Discussion can be had all year long, but the executive caste will maintain it. There's no law or peaceful incentive to change the tendency. It's important to them that the plutonomy be maintained and extended.
Carl Schmitt critiqued liberal democracy with this very same premise. The myth of the disinterested neutral "discussion" seeking consensus optimal solutions, (vs the reality of factional interest groups fighting for 0 sum spoils and power).
I agree that that is a problem. But it is a separate problem. If two problems depend on each other, should we fix neither because that fix won't matter in isolation?
Because it can be. The boards that set it are made up of executives, and it's good for all that the bar for average pay gets ratcheted up.
While a good CEO may be worth a multiple of any line worker, the notion that a CEO will leave for some other pursuit only holds water if the other pursuits hold higher multiples and are readily attained. They would all work for one-quarter the comp if that is all they were offered. As it is, they'll happily work for double also.
CEO's have a lot of influence on the value of firms they manage, as we're surely all aware of. CEO compensation is generally about aligning interests between the CEO and the firm itself.
Because just like congress, they can vote to give themselves raise and the amount. Can you as a typical employee guarantee yourself a wage increase, and the amount?
Not hard to see your pay increase as much as you want it to, when you're actually in control of setting it and not just accepting what is given.
The country is being flooded with as many low skilled workers as can be bothered to make the trek, and has been for quite a long time. This problem will never see change for the positive until the ruling class no longer benefits from cheap labor. Don't forget it was them who caused this on purpose to begin with starting in the 1960s with the Immigration and Nationality Act of 1965.
I’m skeptical of the premise of this article, but I know that I saw an A&W advertising CAD $17/hr starting wage today. Not only is that above minimum wage but they are advertising it out front. Down the street is a factory asking for electricians at $40/hr. I hope that publishing wages/salaries becomes more normal. I think it’s an equalizer.
I see a lot of fast food places with similar signage, but if you get up close, there's an asterisk that notes that those starting wages are for full-time employees, which they don't actually hire because they don't want to give full-time employees benefits, or for management or corporate employees.
"Income" and "wage" are used interchangeably in this context - income derived from labour, ie salary, bonuses etc. That's what "income inequality" generally refers to.
"Wealth inequality" is what's relevant if you're concerned about the mega-rich like Jobs. If your assets are big enough you can live off of them without any labour - through rents, dividends, sale of assets etc.
It's interesting if income inequality is going down considering that wealth inequality is worsening in the developed world due to the recent massive inflation of housing assets.
Easily explained, the assets became unavailable to whole chunk of population, and the relatively tiny increase of wages does barely dent the increased cost of living for them.
The remaining assets are purchased by the rich who can afford them.
Easiest way to present this problem would be to measure in PPP adjusted dollars the time it takes to save to purchase a basic asset (usually living space) subtracting living costs. Make sure to also consider the asset price long term trend while at it.
If you cannot save, the time is infinity, if you cannot buy it in a lifetime, better also count your (ever poorer) kids in.
This is only the most basic estimate, remember that over time any health issue or other catastrophe is likely to happen, and the response to these often depends the savings you have... (You can count a flat buffer or a percentage.)
There are so many ways in which this article really puts on display the purpose of the WSJ it’s hard to count. The most important ones are
1) labor organization (unions) are responsible for the meager gains. That’s it. If higher wage earners (like me!) actually engaged with society and organized their trade we’d get the same gains
2) inequality is not earnestly, meaningfully defined as the difference between compensation for types of labor: it’s the difference between the equity in society held by the workers versus the owning class.
Labor unions also shut out marginal and marginalized workers from their own sectors, or even from the labor market as a whole. The labor income of an unemployed worker is zero.
> In the decades before the pandemic, the wages of lower-paid, less skilled hourly employees steadily lost ground to those of skilled workers, college graduates, managers and professionals. In the two years since, those trends have sharply reversed.
We don’t know if this narrowing in inequality will last.
I'm certainly for economic justice. But how is comparing apples to canned tuna "inequality"?
As another comment already mentioned, wouldn't our time be better spent discussing the extreme delta between the top and everyone else? The delta between service worker and say tech is far less than the delta between that collective average and the top of the financial food chain.
But here we got again. Distracted. And letting the lede tip toe out of the room.
> The delta between service worker and say tech is far less than the delta between that collective average and the top of the financial food chain.
True when we think purely in terms of wealth and income, but I'd say the reverse is true in terms of quality of life.
