<p>You have a good work ethic, barrons, and are to be commended (and especially for knowing your own physical and mental limits and taking a break). But there are many people working 60 hours a week for a lot less. Some who are earning less than $50,000 for that many hours. And they don’t get the opportunity of taking a year off. Please, please look around at the average working man or woman. Your guys in the office have choices. If they don’t want to put in the four deals a week, they can do less or they can find other lucrative jobs and work a 40 hour week. The working class people who are putting in 60 hour weeks for $8 or $10 an hour don’t have those choices, they’re just trying to make ends meet. They deserve help getting adequate health care, getting their kids better education, etc… </p>
<p>To much who has been given, much is expected.</p>
<p>StitchinTime, the proof is less simple and blatant than the proof of income disparity growth and the loss of tax revenue, but the question of mobility between economic strata has been studied, and that, too has been decreasing along with the increasing stratification of wealth in the nation. To state it bluntly:</p>
<ol>
<li><p>The increase in the nation’s wealth has all been shunted to the most wealthy, and the more wealthy a person is the more their increase in wealth; and,</p></li>
<li><p>The odds of a middle class person becoming wealthy, or a wealthy person becoming middle class, have been becoming less and less each year.</p></li>
</ol>
<p>That’s what’s actually happening in America. On a personal level, you’d have to be nuts not to want belong to the “haves” if you can. If you’re there now - good for you. If you’re on the border, push your kids to try to scramble the last few steps. But it is harder now to climb the ladder than ever before - and harder to fall off of it, too.</p>
<p>On a non-personal level, I think it’s a bad set of policies which shunts all of the nation’s increase in wealth to the top. I’d like to see the income distribution be the same, proportionately, as it was thirty or forty years ago - as if the increase in the nation’s wealth had been distributed in the same proportion as existing wealth was. That didn’t happen.</p>
<p>Mini I posted a detailed study link last week that debunked your AA’s pay my mom’s lie. Go look it up or I will. </p>
<p>Momof2–during my time off I worked for $7.50/hr at Starbucks for “fun”. It did remind me how much better my other job was overall. My feet and back were killing me but I never lost any sleep over it either. I won’t bore you with the details buy my parents did not make much $$ and did not pay any of my college or grad school costs. I worked and saved summers in various factories and during school did everything from wash cars to waiting tables. My view remains that if I could do it anyone can if they should be in college at all. My brother and sister did likewise.</p>
<p>But barrons, are you sure you had a level playing field with those who are now making $8-10 an hour (as adults) and who really aren’t prepared to go to college and thus have the choice to earn more than $50K? What I mean is, perhaps even though your parents didn’t make much money, perhaps they had values that you were immersed in from the time you were born that gave you opportunities. Values about education. Was it just assumed you would go to college by your family? Or perhaps you have a genetic advantage in terms of higher IQ or better physical health. Or maybe even though your family wasn’t wealthy, they were very stable or you had a mom who could afford to stay home, or you were able to be raised in a safe neighborhood and attend decent public schools. I mean there are a lot of variables here. If it was so possible through hard work alone to become a millionaire, wouldn’t a lot more people be making a much higher income?</p>
<p>I used to think like you did, that if people wanted to work hard they could get the same opportunities as me. They could be rich (I’m not, but by choice not because of limitations). And if they didn’t get those opportunities then they weren’t trying hard enough. Then I became a teacher and I saw kids trying really hard to learn concepts and me teaching all of the kids in the room the same and holding them all accountable and setting the bar high, and some just couldn’t do it. No matter how hard they worked and how much they wanted it, they couldn’t do what was expected. They need help (more time, more practice, more repetition, a different way of learning, etc…). And still some can’t do it, even with all the interventions. I can accept that they can’t do it, but I can’t accept that we, as a wealthy nation, will not give them, later in their working adult life, some basic necessities that their wealthy peers will easily be able to afford (health care, good schools, a minimum wage that keeps up with inflation, preschool, sick days, etc…). If you work hard in America, you should get those things. And even the children of the people who choose not to work hard should get them because we should give their kids the opportunity to break the cycle.</p>
<p>Stitchintime,
I would never suggest there should be no wealth gap. That would take away all private enterprise and economic incentive and would be a horrible idea. The rich will always be with us and that’s great. I love rich people. I just want to provide poor people with some basic “quality-of-life” benefits (affordable quality health care, good schools, a minimum wage that keeps up with inflation, preschool, sick days… to name a few.) because we are a wealthy nation and should treat our poor people with kindness and give their children a decent shot at a better life. I love poor people, too.</p>
<p>“Wealth is good when many people have it. It’s good when few people have it.”</p>
<p>It’s better when more people have it.</p>
<p>Nobody is trying to equalize incomes and wealth. </p>
<p>“But in our residual collectivism and our infatuation with equality we keep trying to get rid of rich people…”</p>
<p>Nobody is trying to get rid of rich people. Are people really not going to be rich anymore if the top income tax rate goes to 39.6% from 35%?</p>
<p>If capital gains are taxed a little higher than we tax now?
