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IF the rich in all kinds of organizations gave half of the money they made in all forms of compensation to the poor or lower middle class how much more money would the poor and lower-middle-class workers at their organization make? For example, if everyone who worked as executives at Walmart gave up half of their compensation and put it in a pot to distribute to the rank and files retail and clerical workers at that company, how much extra money would it be for the regular employees? Would it solve the problem?
Highly paid jocks and movie stars would also participate too! Your thoughts.
I see you're new to C-D, welcome, there's a search feature that you can use and find this very topic has been talked about in the past on here numerous times for the last 10+ years, sometimes in this subforum, sometimes in other subforums like the Personal Finance one.
Here's just some of the recent ones, you could spend days/weeks reading through them all, enjoy:
Here is an idea: Everyone who works for an organization who makes more than one million dollars in income, stock options, and bonuses would agree to give up one half of their income to the staff who make under $50K a year. What impact would that have?
This is not a discussion of the merits of fairness or inequity. This is not a discussion of the merits of a higher minimum wage or how much people should make. INSTEAD, it is a simple question of mathematics.
IF the rich in all kinds of organizations gave half of the money they made in all forms of compensation to the poor or lower middle class how much more money would the poor and lower-middle-class workers at their organization make? For example, if everyone who worked as executives at Walmart gave up half of their compensation and put it in a pot to distribute to the rank and files retail and clerical workers at that company, how much extra money would it be for the regular employees? Would it solve the problem?
Highly paid jocks and movie stars would also participate too! Your thoughts.
2/3 of the economy is consumer consumption. The poor and middle class spend nearly 100% of their after tax income. The rich, however, save and invest much more. Therefore, the immediate impact would be akin to an economic stimulus to the economy and total GDP, which likely, in turn, will increase production to supply more goods and services, which in turn, will increase employment opportunities.
It's basic econ 101. Put the money in the hands of people who will spend it to get the most economic stimulus. The problem, however, in our current economy is that much of what we buy is produced in other countries....so any economic stimulus will go to create revenue and opportunity in other countries. If we were producing nearly all of what we consume, as a nation, the economic stimulus would create the ripple impact of increased production and demand for labor.
In the long run for the under 50K crowd. Very little impact.
Short run: A lot of inflation.
^ this ^
When I first read the title of this thread I thought "the rich are savors and (much more importantly) investors, the poor are spenders. A redistribution from the rich to the poor would likely result in dramatically increased spending which would drive up inflation.
When I first read the title of this thread I thought "the rich are savors and (much more importantly) investors, the poor are spenders. A redistribution from the rich to the poor would likely result in dramatically increased spending which would drive up inflation.
No. Inflation results from increasing the money SUPPLY....not shifting where the existing money is going.
While there are several types of Inflation, the basic definition is a sustained increase in price level. When there are more dollars (or any currency) competing for a given product it decreases the buying power of said currency and increases the price. Look to any point in history where Hyperinflation has occurred for examples.
Take WalMart for an example. The top five execs made about about $63M last year. Let's be crazy and assume in total there's a billion in compensation being paid to execs making a $1M plus.
Take half, that's $500M.
WalMart was over 2M employees. Let's be extra conservative and say only 1/2 of them qualify as beneficiaries of this scheme. That means 1 million people would get an extra $500 a year. Reality would be far less.
Yeah, the 500M number is probably REALLY high so for a company like walmart. After you get past the top dozen or so you're going to go under 1mil. pretty quickly.
Heck, you probably have more total payroll of people making over 1million on some of the top payroll baseball teams.
While there are several types of Inflation, the basic definition is a sustained increase in price level. When there are more dollars (or any currency) competing for a given product it decreases the buying power of said currency and increases the price. Look to any point in history where Hyperinflation has occurred for examples.
There is the theoretical "full employment" inflation. That is when a shortage of of workers bids up the price of labor and that price is subsequently passed on to the consumer in terms of higher cost. The only really other type of inflation (other than the deprivation or depletion of a vital resource) results from an increase in the money supply. Shifting monies from the rich to the poor is not inflationary. More spending, in this scenario, will lead to more production if the extra spending results in demand exceeding supply. If the producers are not able to increase production, then prices will rise. This assumes competition in the marketplace. If demand is such and a seller decides to try to raise prices as apposed to increasing supply....they may lose customers to producers or sellers who don't. It's hard to raise prices and not lose sales in a competitive market, unless all producers and sellers are forced to raise prices, assuming no collusion.
Last edited by Indentured Servant; 04-17-2019 at 10:45 AM..
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