A SV tech worker earning six figures has food and housing security, likely has insurance and dental, has a 401k, is possibly building wealth with stock options, likely has a long term achievable plan to buy a home if they don't own one already, has an emergency fund. They can afford to live in a safe area and send their kids to a good school. That's a lot of vital needs satisfied, many (maybe even most) of which are not fulfilled for the average minimum wage service worker. A huge number of people are one missed wage payment away from poverty.
Sure, Elon Musk has a private jet and can fly anywhere he wants every day of the week. But his fundamental needs (physiological, safety, security) are basically met just as well as mine.
The concentration of wealth at the very top is deeply concerning and potentially destabilising. But I think it's worth remembering the differences between the secure end of the middle class and the bottom half society.
Ultra-rich usually do not receive high wages, but they pocketed around 20T(my estimation) in last 5 years through leveraged trades on inflated stocks/private equities and real estate enjoying near zero loans rates.
Now they own very large chunk of American businesses and land/real estate, no need to work for wages.
> Remote work, deglobalization, stalled technology have started eroding some advantages of higher-skilled workers
Their premise is broken. The largest inequality is not between highly skilled workers and everyone else. It is between the wealthy (top 0.1% or 0.01%) and the rest.
That's not what the literature says about differences in income - there, skills are indeed very relevant (though of course sheer luck and superstar dynamics matter a lot at the very high end). Wealth is a whole other ballgame, it's a stock not a flow; it grows globally when asset values rise (as they clearly have in recent times, due to r < g); and at an individual and subcultural level when people refrain from drawing down on it, preserving a long time horizon often across many generations.
This is the magic trick the ultra high net worth have done. The vast majority of their assets are never sold to realize any income. They just keep leveraging upwards to expand and also borrow against their assets to run their lavish life.
Not a broken premise at all. The focus on the ultra rich is mostly just a political ploy since it's easy to villainize extravagant wealth. But the vast majority of income (I'm including capital gains in this) is made by the middle class and wage-earning upper class, not by the ultra rich. If you take all the wealth of the ultra rich and distribute it evenly, every person would get a one-time, nice, but not life-changing check (somewhere between $70k and $150k). And then next year everyone is mostly back where they were before except you can't raid the ultra rich again since you just wiped them out.
Nonsense, you're doubling down on the false premise. The problem with the ultra rich isn't solved by a one time tax on their accumulated wealth, its solved by ongoing redistribution of the profits from industry into workers pockets.
A classic case that was borne out this year is the dichotomy between Warren Buffet and the average railway worker. Railways took in massive profits over the pandemic, and precision scheduling literally killed workers to get there. All the while our supply chain breaks down.
And the problem with the upper middle class and middle class, and from the developed to the developing, from the perspective of those lower who want your stuff, is solved by redistributing your stuff to their pockets. There can be more than one "problem" that can be solved by redistribution.
The vast majority of the profits from those industries are not going to the ultra-rich either. They mostly go to pension funds and 401k holders.
The focus on the ultra-rich is an obvious political ploy. In every western country with a more socialistic arrangement than another, the taxes on the middle class are inevitably higher. And the salaries for high-skill positions are also depressed to begin with, due to legal/social arrangements that force more egalitarian pay scales. You can't get what you want by just taking the income/wealth/whatever of the tippy-top.
Weird that you think incomes that can approach effective tax rates of ~50% are the problem and not the capital gains that are taxed at 15% to 20%.
If you are wealthy you don't need an income that's taxed a high rate for the plebs, when your wealth is generated by capital gains. Surely you knew this.
Also, your hypothetical is a bit weird. The point of investments isn't to liquidate them immediately, but to reap returns. Owners of significant assets tend to borrow against them instead of liquidating them.
Like I said, I'm including capital gains income in my figures. I'm not sure what point you're trying to make in your first sentence. Capital gains are taxed lower because, in theory, that income was already taxed at the corporate tax level, since capital gains come out of corporate profits. Wages, on the other hand, are a corporate expense, so they're exempt from the corporate tax. This whole thing is somewhat broken by the corporate tax being easily avoided for large corporations. But anyway, this whole thing is an aside and irrelevant.
Capital gains are created by investing income that has already been taxed. Any tax on capital gains, at least in principle, is double taxation. (This doesn't mean that the optimal tax on capital gains should be zero because in practice, lots of capital gains correlates with lots of competence at generating earned income - so, in a way, that double taxation can be seen as earned-income taxation in disguise. It does mean that there's plenty of reason not to treat them the same.)
The ultra wealthy avoid having much income by borrowing against their assets instead of selling. So they usually never realize capital gains on most of their assets all the way until their death.
