What do people think about income inequality?

[PoliSciStudent]

Greetings, all! I'm new here and hope that I will not offend anyone by confessing at the outset that my personal political leanings are probably farther to the left than is the norm in this forum, but I promise, I'm not here to be disruptive or disrespectful of anyone.

I am a graduate student in political science and would honestly like to hear the views of conservative thinkers on a point which has been troubling me with respect to the direction our country is heading, namely the widening gap between rich people and poor people.

According to the US Treasury Department, the richest 2% of the country own 80% of the wealth in the US. That's honestly not just some liberal's opinion, that's really true, you can check the statistics yourself if you don't belive me. Flip that around and that means that the remaining 98% of us have only 20% to go around amongst all the rest of us. In the last three years, the income of the wealthiest .001% has increased by 600%, in other words, for every $10 million/year they were making before, they're now making $60 million/year.

I read in another article that 5 of the 12 wealthiest individuals on earth are from the Walton family which owns Wal-Mart. At the same time, human resources staff for Wal-Mart, when they hire a new employee, will routinely complete paperwork for new hires to receive foodstamps, as the wages they pay their workers are so low that, even as full-time employees, they are assured of falling below the poverty level and qualifying for foodstamps, without which they wouldn't even be able to afford to feed their families.

Does this sort of thing not bother conservatives? I've read studies which suggest that Americans by and large don't mind extremes of personal wealth as, this being the land of opportunity, we harbor some hope of one day rising to those lofty summits of affluence ourselves, so don't feel we should judge others for achieving that to which we ourselves aspire. Does that sound about right to you all? Anyone have any thoughts?

[Xenalyte]

I've read studies which suggest that Americans by and large don't mind extremes of personal wealth as, this being the land of opportunity, we harbor some hope of one day rising to those lofty summits of affluence ourselves, so don't feel we should judge others for achieving that to which we ourselves aspire.

That sums it up nicely, actually. Welcome to FR! We don't bite. Okay, some of us do. (Watch out for Laz . . . he sharpens his teeth on a whetstone.)

[PA Engineer]

Where are your links to support your "facts" and "statistics"? There can be no discussion without an examination of your alleged claims.

What type of meaningful work are you going to do with your major?

Don't become envious when in ten years the student of medicine or engineering ask for extra napkins at the fast food window. Just remember to smile and ask them if they would like to supersize their order.

[Anitius Severinus Boethius]

I'm going to try a parable. We'll see how informative this is.

There was once a man of some wealth who owned a small farm out on the edge of the frontier. He wanted to keep it up, more as a retreat than anything else, so he hired 2 men to work out there.

The first man was very excited to live in a house for free, with a larder stocked by the wealthy man once a month, and the only work was keeping the place in good condition for when the wealthy man would stop by for the occasional vacation.

The second man, likewise, was very happy to have this opportunity. But he knew that he didn't want to just live in someone else's house, he wanted to build and live in his own house one day.

The first year went by and the wealthy man was very pleased by the condition of the house and gave both men a little cash bonus for taking such good care of his property. The first man took that cash and indulged in everything he wanted to buy from the marketplace of the local town. The second man, took his cash and bought a handplow and some wheat seed and set to work planting and harvesting wheat which he sold at the local market that fall.

The second year, the wealthy man again gave a little cash bonus. Again the first man spent it on what he desired, while the second man invested in more seed, and a plow and mule.

After 10 years, the wealthy man died and his family sold the property. Both men were out of their cushy position. A few weeks later, the first man saw the second man and complained bitterly about how he had to work hard for little pay and a bed in a crowded flophouse. The second man felt bad for him and offered him a room in his newly built house and a job helping him work his fields.

Both men had equal opportunity, both had the same amount of time. Is it unfair that the second man owned his own business and his own house? Did he get a bigger share of the pie, or did he create his own wealth?

Is the second man an evil rich man or did he use his wealth to provide a job for the first man?

Should the second man sell his house and give half to the first man?

How do you feel about this wealth discrepancy?

[petercooper]

I've also lost my job, have no health insurance, and am having to borrow $20,000/year to make my tuition payments. Now, if I were living in Europe, not only would I not be paying tuition, I would actually be receiving a modest stipend to cover my living costs while I was in school. In addition, I'd be covered by a public health plan, which admittedly would probably not provide quite as good a coverage as the private insurance I could opt for if I wanted to spend the extra money on it, but at least I would have something, which, compared to the nothing I have right now in our wealthy US, sounds kind of like a step up to me.

Dear Socialist, get another job, pay your own way through school, save whatever's left over.... Or move to Europe and stop puking up this BS.

