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[Opiate]

This thread will be about American Wealth, Income, and Wage Inequality, its causes, and possible solutions.

Here are a few possible explanations that have been offered:

1) Income inequality is not rising. It is an artifact of the research, specifically a consequence of rising immigration from poor hispanic countries. That is, the income inequality is not a result of a traditional american family becoming poorer, but very poor immigrant families skewing the data.

2) Education. Because of the advancement of technology, education is more important than ever, and those without college degrees are falling increasingly farther behind.

3) Lack of government regulation. The strong enforcement of equality put in place by FDR and the presidents immediately following him literally forced equality. As those regulations have been weakened or repealed, inequality has grown once again.

You can of course provide your own causes, as that's part of this discussion. How do we fix this problem, if at all?

 

[neutralgamer02]

Not going to happen. There is no political will. This discussion is therefore pie in the sky wishing.

 

[Drkirby]

#1 sounds like total BS to me, but I don't really have any hard evidence on hard to show it being right or wrong.

I think part of the problem is that since the Baby Boomer Generation, it has been peoples goal to simply get a job at a large company, and have a stable career for the rest of their lives, retire at 65, and live what was told to them to be the American Dream. I just wonder if I am right in thinking this is really something that is post WWII or not. Does anyone know if during the 1910's, before WWI, that people felt the same way? I just have this conception that the dream of that time was to move away from the family farm, get a factory or an office job, and after a few years start their own business in the big city.

 

[Meadows]

For me as an observer, everything comes down to the USA's two-party system. The Dems/Republicans can continue to not do enough about inequality because they know the only alternative is the other party, who will do the same. Don't like the Democrats' record on inequality? Then either vote for the Republicans, who are even worse, or vote for a tiny party that will probably receive 0.5% of votes.

 

[Telosfortelos]

Point 1 is refuted by breaking down the numbers into income brackets:

It's not just the bottom 20% that's stagnated, but each income bracket below the top 20%. And the top 1% has inflated at a much higher rate than the top 20%.

 

[quaere]

Let me broaden #2 a bit.

2) Ability. Because of the advancement of globalization, marketable skills are more important than ever, and those without them are falling increasingly farther behind.

Not necessarily endorsing this view.

 

[gcubed]

in a poor economy and to some extent in a services driven economy its much easier to make money if you have money. With the quick rise of the stock market (and then the crash and rise again), you can make a ton of money if you have money. The only money the majority of people in the US have in the stock market is their 401k.

 

[MultiCore]

What is the rationale behind the notion that everyone should have an identical income?
(Or one based on their 'needs'? (Kids, ect.))

Genuinely curious.

 

[alphaNoid]

2) Education. Because of the advancement of technology, education is more important than ever, and those without college degrees are falling increasingly farther behind.

False.

I dropped out of college years ago because I saw it was not necessary to get ahead. At best, a degree nets you a foot in the door and even then most all college grads start at the bottom like everyone else. Let me put some things into perspective.

I am a college drop out
I have zero debt
I am a senior systems engineer managing large scale infrastructure across 2 countries, multiple data centers, specializing in Citrix and VMWare.
Our mailroom guy has a degree

I got to where I am today by working hard and investing my college years by climbing the corporate ladder within a multi billion dollar company. Its more than possible for someone to do exactly the same thing I did, today. I work on a team full of guys who all have degress .. most of which are STILL paying off student loans 10 years out of college.

I cannot repeat this enough, I am debt free and chose to drop out of college because I saw it quite literally as a waste of my youth and time. 20 years ago a college degree meant something, now a days its pretty much a standard type piece of paper, employers really aren't that impressed and the worst part is the average 18 year old college freshmen thinks they'll net some $60K+ job as soon as they graduate. On the contrary, most will be lucky to get a $30-35K entry level job and then do exactly what I (and others) did and try to climb the ladder.

But dont get it wrong, having a degree is certainly a good thing. If 2 people are interviewing for a position and are equally qualified but 1 has a degree, they certainly have an edge. But people need to realize that all a degree is, is a piece of paper and tells people you are responsible enough to dedicate a few years of your life to a single goal.

