In continuing with the theme of my previous post, I'd like to present yet another "How can a sane and/or rational person look at these numbers and not think that something is a little wrong here?"
And today's topic is "Wealth Inequality".
Wealth inequality is the term used to describe why the majority of people are living paycheck to paycheck while one percent of Americans own over a third of the country's wealth.
Articles like this give more numbers and try to illustrate the point. Unfortunately the people most affected by this social problem tend not to be good with numbers; partly because the human brain sucks at dealing with numbers and there's a point where all big numbers are just subconsciously translated as "wow that's big" instead of comprehending the comparisons, and partly, perhaps, because this is a topic that once politicians get into the mix becomes something that you either actually think about or reject outright because it's against your personal ideology.
Numbers and graphs sometimes just don't cut it for conveying a message of these proportions. Let's try a video instead. Every time I've seen this I can't help but wonder, "How can you not think something is a little wonky here?"
There's an important point to make here; there's a difference between wealth inequality and income inequality. Wealth inequality is what leads to the reaction, "We pay sports stars millions of dollars to throw a ball while teachers educating our future leaders make so little!" or some similar comparison.
Income is more of a flow of money...your paycheck. Wealth is the accumulated value of things you own. This would be why many people who are retired have very little income, but are not considered necessarily poor, because they have accumulated assets in their lifetimes. Also, money gained from trusts, dividends, and investments aren't considered income.
It's easier to remember the difference between wealth and income when you remember that Steve Jobs, cofounder and CEO of Apple at the time of his passing, had a salary of one dollar in his position at Apple.
I see these numbers and look at these graphs and it absolutely gobsmacks me that people defend the idea that this is not only fair, but reasonable.
One YouTube comment read, "Nobody has time for your whiny, ignorant, socialist crap. If you want
socialism, go to Russia. Those top people work very hard. And Obamaites
like you don't realize that it is fair based on how much you work. Go
complain somewhere else."
I normally attribute YouTube comments about as much credibility as 4chan comments, but this is actually something I've seen echoed by people in FaceBook, with actual people not necessarily hiding behind trollish anonymity. And these were not wealthy people saying this; from what I can tell the sentiment was being expressed by economically lower to middle class people, the very people falling under a category I labeled "being screwed."
Maybe I lack the ability to properly convey how I see the situation.
No one is working 380 times harder than the average person.
You can, perhaps, say that someone is working 380 times harder than someone else. There are people in comas and on the other end of the spectrum there are athletes training 12 hours in the gym in preparation for the next Olympics. I can see that fitting the scenario.
But that's not the average person.
See, the average would be, ideally, the middle class. You have a job. You put in your 40 hour workweek. You do your part, and you should, in theory (according to the version of the American Dream I was told) be able to provide comfortably for your family, be able to afford healthcare, and maybe take a vacation once or twice a year.
But as you can see in that video, that's not the reality.
And when you take that average, you shouldn't have it common...that is, routine, and expected...for a person to make 380 times your economic value if they have a particular title in a business. I can see it happening, but it should be the exception, not the rule. And I'm not saying that CEO's should have more wealth or money; they are the people that are leading the business, and they shoulder the responsibility of keeping that company running and keeping employees employed.
But 380 times more than the average employee? Isn't that...excessive?
It would seem that some economists agree. Something along the way has become seriously warped.
I see a progression of blame in society. A series of excuses, really.
"If you're poor, you deserve to be poor."
"It's America. If you work hard, you will make it."
"Nothing is stopping you from going out and making that money."
The reality is that it's not a level playing field. Most of the money going to the top of the wealth pie doesn't come from their paychecks, although that's a big help (remember, Steve Jobs, dollar salary, worth millions...) Thanks to Congress and Congressional lobbies over time, tax and economic policies favor people who get a chunk of cash to start off well in the game of accumulating wealth. Wealth creates more wealth. Investments create more wealth. It's a feedback loop. And it's the reason you see wealthy people being compensated with large, healthy salaries on top of stop options and bonuses and other forms of compensation.
