managers and owners who want to keep the highest possible percentage of a company's wealth for themselves.

It is, in other words, a selfish choice.

It is a choice that reveals that, regardless of what they say about how much they value their employees, regardless of what euphemism they use to describe their employees ("associate," "partner," "representative," "team-member"), they, in fact, don't give a damn about their employees.

These senior managers and owners, after all, are earning record profits while choosing to pay their employees so little in many cases that the employees have to live in poverty.

And the senior managers and owners add insult to injury by blaming the employees for this: "If they want to get paid more, they should start their own company. Or get a better job."

It is no mystery why America's senior managers and owners describe the decision to pay employees as little as possible as a "law of capitalism": Because doing this masks the fact that they are making a choice.

But it is a choice.

Importantly, if big American companies were struggling to earn money, as they were in the early 1980s, we would not be having this conversation. Even if big American companies were only earning average profits, this wouldn't be an issue. But the "efficiency" and "shareholder-value" drive that began in the 1980s has now gone too far the other way. Just look at these charts...

CHART ONE: Corporate profits and profit margins are at an all-time high. American companies are making more money and more per dollar of sales than they ever have before. Full stop. This means that the companies have oceans of cash to invest. But they're not investing it. Because they're too risk averse, profit-obsessed, and short-term greedy.

Corporate profits as a percent of GDP

Business Insider, St. Louis Fed

CHART TWO: Wages as a percent of the economy are at an all-time low. Why are corporate profits so high? One reason is that companies are paying employees less than they ever have as a share of GDP. And that, in turn, is another reason the economy is so weak. Those "wages" represent spending power for American consumers. American consumer spending is revenue for other companies. So the profit maximization obsession of American corporations is actually starving the rest of the economy of revenue growth.

Profits as a percent of GDP

Business Insider, St. Louis Fed

CHART THREE: Fewer Americans are employed than at any time in the past three decades. Another reason corporations are so profitable is that they don't employ as many Americans as they used to. This is in part because companies today regard employees as "costs" instead of human beings who are dedicating their lives to the organizations that, in turn, are supporting them and their families. (Symbiosis! Imagine that!) As a result of frantic firing in the name of "efficiency" and "return on capital," the U.S. employment-to-population ratio has collapsed. We're back at 1970s-1980s levels now.
Employment as a percent of the population

Business Insider, St. Louis Fed

CHART FOUR: The share of our national income that American corporations are sharing with the people who do the work ("labor") is at an all-time low. The rest of our national income, naturally, is going to owners and senior managers ("capital"), who have it better today than they have ever had it before.

Labor share of income

Business Insider, St. Louis Fed, Bureau of Labor Statistics

In short, the obsession with "maximizing short-term profits" that has developed in America over the past 30 years has created a business culture in which executives dance to the tune of short-term traders and quarterly earnings reports, instead of balancing the value created for employees, customers, and long-term owners.

That's not what has made America a great country. It is not what has made some excellent American corporations the envy of the world. It's also hurting the economy.
SEE ALSO: Greed WAS Good ... Then We Overdid It

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

Read more: http://www.businessinsider.com/companies-need-to-pay-people-more-2013-8#ixzz2bhn7Zmhs

 

This, this, a thousand times this!

 

pretty much

i remember a program we had called SEED, which allowed people to work part-time, but get paid for 40 hours if they were in nursing school

they phased out that program which was responsible for the personal and professional enrichment of a lot of people

now it's all about the money

 

its all about getting rich as quick as possible fuck who gets hurt in the process. Really has to make you wonder if some people are greedy or are all of us greedy but only few get to capitalize on it.

 

Whatever happened to not just extracting short-term profits, but actually investing in future growth, i.e. your workers?

 

Fuck the future its all about now now now. As much money as possible duuuh. Fuck people its all about profits.

 

I think it's the latter. But it also raises the question, how many millions does someone need? Not want, but need? A lot of these CEOs rake in millions and millions a year, over the course of years. When is it enough?

Greed begets greed, and the more money these guys get, the more money they want, whether they need it or not. It's kind of sad, really.

 

They never get enough.

 

Well they would argue the upkeep of their lives is expensive as hell.
I don't live too far from Madaam CJ Walker's house and her great great grandson still lives there. The house is beautiful as hell and i happened to see him as he was going for a jog and he caught me staring at the house. Dude said don't be too impressed because between taxes and keep the place looking nice as well as functioning it cost more than what most families make per year. Shit really made me think. Between keeping the lawn well manicured plus regular staff and the stiff 18 to 25k for taxes it could cost well over a hundred grand a year just to keep the house up and running. I can see how they could justify it but then I think who the fuck really needs a thirty room for them and their family.

 

Yep. In his case I understand the significance of that house and what it means to him and to his family. But my philosophy is that if it takes that much money to run the household then it's time to downsize. And it seems like he doesn't fall in the same categories as the CEOs who get golden parachutes and get millions every year guarantees.