Income Inequality
- Thread starter CharminTide
- Start date
The two most important questions when discussing policy (as in discussing history) are:
1. Why? (What are the causes of this phenomenon?)
2. So what? (What are the implications of this phenomenon?)
3. What are the incomes US vs Europe for each bracket?
4. How has this changed over time?
5. How has this affected buying power?
and so on
My family's income has increased greatly over the years. I went back to school on multiple occasions to make myself more valuable, and my salary has increased nicely over the years. My wife went from having a near maxed out salary as an ICU nurse to just about tripling it after finishing her graduate degree in anesthesia. Since we don't waste our money and put away a sizeable amount for investments, our passive income is such that we could live off that, if necessary.
Some people would look at what my wife and I have done say, "Great! You have taken care of yourselves and your family. You create a lot of economic activity, which helps many other people. You contribute many, many times over." Others see only income inequality and it offends their sense of social justice.
Comparing our income to those who don't pursue marketable skills, don't work hard to get ahead and have disposable income, and don't invest their disposable income ..... well, I have no doubt the income inequality is great.
Likewise, there are people who have pursued more lucrative careers and invested wiser than my wife and me. Again income inequality.
Is income inequality here a problem? Should taxes be raised on my wife and me? How about for the guy who has done better than my wife and me? Is taking more money away from productive people a good idea? Is giving that money to the government so it can be wasted a good idea? Does cutting off the legs of a giant increase the stature of a dwarf?
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Do you truly think that's the only alternative?
Let's not kid ourselves: there are large socioeconomic divides in Western Europe and elsewhere around the world. Eliminating that gap is not and should not be the goal. But one must recognize that the degree of inequality in the US is an outlier among most developed nations, and I think it's worth asking whether that's a healthy long-term state for our society. IMO, it is not. Education, as one example, is becoming increasingly walled behind a wealth barrier. Do we want a self-reinforcing system where the most effective tool for scaling the socioeconmic ladder can only be accessed by those on the topmost rungs?
LOL!
More people are getting four-year and post-graduate degrees in the U.S. than ever - both in terms of raw numbers and in terms of percentage of the overall population - and the claim is that education is being walled behind a wealth barrier? What we're seeing is not some elaborate scheme by some scheming group of elites to horde education amongst themselves and those they feel worthy. Rather, it is simply the natural result of the over-emphasis on and over-allocation of four-year and post-graduate degrees. At the same time, we are experiencing a dearth of technically skilled workers for whom jobs are going daily unfilled. This inequality is so stark that an intelligent, driven young person can make one decision at age 18 - to enroll in a technical apprenticeship program instead of pursuing a four-year degree - and the result 12 years later is likely that they have earned hundreds of thousands of dollars more, while having incurred little to no educational debt, than their average classmate who chose to pursue a four-year degree.
I'm sure you want to say something about mounting, massive student-loan debts for most students but that isn't the problem; it's just a symptom of the problem. If there wasn't an over-allocation of degrees - especially functionally useless degrees - then universities wouldn't be spending nearly as much money on staff & faculty, facilities upgrades, and student attractions in an attempt to compete for more and more students which would then naturally result in lower, average, student costs.
Considering how many functionally useless degrees young people are pursuing, massive student debt could be considered as a sort of stupid tax, as their degree choice will give them little to no assistance in earning income with which to pay off their debt.
The real problem is how defunct our entire educational system now seems to be. We take 12 years to teach and rehash subject material that should really take barely more than half of that time to master - and that's for your average student. Meanwhile, we aren't equipping our children with the requisite knowledge and skills to be able to make proper career and education decisions following high school graduation and, worst of all, we seem to be discouraging many of them from making what would be their best decision. At the same time, we're failing to equip our children with what should be basic life skills; your average high school graduate isn't able to reconcile their own checking account.
Wy do you suppose that is?
Okay, so what do we do about it?
Having looked at it from the inside, education looks like a massive bubble to me.
Costs have gone way up, four times the rate of inflation over the last 33 years (due, I would argue, to past government interventions in the education market). Graduates have $1.5 trillion in student loan debt. Graduates cannot repudiate that debt by declaring bankruptcy (except offspring of members of Congress, incredibly). It is unsustainable. If I was running a high cost, low payoff college or university, I'd be worried.
As has been pointed out above, government has done an awesome job at allowing a tremendous number of people pursue worthless degrees at very high prices. Completely unnecessary, yet the proposed solution by many is to have everyone get a college degree. Instead of acknowledging dumb policy and reversing course, doubling down is the norm.