Ever play the board game Risk? I used to like playing it. It's a game of war. As you conquer more countries, you get more armies each round so you can place them and roll dice to take over another country and expand, leading to more armies on your next turn if you're successful, and you get a bonus number of armies if you control a particular region. Also you get these cards each time you take over a country and after collecting a certain number of cards you turn them in for a bonus army set, which gets higher each time a set is turned in.
Follow that?
The game is fun the first several rounds. Especially if you can get Australia. You'd understand if you played.
But inevitably the game loses its appeal at the end, because usually about a third to halfway through you know who's going to win. Someone by that point is getting an obnoxious number of army units each turn, and everyone else is going to be faced with fighting a juggernaut with so many armies that only a gambling addict would think the dice would overcome the odds. "I'm going to place my 55 armies here, 34 armies here, and 25 here...against your total of 15 armies in Brazil. Roll the dice!"
Our economic and tax policies have been crafted in such a way that if you have 6 or 7 figures in investments, that money will make more than enough money for you to live on. And it just snowballs. Meanwhile the poor and middle class have hardly enough to pay the taxes and insurance premiums to live on, let alone pass on in inheritance to their kids. The hard part is getting that initial investment amount so you can build up a snowball to roll down the mountain, metaphorically speaking.
I suppose it shouldn't be surprising; once you have people making a lot of money through means outside of income or salary, they have more power and influence to tell Congress how to create laws that are beneficial to their ways of making more money. And they have enough money to hire people who specialize in making money to spend their time taking advantage of loopholes in laws so they can make yet more money. The fox is guarding the henhouse; Congress isn't generally comprised of blue collar workers, but rather wealthy businessmen and lawyers. Your representatives are probably not able to relate to you economically. There's a disproportionate skewing in the background that comprises our Congress compared to the rest of the nation. Yet they are supposed represent your interests in matters of law? I suppose it should be no surprise to find laws passed that benefit more economically privileged positions in society once you see who is running our government.
When you hear people say that the poor don't work hard enough, that's really just a way of placing blame through word play. I understand there are CEO's that put in long hours at the office. Most have had times of extreme stress at various times of their lives. And CEO's of large businesses can look back and think about the difficulties they've had in their lives while sipping alcoholic beverages on a beach in Bermuda.
I think back to people like my dad who woke at 4:30 in the morning to drive to work by 5:30 and get home that evening after putting in a long day in his job at one of the three industrial plants funding my home town's economy. I think back to a man named Dave who worked long days at the garage he owned beside his 2 employees, grease and oil covered from mucking about in the undercarriage of cars and SUV's. I think about the numerous farmers living near my home who woke before the sun rose and continued spreading that "Dairy Air" scent until the sun went down, and rarely were able to take vacations (unless they were a corporate farm or had enough farmer family neighbors that would check in and keep their farm going for a day or two). My mother made a comfortable living as a teacher...not wealthy, by any definition, but not living on spam and bologna, thanks to efforts of the teacher's union ("When I first started teaching I made $7,000 a year. Your dad made more at the time. He worked at a garage mounting tires.") She would get to school by 7:30 and, much to my impatient chagrin as a child, stay in her classroom grading papers and preparing for the next day until roughly 5:00 every weekday.
These people worked hard.
So why aren't they wealthy?
And how do laws favoring wealth building wealth creating a fair playing field, a fair opportunity for the poor to become wealthy?
I see a question of, "How can you blame people for not being wealthy, if the opportunity is the exception, not the rule?"
How can it been reasonable that any person is worth 380 times the average worker? I have no problem with someone being wealthy. I'm not criticizing that. I'm simply pointing out the excessive nature of that number. That's a really big number when it's compared to an average...and wealth by its nature hoards wealth; the wealthy aren't using their wealth to create jobs.
And why is it considered fair to have laws favoring money making money, meaning that it's easy for the rich to get richer, while the poor and middle class struggle to have modest incomes? Shouldn't it be easy, if you have a job and work your fair share, to afford not to worry about your bills being paid and have a vacation once or twice a year, and once you reach a certain point of wealth it should be harder to continue having your finances snowball like the leading player in a game of Risk builds their armies?
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