Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I apologize if this article has been posted previously, however I could not seem to find it here. So here we go. According to the article linked above disparity in income equality has been on the rise in America for over four decades now (ranking us now on par with Cameroon and the Ivory Coast) where as the average pay of corporate executives has risen (often while the pay of their workers has lowered). For me this presents two problems. The obvious first is the disparity in incomes between the average worker (the reduction of their pay in many instances) and respective CEO. This is especially egregious when one considers that some individuals within our country believe that these high income earners deserve tax cuts. This situation becomes extremely problematic when coupled with issue two. As the incomes of these select few or .01 has risen costs associated with living have kept pace with this precipitous rise. This is especially true of America’s urban centers such as NY, LA, DC, Miami, and in some instances Chicago.
A great anecdote I like to use is that of a lady (that I will call Ann) in the NY metro area. Ann started a business some years ago and became relatively successful. She and her spouse purchased a condo on the Jersey side (as Manhattan was totally out of reach) and lived a comfortably middle class existence. One day Ann won the NY state lotto for 15 million, and upon hearing the news believed herself to be newly wealthy. She immediately begin to have dreams of Manhattan life dancing in her head as living there had always been a dream. Well guess what, after taxes Ann took home over 7 mil and after looking at real estate on the island realized that she in fact still could not afford to live there. She now realizes that she is far better off than what she had been previously however for arguments sake she could still be considered middle class. (True story)
Why is this the case? But the very executives spoken of previously. In a city full of these high income earners prices of real estate have risen to keep pace with their inflated wages. The result is that you and I are priced out. NY is a glaring example however this sort of cyclical relationship occurs in other cities across the country. The execs lower our salaries with an apology that the company is not doing well enough or lay you off entirely. They then except a generous bonus with a golden parachute of incentives and stock options. They then take this money and spend it increasing the costs of real estate further squeezing you. And then finally they have the gall to actually turn around and state that they need a tax cut. This sort of thing needs to stop. This relationship makes the US’s current economic situation obvious. The wealthy are gobbling up as much of the economic capital as they can squeezing the remainder of us. Tax cuts to these individuals will do little to dissuade this as they have demonstrated. They will continue to undercut real wages, outsource jobs, and demand even higher pay while doing so. While this is good for the existence of their respective companies it does little for the American people. I guess I have written all of this to ask, are there any other solutions and is this a correct assessment? I believe it to be true, however I would love to be proven wrong. While I believe in personal responsibility I also believe that the above referenced to be downright scary and Dickensian. Oh, and I apologize for the length of this initial statement.
I agree completely. Well articulated argument. The problem has been with board of directors. They provide no oversite of the executives in the companies and that is because stockholders have very little interest in the board, because stocks are so transitory now.
It used to be that a person owned stock because they wanted a dividend from that stock so management and management salaries were important on the bottom line. Now people make money from stock from speculation. It has changed the whole way that managment is worked.
But a simple fix of the problem is to raise the taxes on the very wealthy. This will bring incomes and income disparity a little closer.
About 40 years ago the aristocrats noticed too many newly rich workers were showing up at the exclusive places. They decided this had to stop so they had Ronnie Raygun elected and we were started on this road to ruin. Since then working people including professionals have had their living standards lowered (especially if they got trapped in a worthless McMansion deal) and cannot afford the nice places. This suits the people that are actually running the economy and government. They got wealthier and regained their aristocratic exclusivity.
We could reduce all speculation by applying a 70% tax on any gains from securities or commodities held for less than a year.
Since the gap is at its widest since the Great Depression and like then, we're going through economic hardships. I wonder if the cycle will repeat and we'll see another "boom" for middle class families like we saw in the 1940s-1970s. Hopefully we will.
The S&H generational theory goes into details how things in society tend to rhyme every 80 years.
80 years ago we had the Great Depression, now its the Great Recession
80 years ago we saw the same wide gap in income inequality, we're seeing it again
Today's Millennials have been shown to share some characteristics of the the GI generation that came of age during the Great Depression. I remember reading somewhere that some of today's Millennials are actually wanting the stability of the middle class lifestyle with a job and a home much like the GI generation did too when they were their age.
I apologize if this article has been posted previously, however I could not seem to find it here. So here we go. According to the article linked above disparity in income equality has been on the rise in America for over four decades now (ranking us now on par with Cameroon and the Ivory Coast) where as the average pay of corporate executives has risen (often while the pay of their workers has lowered). For me this presents two problems. The obvious first is the disparity in incomes between the average worker (the reduction of their pay in many instances) and respective CEO. This is especially egregious when one considers that some individuals within our country believe that these high income earners deserve tax cuts. This situation becomes extremely problematic when coupled with issue two. As the incomes of these select few or .01 has risen costs associated with living have kept pace with this precipitous rise. This is especially true of America’s urban centers such as NY, LA, DC, Miami, and in some instances Chicago.