If social security exists?
If universal health care exists?
If we take care of those in need? </p>
<p>This argument that if we tax the rich a little more we won’t have rich people is nonsense.</p>
<p>The federal government is around 20% of the economy. It looks like Bush is going to raise this percentage slightly.
Bush’s budget has taxes that bring in 17.7% of the economy.
We are short.
The rich have the money. The poor don’t. It’s hard to tax the people that don’t have the money. We can tax the rich a little more, they can still be rich, and take care of those that need it, or we can take the increase in taxes and we can pay more of our bills now (cut the deficit), so our kids don’t have to pay our bills. </p>
<p>StitchinTime: Seriously, do you think it does any good to post a long piece of propaganda which sets up a straw man: “No one should be too rich. No one should be too poor” - and then argues against it? </p>
<p>Pay attention: No one here is arguing that there shouldn’t be rich and poor. What I’m saying is that the balance between the rich and poor has been shifting. The “rising tide” isn’t “lifting all boats” - it’s only lifting the big boats. As I stated, I’d be perfectly OK with the exact same gap between rich and poor as we had thirty or forty years ago. The problem is that the gap is getting wider every year. Not just wider in absolute terms, as it would if everyone was getting better off, but wider in relative terms, as the wealthy get better off and the poor and middle class get stuck in the same place.</p>
<p>That’s not what P.J. O’Rourke was arguing against. (Of course, no one is arguing for what O’Rourke is arguing against - it’s so much easier to skewer a position no one actually believes in, don’t you think?) </p>
<p>And to answer your question:
Pay attention to the data. The answer is: “Yes.” How do we know? Because fewer and fewer people are doing it each year. (See post 63.) As B.F. Skinner said: “The rat is always right.” If the data says something is happening, it’s happening. Your theory of the world should be based on that, not on some concept of what “should” happen. </p>
<p>It’s true, on an individual basis, some individuals fall out of the upper economic strata every year, and others climb into them. But fewer and fewer people do each year. Economic mobility has declined as the economic stratification has increased. How far can that trend go? Personally, I don’t want to find out.</p>
<p>And don’t confuse the normal process of an individual’s income increasing with age with the economic prospects of people improving as a whole. Most people earn more when they’re 50 than when their 25, regardless of where they start out. But last year, for the first time in any of our lifetimes, an average 30 year old man earned less than an average 30 year old man did 30 years ago. That’s the reality of what we’ve done to the realistic prospects of “ordinary” people.</p>
<p>[Kluge[/url</a>], the individual posting the comment, is a ‘someone’ negating your claim that “Nobody is trying to equalize incomes and wealth.”. </p>
<p>The suggestion (if implemented in public policy) to </p>
<p>
</p>
<p>would most definitely be a huge (not slight) move towards public policy-mandated eqaulization which is what [O’Rourke[/url</a>] argues against. </p>
<p>How big a shift would this be? If one accepts that…</p>
<p>I just don’t know how you execute forcing a different income distribution–at least before tax. Increasing the min wage really has little impact in most areas. Higher paid people are getting that because they bring in the revenue one way or another. That’s why Julia Roberts got $20 Million a picture when she was hot. Now she might get half that if she’s lucky. In many of these high paying fields you are only as good as last month’s success or lack of it. CEO’s makes good copy but that is really a very few people. Chopping their pay might fee l good but won’t accomplish much. In some cases it could really hurt the company and all its employees. Apple without Jobs?? Microsoft with Ballmer (joke).</p>
<p>I tend to agree with you, StitchinTime, but what incentives would you support? And aren’t there enough incentives as it stands now? People really do want to earn more money, what new incentives could get them more fired up and somehow working harder?</p>