Best of luck to those of you in college/uni. Best of luck to those of you who are not.

 

[dave is ok]

More people have college degrees now than ever before. #2 doesn't cut it.

 

[jorma]

3) Lack of government regulation. The strong enforcement of equality put in place by FDR and the presidents immediately following him literally forced equality. As those regulations have been weakened or repealed, inequality has grown once again.

Wealth gravitating towards the top is unavoidable with no regulation in place to spread the wealth. It will always happen, wherever you are, whatever economical system you use.

 

[JGS]

Completely unresearched answer: Would job growth directly impact this?

We know that income disparity isn't fixed only by stabilizing unemployment since some fall off the ranks and others take jobs way below their previous pay grades.

The ones who stayed wealthy got wealthier which makes sense considering that the largest corporations were practically on clearance sales stock wise when the crisis hit and have now recuperated (just without a hiring boom). The increases in gains far exceeds anything middle and low classes would earn (My 401k is up 30+% this year, so if the rich are getting similar returns, they're making bank).

The unemployed remain that way and thus are technically/literally poorer.

 

[Measley]

America is stuck in a 20th century mindset while the rest of the world is rapidly moving into a 21st century mindset. Its shocking how many Americans view education as something that is not needed, and actually believe that post WWII manufacturing jobs that required nothing more than a high school education are still viable in a modern economy. So many Americans are worried about the Mexican immigrant picking strawberries, when they should be worried about the East Indian and Chinese immigrants designing future aircraft and electrical systems. The Mexican immigrant is going to stay here. The Indian and Chinese immigrant are going to go back to their home countries and take their skill and know-how with them to enrich India and China.

 

[Lathentar]

What is the rationale behind the notion that everyone should have an identical income?
(Or one based on their 'needs'? (Kids, ect.))

Genuinely curious.

There is no notion to have identical income. The notion is that everyone should be given an opportunity to succeed.

 

[Zaptruder]

False.

I dropped out of college years ago because I saw it was not necessary to get ahead. At best, a degree nets you a foot in the door and even then most all college grads start at the bottom like everyone else. Let me put some things into perspective.

I am a college drop out
I have zero debt
I am a senior systems engineer managing large scale infrastructure across 2 countries, multiple data centers, specializing in Citrix and VMWare.
Our mailroom guy has a degree

I got to where I am today by working hard and investing my college years by climbing the corporate ladder within a multi billion dollar company. Its more than possible for someone to do exactly the same thing I did, today. I work on a team full of guys who all have degress .. most of which are STILL paying off student loans 10 years out of college.

I cannot repeat this enough, I am debt free and chose to drop out of college because I saw it quite literally as a waste of my youth and time. 20 years ago a college degree meant something, now a days its pretty much a standard type piece of paper, employers really aren't that impressed and the worst part is the average 18 year old college freshmen thinks they'll net some $60K+ job as soon as they graduate. On the contrary, most will be lucky to get a $30-35K entry level job and then do exactly what I (and others) did and try to climb the ladder.

But dont get it wrong, having a degree is certainly a good thing. If 2 people are interviewing for a position and are equally qualified but 1 has a degree, they certainly have an edge. But people need to realize that all a degree is, is a piece of paper and tells people you are responsible enough to dedicate a few years of your life to a single goal.

Best of luck to those of you in college/uni. Best of luck to those of you who are not.

While your anecdote is appreciated, it doesn't qualify as any sort of evidence against the popular notion that degrees are increasingly important for getting a (well paying) job. In this case, the popular notion, to a large degree helps to drive the reality. If you want a job with a career path that will get you to a 5% job... then more and more likely, you'll need to have a relevant degree.

 

[Opiate]

False.

I dropped out of college years ago because I saw it was not necessary to get ahead. At best, a degree nets you a foot in the door and even then most all college grads start at the bottom like everyone else. Let me put some things into perspective.

