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2 Issues to take up with the statistics presented here.
Measures of income only cover monetary compensation, not benefits. Much of the increase in total compensation for the middle class over the last 10-15 years has been in the form of more dollars going to cover increasing benefit costs - i.e. heath care. While some of these rising costs have been passed on to employees, employers have born higher expenses. The dollars that are covering these expenses are coming out of the wage gains middle and working class employees may have recieved.
For higher income workers the benefit costs are a lower % of their total income, so as benefit cost increases eat up a lower % of their comp increase.
i.e.:
Worker 1 - A Corporate VP makes $200k, $10K in healthcare costs to the company. Comapny budgets 5% annual increase in employee expenses for the year The VP's 5% increase = $10.5k. Healthcare goes up 10% = $1k. $10.5k increase - $1K HC increase leaves $9.5k for more salary - a 4.75% income increase
Woker 2. Production line worker makes $40k, $10K in HC costs. 5% increase = $2.5k -$1k in HC costs = $1.5K increase in salary, a 3.75% increase.
Keep doing 4.75% increases vs. 3.75% for a decade and voila - major wage gap.
Measures of income only cover monetary compensation, not benefits.
Interesting and well made point, do you have an figures beyond guesstimates?.
I would be interested in light of the number of companies that have passed on more of the cost of health care to employees or who have dropped providing such insurance all together. Additionally you need to demonstrate convincing evidence that actual benefits haven't decline in recent years as more family income is based upon part time work without any defined company benefits.
Interesting and well made point, do you have an figures beyond guesstimates?.
I would be interested in light of the number of companies that have passed on more of the cost of health care to employees or who have dropped providing such insurance all together. Additionally you need to demonstrate convincing evidence that actual benefits haven't decline in recent years as more family income is based upon part time work without any defined company benefits.
Issue #2 which I'd say impacts the stata is investment returns. This data is all pre-crash. We have been on a 25 year stock market bull run where the Dow has risen from - what, 1700-1800? - up to over 14,000 last year. The top end owns more investments and have enjoyed the fruits of these gains. Lets look at the data when 2008 & 2009 results are included, I bet you'll see the gap has closed significantly.
Issue #3 - Immigration. We are importing poor peolpe. 20 million low wage illegals skews the data. Given the curve of the income chart dumping 20MM into teh bottom end makes both the bottom & top quintiles reach further into the middle makes the gap larger.
again, just looking at what may be skewing the stats. Not arguing if the gap is good or bad, growing or shrinking,etc. But under the theory of "lies, damn lies & statistics" I'd like to see some of these things answered before we decide if this is a problem & what, if anything, needs to be done about it
Either you are one of the most objective posters or you didn't read your link. I prefer to think of you as the former.
"The researchers found that the ratio of employer-paid health-insurance premiums to total household income was 20% for those who were insured in the lowest-income group. Of that group, which earned $14,800 a year on average, only 22% were covered at all."
That 20% stands in stark contrast to the 3.3% health - insurance - premium - to - income ratio for the highest income group, which averaged $210,000 annually. Nine out of 10 of those workers are insured."
Now correct me if I am wrong, but you link would seem to indicate that the lowest rung workers are seeing stagnant wages and lower participation in company provided health care while upper managements salaries continue to increase as do their benefits?
This runs counter to your argument, and in point of fact negates it. Since your original objection was based upon he numbers previously provided as being based upon income and not total benefits, it would appear through your article that even if total benefits were included they would demonstrate that benefit packages for upper income individuals cancel out, if not exacerbate, the disparity in income.
The rich have been getting richer for so long that the trend has come to seem almost permanent.......................
But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.
Either you are one of the most objective posters or you didn't read your link. I prefer to think of you as the former.
"The researchers found that the ratio of employer-paid health-insurance premiums to total household income was 20% for those who were insured in the lowest-income group. Of that group, which earned $14,800 a year on average, only 22% were covered at all."