<p>StitchInTime, I don’t know if you’re not paying attention, or just don’t understand what you and others are posting. What your words say is that you understand that income inequality has in fact increased over time - that is, we have seen a massive redistribution of wealth upward. But any effort to return to the income distribution which prevailed for many decades prior to 1980 is somehow an evil “income redistribution.” You don’t seem to recognize that you are ratifying the income redistribution which sent wealth upwards over the past thirty years, while decrying proposals to restore the previous status quo. America has income redistribution. It happened on our watch. “Redistribution” is “redistribution” whether the wealth is shunted up or down. </p>
<p>
Stitch, unless you’re operating under the misconception that everyone in America had the same amount of wealth thirty years ago your comment makes no sense. I’m talking about maintaining the difference between rich and poor - but maintaining it in the proportions it was in before the recent redistribution of wealth upward. In all, your comments suggest that you perceive a divine right of the wealthy to constantly increase their share of the nation’s wealth, with anything tending to maintain the existing gaps between different economic strata as being “tinkering.” </p>
<p>For a simpler approach, consider the following: in 2005, the income line of demarcation between the bottom quintile (0-20%) and the second quintile was $19,488. the 40th percentile was $33,120; the 60th: $51,258. The income floor for the top quintile was $83,138. The difference between being in the bottom quintile and the second quintile was the difference between being paid $9.25 and hour and being paid $9.50 an hour. $16 an hour put you in the “middle quintile.” Obviously, a disproportionate number of the people in the bottom quintile were young; ten years later they would be at least 35 years old. It’s not surprising that 55% of the people in the bottom quintile had moved up ten years later: they were ten years older. That means nothing in terms of socio-economic mobility. What is depressing is that 45% of those who made less than $9.50 an hour year one still earned that little ten years later. </p>
<p>For a simple anecdotal demonstration of how the Treasury study finds “mobility” let’s take a case study: the life of Kluge. At 25 I was in the bottom quintile. A year out of law school, set up my own practice; still living on “student” level economy. Ten years later, I’d moved up to at least the fourth quintile; possible the top one (I don’t have the numbers for those years.). Ten years later I won a big case, and was - that year - in the top 1%. Ten years later, I had dropped back from those heights, but remained safely in the top quintile, which I don’t expect to leave before retiring. So - does my story prove “economic mobility?” No. As the educated son of two educated parents, economic mobility would have been my ending up anywhere other than the top quintile. But the Treasury Dept. study would include me - at various times - as one who had shown significant mobility. Multiply my story by the million variations on that theme, add in the natural tendency of people’s incomes to increase between their youth and their mature years, and the net result is that the Treasury Department study is a tutu on a pig. No, it still doesn’t dance.</p>
<p>No - those are individual income figures, including, as separate data points, “secondary” filers who file on a joint return. Taxpayers were followed individually regardless of divorce, marriage, etc., according to the study documentation. Only taxpayers were included in the study.</p>
<p>Rather than redistribution it has been a revalaution. The value of individuals to the firm can be measured and their value computed both by direct production (hours billed for lawyers). As the value of the best legal advice has increased the billing rate for the top firms has jumped as has the money paid to the top lawyers. You can buy an average lawyer for about the same price as 10 years ago. There are lots of them. The value of the best is what has increased as the cost of being wrong legally has probably skyrocketed. Same for any profession and really any job. Average profs make about the same as they did 10 years ago. The stars are making 4 times that and more. One can be repalced easily–the other not so. At stake might be $20,000,000 in annual grants vs squat. We have gotten away from rewarding average performers and now ths rainmakers get the $$$$. Every business has 9 drones to one rainmaker. So does every school, every sales floor, etc. Even every college football program. You want to win 5 games-hire the $250k guy. You want to win 10–it will cost you $2,000,000.</p>