I am a college drop out
I have zero debt
I am a senior systems engineer managing large scale infrastructure across 2 countries, multiple data centers, specializing in Citrix and VMWare.
Our mailroom guy has a degree

I got to where I am today by working hard and investing my college years by climbing the corporate ladder within a multi billion dollar company. Its more than possible for someone to do exactly the same thing I did, today. I work on a team full of guys who all have degress .. most of which are STILL paying off student loans 10 years out of college.

I cannot repeat this enough, I am debt free and chose to drop out of college because I saw it quite literally as a waste of my youth and time. 20 years ago a college degree meant something, now a days its pretty much a standard type piece of paper, employers really aren't that impressed and the worst part is the average 18 year old college freshmen thinks they'll net some $60K+ job as soon as they graduate. On the contrary, most will be lucky to get a $30-35K entry level job and then do exactly what I (and others) did and try to climb the ladder.

But dont get it wrong, having a degree is certainly a good thing. If 2 people are interviewing for a position and are equally qualified but 1 has a degree, they certainly have an edge. But people need to realize that all a degree is, is a piece of paper and tells people you are responsible enough to dedicate a few years of your life to a single goal.

Best of luck to those of you in college/uni. Best of luck to those of you who are not.

This is well articulated, but I'd like, if possible, to stick to larger scale discussion and avoid anecdote in this thread.

For example, large scale evidence does indeed suggest that those with college educations earn more than those without by a significant margin:

http://en.wikipedia.org/wiki/File:Figure01-earnings_by_degree.gif

Although it's certainly possible on an individual level to buck this trend (you may have, for example), it doesn't change the larger scale data, which is what I'd prefer to discuss here as we're discussing society as a whole.

 

[quaere]

False.

I dropped out of college years ago because I saw it was not necessary to get ahead. At best, a degree nets you a foot in the door and even then most all college grads start at the bottom like everyone else. Let me put some things into perspective.

You do realize that IT is the ONLY traditionally high end white collar profession where this works, right?

Good luck being a doctor, nurse, teacher, lawyer, engineer, business consultant, financial analyst, or accountant. The first five you can't do at all without a college degree. The last three there's no chance you could do at a multi-billion dollar corporation without a college degree.

 

[speculawyer]

I worry that the inequality itself is helping destroy the economy. We all know the relative value of money means that the lower income people spend more of their money. And they tend to spend it on more domestic products such as rent & food. And we all know the biggest problem with the economy right now is lack of demand. People are not buying stuff . . . because they don't have money.

So if we keep giving the rich more money and the poor less money, it will only get worse. In the long run, giving the rich more money is harmful for them! Their businesses are collapsing because consumers can't afford to buy the products/services.

I don't think it is mere coincidence that the largest gap between the rich & poor in our history was right before the great depression and now, the great recession.

 

[Opiate]

What is the rationale behind the notion that everyone should have an identical income?
(Or one based on their 'needs'? (Kids, ect.))

Genuinely curious.

There are rationales for that sort of distribution, that's not what we're discussing here. We're not discussing absolute equality or inequality (i.e. where one person has everything, and everyone else has nothing), but degrees of inequality.

Let's say I'm a manager and you're my employee. Most people would agree that I should make more money than you. But how much more? If I make 1 dollar more than you, most people would say that's not enough -- that we're too equal. But what if I make 100 times your salary? Most people would say that's too inequal.

Over the past 30 years, income inequality has been growing, and the change has been significant.

 

[Gotchaye]

Let me broaden #2 a bit.

2) Ability. Because of the advancement of globalization, marketable skills are more important than ever, and those without them are falling increasingly farther behind.

Not necessarily endorsing this view.

This is definitely part of what's going on, but I'd add that part of what makes certain kinds of workers highly valued is just that it's actually very hard to say how valuable they are.

It's very easy to perform a cost-benefit analysis on a manufacturing position to determine if you ought to hire the guy in the US or the guy in China, and you're pretty much always going to opt for the Chinese guy.