A great anecdote I like to use is that of a lady (that I will call Ann) in the NY metro area. Ann started a business some years ago and became relatively successful. She and her spouse purchased a condo on the Jersey side (as Manhattan was totally out of reach) and lived a comfortably middle class existence. One day Ann won the NY state lotto for 15 million, and upon hearing the news believed herself to be newly wealthy. She immediately begin to have dreams of Manhattan life dancing in her head as living there had always been a dream. Well guess what, after taxes Ann took home over 7 mil and after looking at real estate on the island realized that she in fact still could not afford to live there. She now realizes that she is far better off than what she had been previously however for arguments sake she could still be considered middle class. (True story)
Why is this the case? But the very executives spoken of previously. In a city full of these high income earners prices of real estate have risen to keep pace with their inflated wages. The result is that you and I are priced out. NY is a glaring example however this sort of cyclical relationship occurs in other cities across the country. The execs lower our salaries with an apology that the company is not doing well enough or lay you off entirely. They then except a generous bonus with a golden parachute of incentives and stock options. They then take this money and spend it increasing the costs of real estate further squeezing you. And then finally they have the gall to actually turn around and state that they need a tax cut. This sort of thing needs to stop. This relationship makes the US’s current economic situation obvious. The wealthy are gobbling up as much of the economic capital as they can squeezing the remainder of us. Tax cuts to these individuals will do little to dissuade this as they have demonstrated. They will continue to undercut real wages, outsource jobs, and demand even higher pay while doing so. While this is good for the existence of their respective companies it does little for the American people. I guess I have written all of this to ask, are there any other solutions and is this a correct assessment? I believe it to be true, however I would love to be proven wrong. While I believe in personal responsibility I also believe that the above referenced to be downright scary and Dickensian. Oh, and I apologize for the length of this initial statement.
Why?
Because Europe and Asia are no longer smoking post-war ruins paying whatever we charge for our exports.
Think near zero percent interest rates are helping to keep the price of real estate high and the buying power of US dollars low?
...all of the income and wealth gains for middle Americans from the “golden years” between 1945 and 1975 have now been wiped out. Or more accurately, have now been transferred to the very rich. The top 1% holds 34% of the nation’s wealth while the bottom 50% holds just 2.5%. The bottom 40% owns absolutely nothing.
These effects and numbers can be numbing, even dizzying. But it’s important to understand that they have not been the result of random events or impersonal market forces. Rather, they have followed as the intended consequences of the relentless application of a wide array of government and industry policies.
The massive run-up in debt is one such policy. The wealthy are net lenders. This means that massive public and private debt transfers interest income to them from the rest of the economy. Another method for effecting massive wealth transfer: Beginning in 1981 the Reagan administration effectively stopped enforcing anti-trust laws, allowing monopolies to gouge everyone who had to buy their products...
About 40 years ago the aristocrats noticed too many newly rich workers were showing up at the exclusive places. They decided this had to stop so they had Ronnie Raygun elected and we were started on this road to ruin. Since then working people including professionals have had their living standards lowered (especially if they got trapped in a worthless McMansion deal) and cannot afford the nice places. This suits the people that are actually running the economy and government. They got wealthier and regained their aristocratic exclusivity.
We could reduce all speculation by applying a 70% tax on any gains from securities or commodities held for less than a year.
Are you serious?
Aristocrats were p*ssed off that working people were eating at the same restaurants so they engineered the 1980 election of Reagan?
I agree completely. Well articulated argument. The problem has been with board of directors. They provide no oversite of the executives in the companies and that is because stockholders have very little interest in the board, because stocks are so transitory now.
It used to be that a person owned stock because they wanted a dividend from that stock so management and management salaries were important on the bottom line. Now people make money from stock from speculation. It has changed the whole way that managment is worked.
But a simple fix of the problem is to raise the taxes on the very wealthy. This will bring incomes and income disparity a little closer.
Thank you, and I agree in some ways. Raise the taxes somewhat (but not defitely not too much) to disuade some of the largest salaries. I guess we will still be left with the quandry of how to get firms to hire once again.
Because Europe and Asia are no longer smoking post-war ruins paying whatever we charge for our exports.
Think near zero percent interest rates are helping to keep the price of real estate high and the buying power of US dollars low?
Take it up with your Keynesian Overlord.
This still does not deal with the massive revenue gains by US corporations. Corporations make more moeny, but then do not hire, or in some instances reduce pay. Smells a bit like greed to me.
The world can't support a sizeable population of wealthy, resource hungry people for very long. The US middle class will only get poorer because of the laws of physics; infinite growth is not possible in a finite world.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