Nah. Have you ever heard a mainstream progressive offer up a concrete plan to actually address the existing power asymmetry? All you get is impotent platitudes about reversing Citizens United, or the implied belief that tax-and-spend policies (i.e. the progressive platform) will naturally solve the problem over time.
In other words, the pitch is something like, "The ultra rich are have too much influence. How do we fix it? Why, just vote progressive!" which is exactly what you would expect if the focus on the ultra rich was merely a political ploy.
"mainstream progressive" does all the lifting in that sentence.
You knew for a fact that I could point to dozens of people so you guarded it with something you could move the goalposts on and then be "dude that's not mainstream enough".
Cool. Not playing that stupid game. The entire internet is so fed up with all of these stupid right wing negging games. Nobody cares any more.
You're liars frauds and scoundrels. Everyone's on to it
Are you under the impression that paranoid ravings are deserving of a considered response? You haven't engaged, you've only ranted. The fact that you lack the awareness to realize this is a sign.
This is pure conspiracy thinking, it sounds just like those people who obsess over Bill Gates and George Soros. Please explain how the ultra-wealthy can be so powerful if they aren't spending down much of any wealth, and a lot of what they do spend is on charitable grants made in the public interest to 501(c)3 organizations, which must be politically neutral as a matter of law.
They use 501s as kobashi schemes for tax dodges through donor advised funds. It's a shell game. That's why they take the $1 salary as well.
As far as the other one, if you think, say, Peter Thiel or Jamie Dimon has the exact same access to the political process to influence policy as the guy fishing for bottles in the recycling dumpster out in my alley, I don't know what to say.
Money doesn't "buy" power and influence, power and influence is an ancillary structural artefact of the money. It comes with rights and privileges. We'd call them oligarchs if they lived in any other country.
It's not conspiracy to say that the ultra-rich use and abuse their wealth to work to tilt the system further in their favor.
Many people make the mistake of thinking that "many people with a common characteristic working in ways that mutually benefit the whole group" is necessarily a conspiracy. Sometimes it is, sure, but very rarely. It's much, much more common for members of a group—like, say, the very wealthy—to individually recognize "hey, if I do X, it makes things better for me!"
That's what happens with massive wealth inequality.
501(c)3's are some of the most political organizations out there. The only thing they can't do is be directly involved in electoral politics. But social influence and ideologically driven work, that's totally fine.
The French Revolution was an evil thing. Its horrors exceeded anything that the ancien regime could even fathom doing. And in any case, the situation isn't comparable. The average poor American is overfed and lives a life of comfort that the rich of 200 years ago could only dream of.
Rentier parasites enabled by state overregulation, which is in response (usually) to overeager or immoral entrepreneurs (ARM loans, thalidomide, slum lords,crypto, supplement industry, lemon cars, malware, vaporware, stock scams, etc). The regulation is supposed to protect us, but in reality just enables those with the resources to meet the new standard to have a (olig|mon)opoly. I'm not sure what the solution is, just pointing out how "rentier parisites" tend to arise.
The premise of this article is absolutely disgusting. The inequality that matters isn't the difference between blue collar workers and college grads with marketing and tech jobs. This is just propaganda to destroy the middle class.
Why is idea of decreasing inequality between the lower and middle classes so offensive? This isn't a zero-sum game.
The college-educated middle class aren't losing anything here - their wages went up too.
All that's happening is that the wages of low income workers increased more.
This is great if you actually care about the quality of life of low income people. The difference between middle class people like me and the lower class in terms of the meeting of basic needs (food, health, education, housing) is enormous - far bigger than the gulf in quality of life between me and Jeff Bezos. I don't have a crippling yacht addiction I desperately need to deal with.
The problem isn't "trying to decrease the inequality between lower and middle classes".
It's painting the middle classes as the source of the inequality. That's what leads to the zero-sum thinking that lets the upper classes sit back and laugh while we fight.
Was the purpose of this article to paint that picture? Hard to say. But when you read a lot about smug Silicon Valley programmers and their six-figure salaries and how different that is from the poor people who have to root through their garbage (whoops, no, they made that illegal), and rather less about the very unsexy carried interest loophole and other means by which the billionaires of the world grow and maintain their wealth, the intention behind that disparity becomes less important than the impact.
Matters to you because you wouldn't be harmed by it?
All egalitarian, equality doctrines will end up here, why wouldn't they? What is the limiting principle?
This is why they should be rejected. Pretty funny to see the outrage when the equalizing starts moving down the spectrum. Why shouldn't that blue collar worker want you to be equalized to him, why should he care about your disgust?