It's extremely difficult to perform a cost-benefit analysis to determine who ought to be a company's CEO. The difference between the best and worst possible CEOs is enormous, and CEOs in general are more important to your operation than an individual manufacturing worker, so you're willing to tolerate a large additional cost if it increases the quality of the CEO. But you can't measure a CEO's skill in any real way, and you can't easily use statistics because you're only hiring one - you've just got to look at what experience they have and how your gut feels about them. Since everyone else is doing the same thing, and since everyone is willing to pay a premium for a better CEO, CEO wages get bid up enormously. There are other issues, but this is a big one in driving the growth of the biggest (non capital gains) incomes.

 

[Zaptruder]

What is the rationale behind the notion that everyone should have an identical income?
(Or one based on their 'needs'? (Kids, ect.))

Genuinely curious.

Equal opportunity, not equal income.

We require a certain level of income (or rather resources and opportunities) to develop our full potential.

In the context of a person in a society - enough resources that basic needs can be met, with sufficient time to cultivate skills and knowledge.

The reasoning is simple - if we allow as many people to reach their potential as possible, by creating the necessary social/environmental conditions, then we optimize the human resources we have in society.

Moreover, having a society where peoples needs are been met sufficiently that they can pursue other goals just makes for a better society - even if the things been pursued are leisure, or social interactions.

Even the rich benefit substantially from such a society - less social angst, more intelligent society to engage in higher pursuits.

 

[Telosfortelos]

I think there are obvious factors that contribute to growing income inequality. Access to wealth improves ones ability to make money (better education, investment opportunities, ability to start business or get in on the ground floor - all of these opportunities become even better with even more money. Money left over after income minus cost of living turns into investment capital). Wealth also reduces stress and allows people to be more productive (or, more importantly, lack of wealth makes people think less efficiently because they're constantly worried about bills, food, the future, etc. There's a book coming out about this sometime soon, but I forget who it's by or what it's called). And of course the decreased marginal utility of income makes this all more egregious.

Globalization is the less talked about factor, I think. A global economy is great for overall wealth, but while the wealthiest in a wealthy country benefit from increased revenues, the working class in wealthy countries tend to suffer as they have to compete with working class across the globe. Economic efficiency doesn't affect everyone in the same way. I don't think that means we need less globalization (it's great for poor across the world, and it genuinely does improve overall efficiency), we just need a political climate that understands its effects and smartly addresses it through progressive taxation and smarter social programs. It also makes smart investment in education much more important as the types of jobs we need shift.

I've talked about this for a while, and last week I was really surprised when I heard an extreme conservative (I don't know if he self identifies as libertarian, but he might as well) make this point on bloggingheads, only without my conclusions:
http://bloggingheads.tv/diavlogs/39496?in=19:43&out=22:39

 

[dave is ok]

Good luck being a doctor, nurse, teacher, lawyer, engineer, business consultant, financial analyst, or accountant. The first five you can't do at all without a college degree. The last three there's no chance you could do at a multi-billion dollar corporation without a college degree.

You can be an LPN after a 10 month program.

 

[HamPster PamPster]

A major factor contributing to growing Income Inequality is that the top 1% is simply being paid more a lot more. (well that sounds redundant I suppose!)

Income rose across the board for U.S. households over the past 30 years, according to a new report from the CBO. But it went through the roof for the households in the top one percent of the income distribution.

Why did the one percent do so well? Mainly, their jobs pay a lot more than they used to. Top earners do make a lot of money from investment income and business profits. But what CBO calls "labor income" — salary, bonus, etc. — accounts for the biggest chunk of income for the top one percent.

This raises a second question: Why have salary, bonus, etc. gone up so much for this group? Lots of economists have been asking this question, and CBO runs through some of the possibilities, without really settling on an answer. Three of the possibilities suggested by the report:

1. Companies have grown larger and more complex. So a single executive can have a bigger impact on profits. Therefore, it's rational for companies to pay executives a lot more.

2. A shift toward paying execs with stock options means that the value of their pay packages can shoot way up when the stock market rises.

3. "Weaknesses in corporate governance have enabled corporate executives to overpay themselves." In other words, it's not rational for companies to pay executives so much.

http://www.npr.org/blogs/money/2011/10/26/141716961/why-has-income-gone-up-so-much-for-top-earners

Another interesting note:

* The analysis includes workers' health-insurance premiums as part of income. Other analyses don't include the portion of health-insurance premiums covered by employers. Those premiums have gone way up. If you don't include them, income is stagnant for most households after adjusting for inflation

If you argue that everyone's income is going up you're wrong. It only looks that way because employers are paying more for health insurance.