[video]https://reason.com/reasontv/2018/05/29/stossel-the-college-scam[/video]
[video]https://reason.com/reasontv/2018/05/29/stossel-the-college-scam[/video]
None of that matters. Most likely you are white and privileged and don't deserve the high quality of life you lead. Therefore you now must have most of your wealth taken away and given to those who didn't try in school and/or made bad decisions which caused their poverty. That really doesn't matter either, the only thing that matters is that successful white people are bad, and poor people of color are good, and the gubmint is going to take from you and give to them. Why else is our southern border being invaded? Lots of free goodies up here and some rich white guy is paying for it all.
We will always have income differences because we will always have people with differing IQ levels, skill sets, and attitude. Even the LORD said we will always have the poor.
You are rightfully concerned about the effects that income inequality can have on the long term stability for a nation state. I suspect that a part of your solution to this would be to have some measure of increased taxation on individuals who are in highest annual income strata than those in the lowest. Or perhaps instituting some sore of income control or cap so that there’s a max salary that one can earn in a given profession. Or that there has to be a much higher nation hourly minimum wage (perhaps on the order of $16-$18/hour). Let’s say we put into measure one or more or all of these ideas. Can we be reasonably assured that it will not 1) lead to more wasteful government spending 2) disincentivize the best and brightest among us to not work as hard as possible in order to better their lives 3) put small businesses out of business because of increased taxes and increased cost of labor.
I share your concern about income inequality. I’m of the opinion that the gap in income inequality can be effectively decreased by encouraging individuals to push themselves to improve their marketability through meaningful further education/learning a trade/etc. By meaningful further education I mean pursuing a degree which has proven correlation between its attainment and higher pay (such as STEM related fields, nursing, etc). Or most certainly learning a trade such as electrician, plumbing, CNC machinists or heavy machine operator among others.
I hope that you would not be an advocate of punishing those who are successful as a way to permanently fix this problem. Because it won’t work.....as someone else has stated previously on this thread inequality has existed since the dawn of time. And that will surely continue to be the case in terms of the skills/IQ/ability etc that each individual has. What we need to do is encourage those in the lower socioeconomic strata to equip themselves with the marketable educational foundation and/or technical skills which will help them and their families escape their current situation.
Sorry for the long post. My $.02
As for the general issue of income inequality...
In my, albeit limited, experience the simple truth is that the vast majority of those who remain in poverty do so voluntarily - either by failing to avail themselves of the opportunities that do exist or else by making poor life choices. This is, of course, coming from a white guy who happened to grow up in a household which, while it didn't feel as though we were in poverty, was technically below the poverty line for much of my childhood and whose own household qualified for food stamps early in its existence.
It may not be easy, it may not be possible in your current location, and it certainly won't come to you while you're sitting on your butt but it is possible to change your own station in life, regardless of from where you came.
Like the old saying goes - it's not about where you've been but, rather, where you're going.
In my, albeit limited, experience the simple truth is that the vast majority of those who remain in poverty do so voluntarily - either by failing to avail themselves of the opportunities that do exist or else by making poor life choices. This is, of course, coming from a white guy who happened to grow up in a household which, while it didn't feel as though we were in poverty, was technically below the poverty line for much of my childhood and whose own household qualified for food stamps early in its existence.
It may not be easy, it may not be possible in your current location, and it certainly won't come to you while you're sitting on your butt but it is possible to change your own station in life, regardless of from where you came.
Like the old saying goes - it's not about where you've been but, rather, where you're going.
It's clearly not a problem with a simple solution. While a less regressive taxation system, proposals to increase minimum wage, and/or provide a universal basic income are certainly conversations worth having, they would not alone close the gap. TW said that education finance is a bubble that will have a reckoning sooner rather than later, and I completely agree. Others have suggested a renewed focus on vocational training, and I agree with that as well. Our education system is broken, and we will all suffer for that unless we address the problem. On the other hand, I don't agree that only pursuants of law, medicine, or STEM careers deserve a higher education, and I wouldn't want to live in a society that does not allow artists to also study their field. Culture enriches all of us, and I don't think society benefits from disincentivizing that area of study. On the whole, though, I think we agree more than we disagree.
Whatever the cause and solution, it's hard to argue against the notion that there are massive structural issues with the current U.S. economy, and I don't think this trajectory is sustainable.
So you're saying that if someone who happens to be born into poverty has the drive and determination to change their station in life that it is impossible for them to do so?
I personally know at least a dozen examples that prove that to be false.
Is it easy? No. But it damn sure is possible. But it isn't if you sit on your butt doing nothing, waiting for it to just come to you, or sit there making excuses about why you can't do something about it. All you have to do is do something about it.
Because it is possible for some people does not mean its possible for all. With this logic the only reason why everyone here isn't a billionaire or a sports star or a whatever is because we are all lazy. I mean its possible for Bill Gates, Usain Bolt, Tom Brady, Warren Buffett, etc. Why can't you do it?
So, you just conceded that you need luck. Yet, everyone can do it. That doesn't make sense.
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