<p>^ well, now that you bring it up. ; ) and since there have been a few book recommendations already on this thread… I really like Octavia Butler’s Parable of the Sower which which seems to me both prescient and hopeful, and also Margaret Atwood’s Maddadam trilogy. I’ve been reading her since my 20s. Lately her books seem to me less earnest and like she’s just deciding to try and find some humor in the situation in which we find ourselves. That appeals to me a lot.</p>
<p>While the decline of earning power of the middle class coincides w the rise of the super-rich, i don’t quite see how the super-rich are the cause of the decline. Just because Usain Bolt won the race, it doesn’t mean he sabotaged the other runners.</p>
<p>
</p>
<p>Ha, didn’t industrial revolution make it possible for the mass to thrive? In fact, it needed the mass to consume. They say we are in information revolution. I don’t know what that means economically other than that we need to be better educated. We are not well positioned in that regard. </p>
<p>Interesting NYT article, UCB. Thanks.</p>
<h1>941</h1>
<p>Suppose I make X amount a year and that is enough for me to be comfortable. Suppose someone works for me for a salary of 1/10 of X. My investments do well. I inherit some money/real estate. Now I am making 2X. Cost of living increases for me and for my employee. Should the employee get a raise? If so, what amount? Is this my problem? I am paying market rate and there are no other jobs for the employee. Suppose the employee doesn’t get a raise and has to go on food stamps. Whose problem is that? Who bears the cost? If the employee ends up in a situation where the salary isn’t enough to feed her family, even with the food stamps, and steals from my pantry - who’s at fault? When I prosecute the employee for theft and she goes to prison - who bears the cost? At any point, is it in my self interest to give a raise?</p>
<p>GMT: I am extremely interested in dstark’s answer to your question when he wakes up. Also Hayden and poetgrl. I am not clear about the concept of finite/infinite amounts of money/resources, and would like to better understand.</p>
<p>
</p>
<p>Not the cause of decline necessarily but wealth concentration dampens economic activities. It’s better for the economy if more people have disposable income to spend. As a society, we engineer redistribution of wealth all the time.</p>
<p><a href=“http://blogs.wsj.com/economics/2014/08/05/inequality-is-damaging-the-u-s-economy-sp-study-says/”>http://blogs.wsj.com/economics/2014/08/05/inequality-is-damaging-the-u-s-economy-sp-study-says/</a></p>
<p>@alh, u presuppose a fixed pie. Innovations like Spanx, Tesla or Facebook show that whole new pies can be created.</p>
<p>Have any of these innovations come from people not from enriched upper middle class backgrounds? Does access to the right sorts of networking matter? Could facebook have started anyplace other than H(or YP) and become what it is today? </p>
<p>I have no idea. Could someone please give examples of billionaire innovators who didn’t start out on third base? That would certainly be comforting to me.</p>
<p>@alh, I added Spanx to the list of innovative industries, after u responded to my post. The point i am making is, not that Sara Blakely is a billionaire, but that she created a new industry sector that didn’t exist before, which added new jobs to the economy. She created a new pie. </p>
<p>Oh yeah, and Blakely graduated from Florida State, went to public HS, worked an entry level job at an office supply company, and started her own company w $5000.</p>
<p>Side random thought: How much is really a “new industry” vs excellent marketing? Maybe I watch Shark Tank too much, but it seems that many ideas, including the modern version of the girdle or bodysuit, are about marketing, financial backing, product placement and being in the right place at the right time.</p>
<p>I understand your point, I think. It looks to me like she comes an enriched background: tri delt 
What did/do her parents do? Did she have a safety net? This is not meant to diminish her accomplishment. It is impressive.</p>
<p>
</p>
<p>Here’s one.</p>
<p><a href=“Epic Systems' Tough Billionaire”>http://www.forbes.com/sites/zinamoukheiber/2012/04/18/epic-systems-tough-billionaire/</a></p>
<p>yes, and the guy who created underarmor is impressive as well. No doubt.</p>
<p>However, we need a lot more Henry Fords. </p>