And Finally, Income inequality via candy!

SEABROOK: To go over the numbers once again, the lower-income people in America gained about 18 percent.

SMITH: Two candy corns.

SEABROOK: The middle income gained about 40 percent.

SMITH: Twelve candy corns.

SEABROOK: And the highest gained an average of 275 percent.

SMITH: Five hundred and 50 candy corns, and they're going to need that money for the dentist.

http://www.npr.org/2011/10/29/141823761/the-income-gap-explained-with-candy-corn


There were a lot of good posts in the OWS thread about income inequality. What really gets on my nerves though is this desire to sweep it under the rug. Simply having this thread will be painted by some as "class warfare." I mean if you're going to argue that the 1% is earning those 500 candy corns we'll have that argument but don't pretend its not an issue

 

[ronito]

I think any discussion about wealth disparity in America without discussing the effects of globalization is really missing a huge chunk of the problem.

 

[perryfarrell]

Here's a good read to start with:

George Packer - The Broken Contract, in Foreign Affairs

Subscription only, but go to bugmenot for a login. It's worth reading.

 

[Zaptruder]

Over the past 30 years, income inequality has been growing, and the change has been significant.

More damningly and much more hidden than income inequality is the growing disparity of quality of life.

The average worker works longer hours and has longer commutes compared to 30 years ago. That translates to less time for self improvement and socializing.

Income is only one part of the equation of quality of life - and ultimately, everything we do is about our quality of living - be it improving our life through social and familial bonding, or mental development, or getting nicer stuff, or been healthier.

Additionally, things like modern foods continue to decrease our QOL - with fresher healthier options become more expensive, while palatable processed sweet, salty, fat foods becoming cheaper.

Also, I don't know if household income properly represents the fact that many households require two workers now - if household income has stayed leveled, while the average number of workers in a household has increased, it represents an even more staggering growth in income inequality than previously thought.

 

[entremet]

You can be an LPN after a 10 month program.

Won't you need science credits?

 

[Bay Maximus]

Wealth gravitating towards the top is unavoidable with no regulation in place to spread the wealth. It will always happen, wherever you are, whatever economical system you use.

This really is the only hypothesis for which I have not seen a convincing challenge. The wealthy have all the tools they need to make more money (usually at the expense of the less fortunate), and human nature dictates that most will as much as possible without something in place to give people who may not have been born wealthy or with the right connections an honest shot. Now whether you think America should strive to give everyone a chance is a seperate issue, but the reason for the inequality itself seems increasingly clear.

 

[Zaptruder]

I think any discussion about wealth disparity in America without discussing the effects of globalization is really missing a huge chunk of the problem.

Is there a list of industries out there that are most heavily impacted by globalization? i.e. how fungible skillsets are?

Manufacturing is obvious... but which industries retain jobs in America and why?

And importantly, how is income equality in those areas?

 

[Zaptruder]

This really is the only hypothesis for which I have not seen a convincing challenge. The wealthy have all the tools they need to make more money (usually at the expense of the less fortunate), and human nature dictates that most will as much as possible without something in place to give people who may not have been born wealthy or with the right connections an honest shot. Now whether you think America should strive to give everyone a chance is a seperate issue, but the reason for the inequality itself seems increasingly clear.

As long as money provides material advantages, those with access to more material advantages will be at a greater advantage.

It's so obvious and circular and undeniable.

Are there mechanisms that can reduce this circularity?

What mechanisms were used in the past to reset the game?

 

[reggieandTFE]

I don't have the report off hand, but even W's labor department attributed >40% of the increase in inequality directly to the decline in Union membership. More cars are made now in America than at any time in history, but those jobs aren't middle class jobs any more because they're built in non-union, "right to work" states.

 

[Telosfortelos]

As long as money provides material advantages, those with access to more material advantages will be at a greater advantage.