That 20% stands in stark contrast to the 3.3% health - insurance - premium - to - income ratio for the highest income group, which averaged $210,000 annually. Nine out of 10 of those workers are insured."
Now correct me if I am wrong, but you link would seem to indicate that the lowest rung workers are seeing stagnant wages and lower participation in company provided health care while upper managements salaries continue to increase as do their benefits?
This runs counter to your argument, and in point of fact negates it. Since your original objection was based upon he numbers previously provided as being based upon income and not total benefits, it would appear through your article that even if total benefits were included they would demonstrate that benefit packages for upper income individuals cancel out, if not exacerbate, the disparity in income.
From the lead of the WSJ article:
Quote:
Rising health care costs – and the steps employers are taking to cope with them – are worsening the income gap in the U.S., according to McKinsey Global Institute researchers.
Rising health-insurance premiums are accounting for a disproportionate share of the lowest-paid employees’ compensation compared to higher-income employees, McKinsey’s Byron G. Auguste, Martha Laboissière, and Lenny T. Mendonca concluded in their recent article
I also read what was available of the study as well. The part of the WSJ article you have quoted is confusing to me as it is in contradiction to the headline and the lead of the story. I chalked that up to it being a poorly written or editted summation of the overall study. After all the article is a very short story recapping what is probably alot of info from the study. Never the less, the overall study did support my thesis.
The only reason the rich reversed the trend and stopped becoming richer in the past two years is because they had their wealth invested in a phony get-rich-quick scheme (the stock market) which proved in October that a fool and his money are soon parted. (The fact that people are rich is no evidence that they are smart.) The poor were standing back far enough from the bubble, so were not immediately affected. However, the mechanism is still in place by which in the long run, the rich will always get richer because they write the rules in their own favor.
When all is said and done regarding the fact of stratified economies, most people can readilly see the basic socio-economic construct as the unfair situation it has always been.
Some have posted here in defense of the status quo, others see the threat of an economic leveling that punishes those with the least resources. It is hard to get any consensus in America on matters economic.
We have a situation today that challenges the very notion of free market globalism, a short lived attempt to spread the pain of monopoly capitalism over the entire planet. Some will hang on to those notions with all the zeal of a back country preacher, but, in the end, the truth is there for any and all to see. America has long been a place of economic miracles, but, like those tent preachers who've been caught healing the paid shills in the audience, the fat cats on wall street have been outed as the thieves they really are. Miracles aside, cheating is the fast track to wealth in America.
Income disparity is just another name for the long standing belief that money rules and labor drools. Some have taken to calling this "class envy", but, is it really envy that wells up in the minds of those who have lost everything they worked their entire lives for? If it is envy, then I assume we can safely say we live in a country wherein envy drove the masses to change the balance of power. When you've been cheated, you seldom "envy" the person who cheated you.
When all is said and done regarding the fact of stratified economies, most people can readilly see the basic socio-economic construct as the unfair situation it has always been.
Some have posted here in defense of the status quo, others see the threat of an economic leveling that punishes those with the least resources. It is hard to get any consensus in America on matters economic.
We have a situation today that challenges the very notion of free market globalism, a short lived attempt to spread the pain of monopoly capitalism over the entire planet. Some will hang on to those notions with all the zeal of a back country preacher, but, in the end, the truth is there for any and all to see. America has long been a place of economic miracles, but, like those tent preachers who've been caught healing the paid shills in the audience, the fat cats on wall street have been outed as the thieves they really are. Miracles aside, cheating is the fast track to wealth in America.
Income disparity is just another name for the long standing belief that money rules and labor drools. Some have taken to calling this "class envy", but, is it really envy that wells up in the minds of those who have lost everything they worked their entire lives for? If it is envy, then I assume we can safely say we live in a country wherein envy drove the masses to change the balance of power. When you've been cheated, you seldom "envy" the person who cheated you.
Don't forget the fat cats in the corporate suites as well....
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