<p>the reason for the wage stagnation are complicated and simple all at the same time. But the fix would require a paradigm shift we may not be able to make, or at least not until we are much further down this path. Until we begin to see employees as stakeholders and not as “Human Capital” (Ick), we will continue to believe it is the primary responsibility of a CEO to provide profits to its shareholders. This is an idea we may have bought into, but it’s not an idea that makes the world a better place, or creates bigger or better businesses. It’s just a world view that makes a certain kind of spreadsheet.</p>
<p>But, we need to change our mind. We aren’t there yet.</p>
<p><a href=“The Middle Class Took Off 100 Years Ago ... Thanks To Henry Ford? : NPR”>The Middle Class Took Off 100 Years Ago ... Thanks To Henry Ford? : NPR;
<p>a giver ;)</p>
<p>Wasn’t there someone who used to be homeless who became a billinaire recently? A tech IPO. Individual examples don’t provide a big picture. You can’t cherry pick an industry to see if the pie remains finite or not. There are wonderful new businesses and there are businesses disappearing. Since most manufacturing is done overseas, what new businesses bring in is jobs in the ideas/innovation. That’s more of an upper class jobs hiring fewer people. If you look at businesses disappearing, it’s more of traditional middle class jobs. One could say that upper class jobs are replacing middle class jobs. I think it will be wonderful if we can all take advantage of the change and trade our middle class jobs in for an upper class jobs. We’ll all be moving up. I don’t think that’s happening tho. It may be futile to try. Much like the industrial revolution brought in mass production and huge middle class, this information revolution may bring in an advantage to educated upper class.</p>
<p>I think what Henry Ford understood, and this is what I wish we all could come to understand, is that it is enlightened self-interest to pay our workers well. He had a genius for foresight. He truly understood that what was good for the wider economy, the bigger population, was good for him, and good for Ford.</p>
<p>The US is a consumer driven economy largely due to the ideas put forth and put into play by men like Ford and those who followed his lead. Now, the consumer economy is largely debt driven, and soon enough, the debt engine will not work. We see this in the way the last recession continues to linger on what we now call “main street.” Ford was a “main street” CEO. Most CEO’s today are Wall Street/Kstreet CEO’s. </p>
<p>It won’t create or sustain a middle class, not as we know it. Or knew it.</p>
<p>In the meantime, people continue to say, “well, 50K is middle class.” As if this illustrates a truth.</p>
<p>Until we understand that middle income is NOT middle class, we will continue to be fooled and won’t look at the things we really need to change about the way we see business. NGOs? They will make us a third world country, if we don’t wake up and pay attention.</p>
<p>
So is 50k middle income poor?</p>
<p>And what do u mean by "NGO"s? Doctors w/o Frontiers , the United Way, the Red Cross, Transparency International are Non Governmental Organizations. </p>
<p>never mind… headed for coffee… and then continuing my zombie invasion preparations. </p>
<p>Vlad posted the pie. Instead of chocolate cream pie, we have the income pie.
<a href=“http://www.cbpp.org/images/cms/11-28-11pov-f1.png”>http://www.cbpp.org/images/cms/11-28-11pov-f1.png</a></p>
<p>This income pie includes includes facebook. The pie includes Under Armour. Spanx. Google. Apple.</p>
<p>The change in income represents the population’s share of the pie.</p>
<p>For a very long time the pie got bigger and bigger and everybody got a larger slice of the pie including the poor. This slowly started changing in the 70’s. Somewhere around 1997, the pie stopped expanding for 95 percent of the population. The slices stopped getting larger for 95 percent of the people. 95 percent. The slices of the pie are actually a little smaller for around 50 percent of the people.</p>
<p>How can this be? We all know the pie is actually larger than it was 17 years ago. The graph only shows 95 percent of the pie. The other slice of the pie, 5 percent of the pie, is on another plate. That slice is larger now than it was in 1997. </p>
<p>If we had a picture of 5 percent of the pie, we could see the increase in size compared to 1997. We could see, if that part of the pie was cut up, that the top 1 percent does have a larger slice now. </p>
<p>I posted a link to the documentary “Century of the Self” which explains pretty well how we got to where we are. You can read a transcript online also. </p>
<p>Milton Friedman also has a lot to do with this. Corporations used to have an allegiance to the shareholders, employees and its customers.</p>
<p>Miltin Friedman said the corporations allegiance was to its sharehoders. That changed how the country allocated the share of the pie.</p>
<p>^ and helpful.</p>