It's so obvious and circular and undeniable.

Are there mechanisms that can reduce this circularity?

What mechanisms were used in the past to reset the game?

Estate taxes and awesome education programs (let's start with a national pre-k program, please).

Is there a list of industries out there that are most heavily impacted by globalization? i.e. how fungible skillsets are?

Manufacturing is obvious... but which industries retain jobs in America and why?

And importantly, how is income equality in those areas?

Even sectors where Americans aren't directly competing for jobs globally would be affected as Americans have to compete for those remaining jobs. There is upside to globalization, so it's possible people in those remaining jobs could still be better off.

 

[Invisible_Insane]

This thread will be about American Wealth Inequality, its causes, and possible solutions.

Here are a few possible explanations that have been offered:

1) Income inequality is not rising. It is an artifact of the research, specifically a consequence of rising immigration from poor hispanic countries. That is, the income inequality is not a result of a traditional american family becoming poorer, but very poor immigrant families skewing the data.

2) Education. Because of the advancement of technology, education is more important than ever, and those without college degrees are falling increasingly farther behind.

3) Lack of government regulation. The strong enforcement of equality put in place by FDR and the presidents immediately following him literally forced equality. As those regulations have been weakened or repealed, inequality has grown once again.

You can of course provide your own causes, as that's part of this discussion. How do we fix this problem, if at all?

I don't intend to be pedantic, but I think the distinction between wealth and income inequality is important to pay attention to. Wealth inequality is a structural, multi-generational problem that is both difficult to quantify and difficult to correct, and the more important problem of the two.

That first hypothesis is completely risible--it's absurd to think that an influx of migrant workers would be responsible for generating the type of inequality the US is experiencing. The gap between the fourth and fifth quintiles is huge; migrant workers would have virtually no impact on that, and so it's clear that the top of the income distribution is accelerating away from the rest of the population.

Skill-biased technological change, is part of the problem, but the social policies that we've addressed it with are the real problem, in my opinion--other advanced industrialized economies manage to distribute the gains of globalization more equitably (like Germany and Japan), but also find ways to mitigate its detriments more effectively. I think a significant change in business culture would be required--less focus on short-term profit, and more on protecting people--but I'm not sure how one goes about effecting that.

And we need the estate tax back. Badly.

 

[gcubed]

I don't have the report off hand, but even W's labor department attributed >40% of the increase in inequality directly to the decline in Union membership. More cars are made now in America than at any time in history, but those jobs aren't middle class jobs any more because they're built in non-union, "right to work" states.

its beyond that though, a lot of labor is moving to white collar services, where unions either aren't as organized yet, or aren't as entrenched. I know we've had conversations about how hostile my company is to unions.

 

[Deified Data]

I've found that inequality exists because not all people are equal. Is it not that simple?

 

[Evlar]

I've found that inequality exists because not all people are equal. Is it not that simple?

The topic of the thread appears to be why inequality is growing.

 

[Deified Data]

The topic of the thread appears to be why inequality is growing.

Is it a problem to be solved, or an innate part of being human?

 

[Lathentar]

Is it a problem to be solved, or an innate part of being human?

Too much inequality is a problem for society.

 

[Evlar]

Is it a problem to be solved, or an innate part of being human?

I see no reason the change in income distribution between 1980 and 2010 would be "an innate part of being human". In fact, I don't really know what you mean.

EDIT: To illustrate what we're talking about (and Opiate can correct me if this isn't the topic of the OP), from Wikipedia:

EDIT EDIT: Actually, the strict reading of Opiate's post discusses wealth inequality, not income inequality. One is often used as a signal for the other, though that's not necessarily a great correspondence, particularly when so many people's wealth is tied up in volatile assets (real estate). I'll have to dig to find some estimates of wealth inequality.

 

[Alpha-Bromega]

Is it a problem to be solved, or an innate part of being human?

there's no way that systematic, organized fraud is some 'biochemical' despondency of Homo Sapiens.