Matters because it is nonsensical. There are some cases, such as AI research contributing to automation that replaces workers from one industry with another, or perhaps more directly, Uber replacing taxi workers, where income can be envisioned to be taken from one set of workers pockets to another.
But in reality, that's not how this works. Each company is distinct and has its own funding models. And the vast majority of money taken out of all workers paychecks regardless of industry isn't extracted by other workers in unrelated industries, it's removed by the employers to line their own pockets.
I think you're mistaken here, blue collar workers and white collar workers are in the same boat when it comes to the precarity of their means of providing for themselves and the relations they have with the entities that dole out those means.
Division is what I interpreted as what elicits disgust here, when workers of all stripes would be stronger if they instead were united.
The scraps that are thrown to blue and white collar workers alike pale in comparison to the wealth disparity of those who need to work as a whole versus who they must work for.
The inequality between a Google engineer and a Starbucks barista is tiny compared to the inequality between a Google engineer and Elon Musk.
The article only covers the former and not the latter and therefore acts as the kind of propaganda expected by WSJ. In the author's defense, they admit they're focusing on one narrow benchmark and ignoring capital gains and dividends in this article. The article still has value. But the fact remains that the article has the word inequality in its title and completely fails to cover inequality in its actual sense, the way we understand it in a political context.
I'm not a fan of communism, but that ideology produced two of the major world powers. Entire generations of illiterate peasants were educated, entire economies were completely reconstructed in a way that is pretty much unprecedented. There was immense repression, the human cost of Stalinism for example is uncountable. But capitalism has caused immense suffering as well.
It's better to simply speak plainly of the effects systems have had rather than trying to moralize away the good in order to emphasize the bad, in my opinion. Dogma makes for bad reasoning.
Every year, 20 million people die from preventable causes like hunger or lack of vaccination under global capitalism. That's modern capitalism at work.
The history of capitalism is rife with famines that have killed millions to tens of millions each, and centuries of death and brutality under the rule of companies like the East India Company and capitalist regimes that bought and sold millions of human beings as assets at a global scale. Many of those "assets" suffered and died through just being traded, and when successfully sold, suffered through generations of brutality and subservience performing as capitalists' "property".
At one point we even had a prominent capitalist celebrate the amazing returns on investment they got from enslaving their slaves' children. That prominent capitalist was Thomas Jefferson:
> What Jefferson set out clearly for the first time was that he was making a 4 percent profit every year on the birth of black children. The enslaved were yielding him a bonanza, a perpetual human dividend at compound interest.
Hell, capitalism under the Nazi regime alone is responsible tens of millions of deaths.
These tiresome ideological ping-pong battles, trading the death-counts and horrors attributable to simplistic labels of economic systems are useful only to remind less fanatical observers that said horrors are not innate or exclusive to any particular system or label, and that the primary issues are (a) scarcity of resources and (b) the brutality of nature, with everything else just being a case of humans trying desperately to cope with these grim realities.
Everyone can play the game of saying everything horrific in the past or today is directly attributable to the economic system that they oppose and that their opponents advocate, and we can even go further and play tricks like this: "Nazism was really a left-wing system in nature". See, it's great fun.
Ultimately it's pointless though; it doesn't persuade anyone to think differently about anything, and serves only to make the writer feel righteous, without needing to go to the effort of formulating and advocating something genuinely better and workable for the future.
it's hard to give capitalism a lower death tole. India and Ireland under the British had entirely preventable famines also, and all the cia backed coups had quite high numbers of deaths themselves
Dogma makes for good rhetoric, but it doesn't stand up to daylight. The Soviet Union advanced the technology of not just itself, but many of its vassal states such as Cuba. China has long since abandoned communism-in-practice, but it is still one of the most advanced nations in the world. If the success of those countries cannot be accounted to communism, then the success of the U.S. cannot be attributed to capitalism either..
And as far as death tolls, they're completely indefensible, that's why I am not a proponent of communism or other anti-democratic ideologies. But it is curious that the death tolls from fascism never get added to the death toll of capitalism. Each ideological wing generates human suffering at the far end of anti-democracy, which is what we need to avoid, whether it comes disguised as facism or communism, or whatever else.
Just to be clear we are talking about the same world.
The Soviet Union felt because the people, from a few of the previous agricultural powerhouses of Europe and western Asia were starving. If that's what reconstructing an economy looks like, I'd rather we don't.
Yes, the communist countries had some good results on education. I'm not sure any of them is worth copying, but they are worth looking it. One would expect a completely different ideology to get some things better, and some worse; it's incredible how few things they managed to do better.