 

[dinazimmerman]

Are we talking about wage, income, consumption, or wealth inequality? Should we take the distribution of working hours into account? Are we talking about individual or household inequality? If we are talking about households, should we also take into account household size and within-household inequality? If we're talking about income inequality, should we include government benefits and exclude taxes? Should we include health insurance premiums paid by employers? By the way, what measure of inequality should we use? Gini coefficient, variance, or ratios of certain percentiles (P90/P10, P50/P10, or P90/P50)? Or should we look at the median instead?

Before even investigating the causes of "economic inequality," the issue of simply operationalizing the term is already complex.

 

[jorma]

Is it a problem to be solved, or an innate part of being human?

It's both.

 

[dude]

I don't much about the topic, but a friend of mine recently linked me to this article that I found interesting http://www.heritage.org/Research/Reports/2011/07/What-is-Poverty

 

[Deified Data]

there's no way that systematic, organized fraud is some 'biochemical' despondency of Homo Sapiens.

What, greed? I beg to differ.

 

[FLEABttn]

What, greed? I beg to differ.

Greed is the desire for more, possibly more than you need. How you get more isn't the same thing as wanting more. Fraud isn't inherent to greed, but greed can be inherent to fraud.

 

[Pollux]

Subscribed. On my phone now but will definitely be participating in this discussion later.

 

[Deified Data]

Greed is the desire for more, possibly more than you need. How you get more isn't the same thing as wanting more. Fraud isn't inherent to greed, but greed can be inherent to fraud.

Greed coupled with moral weakness creates fraud. Both qualities are quite commonplace in our country.

 

[Hari Seldon]

I'm pretty sure it is for two reasons not stated in the OP:

1. Globalization - western workers are increasingly wage competing with developing countries. This can be fixed with tariffs as has always been the case until very recently.

2. Corruption - there is no incentive for either party to look out for the little guy when the vast majority of their funding comes from the 1%. The plebs can easily be tricked by campaign adds once they have the money to put these out.

 

[DanteFox]

I always found the term "wealth inequality" to be an interesting term. I see it thrown out almost exclusively by liberals and in an exclusively negative context. Here's what I find interesting about this:

1) By bringing it up as a relevant topic, and in a negative context, this implies that it is an important issue that deserves "solving."

--- This raises the question: Why? Which leads to my next observation:

2) Taken at face value, the term wealth inequality would seem to merely mean an inequality of wealth. A fairly simple concept to understand. So why is this important? It seems, on its face to be a fairly trivial statistic to keep account of. Wealth inequality exists between two people who have $6 and $7, as well as two people who have $1,000,006 and $1,000,007. Two people with a billion and one dollars and eleven billion dollars are more unequal than two people with one dollar and eleven dollars.

----This is, presumably, because the people who are at the lower end of the inequality are seen to be in a bad financial condition. But then, why not just say that? What does their standing compared to those at the top have to do with their current condition? Rather than talking about wealth inequality as a problem that needs solving, why not simply discuss poverty? Who cares if two people have unequal wealth if they're both living well? This brings me to my third point:

3) The underlying assumption made by those who highlight wealth inequality as a problem is one of a certain kind of "fairness." In their mind, this inequality in wealth is a symptom of an injustice that has occurred. The assumption here is that normatively, wealth should be equal. This is why this issue is almost exclusively advanced by people of a more liberal, left wing political leaning. They see difference in wealth as injustice for which the rich are usually blamed, or the political system. They believe that the system must be being gamed, otherwise the poor and middle class would have a bigger share of the pie, so to speak.

---The fundamental, grounding view of all this is that wealth is deserved in proportion to intention in conjunction with some abstract view of fairness, which is dictated by how hard someone works, regardless of the results of that work. This is why these people focus on this problem even though the U.S. has such a high standard of living compared to much of the world: The inequality itself is seen as an injustice, regardless of the absolute standard of living which anyone involved enjoys.

My conclusion: This is where I fundamentally disagree with this point of view. I don't see wealth inequality as an issue, only the absolute wealth compared with similar wealth classes of times past. In that respect, we're doing fine and the U.S., in conjunction with the entire world, is seeing its standard of living do nothing but increase.