[oldcomputerguy]

"troubling me with respect to the direction our country is heading, namely the widening gap between rich
people and poor people. "

You are correct, the country is in fact heading in the wrong direction, regardless of the previous postings, and in some cases, rantings. The question is what if anything to do about it and why is it happening.

In the beginning things were as they are now headed, a very wide gap between rich and poor. Believe me when I tell you that all the ranters(you know who you are) would not at all like to be back in those days. They probably don't really appreciate how bad things actually were.

Then in the early part of the past century, things got so bad people were willing to put their lives on the line to start unions. Many died, killed by the very rich we now protect and idolize. For most of my life, my father was a stanuch union member and I was never one. I abhorred labor unions.
Well age does eventually bring wisdom and perspective.

Unions brought decent working conditions to this country and with them decent wages. The hours worked, benefits garnered and pensions awaited are all union derived benefits. They are the reason, we can be so pompous about our observations today. Unions made the middle class in this country .... period!

But unions became politicized, rife with freeloaders who abused the system and tried to strangle the goose. They lost support and have fallen into disfavor. With their decline, have come worse working conditions, nowhere to turn for support and declining benefits. With their decline has come the decline of the middle class. This is no idle observation but has been verified by Sindlinger and Company consumer polling. For every 3 workers that leave the middle class, one goes up and two go down. The middle class is disappearing, certainly declining. Ultimately this is not good for the country.

The ultimate answer is the resurgence of unions but that is going to be very hard. People have to be pushed to the brink and that imples bad times, worse than today but we may be getting close. There have been attempts to unionize WalMart and they have been met with firings as I recall reading in the news. Employers use overseas avenues now to avoid any hint of unions.

So where is this heading, probably worse before it gets better. The one thing that becomes clear is that the economy and the human condition run in cycles, the average is truly obtained by hitting the guardrails on either side. I suspect it will work itself out but the direction we are headed is not likely to get better before it gets worse.

[petercooper]

The ultimate answer is the resurgence of unions but that is going to be very hard. People have to be pushed to the brink and that imples bad times, worse than today but we may be getting close.

What the hell country are some of you living in?? 5.6% unemployment seems pretty low to me. There are jobs out there. People should take ANY job they can find, or 2 or yes, 3. And Unions? Unions are the problem.

[hobbes1]

The question in my mind is how do we compare with other similarly prosperous countries?

O.K. How about France? They just had a heat wave....Refresh my memory, how many people did it Kill?

15,000?????

I've also lost my job, have no health insurance, and am having to borrow $20,000/year to make my tuition payments. Now, if I were living in Europe, not only would I not be paying tuition, I would actually be receiving a modest stipend to cover my living costs while I was in school.

Your perspective is skewed, because of your position in life. As a student, borrowing 20K a year to cover tuition, you need to reflect on where you expect to be in say 10 years....

I am also a student. Except I am 40, work full time Have a stay at home mom, and 3 kids, and will leave my undergrad, without Owing a dime. Law school, will not work out that way., But I also know that because of my 4.0 GPA, and work history, If i get in and succeed in a decent Law School, I can expect almost to Double my current salary on Day 1.

than some billionaire who rakes in millions simply by clicking a button and selling a bunch of stocks.

And lastly, stop listening to your professors. That person does not exist. Most of the top 2% got there, by working longer hours (For instance, right now, my day starts at 05:30, and ends around 10pm...5 or 6 days a week...), and sweating more sweat, and taking more risks, than did those below.

Most of the people at the very top, are entrepenuers, or people who started out in a high risk/low reward ratio enterprise

And finally, a look at who supports the system tax wise...

It shows that the 32.3 percent share paid in 1996 by the top 1 percent of income earners--those with AGIs over $229,230--was considerably higher than the 25.0 percent they paid in 1986. Similarly, the 50.8 percent paid by the top 5 percent of income earners in 1996 was nine percentage points higher than the share paid by the same percentile of filers in 1986.

Likewise, in 1996, 62.4 percent of federal individual income taxes were collected from individuals in the top 10 percent of income earners, or those with incomes over $74, 481. In 1986, just over half of all federal individual income taxes were collected from filers in this percentile. Meanwhile, the top half of the income scale paid 95.7 percent of 1996's federal individual income tax burden. Those earners had AGIs of at least $23,160. In 1986, this group bore 93.4 percent of this burden.

This decade-long shift in the tax burden toward higher income earners has obviously lightened the load on lower income filers. In 1986, individuals in the lower half of income earners paid 6.6 percent of total federal individual income taxes. By 1996 this figure had dropped to just 4.3 percent.

[oldcomputerguy]

"I don't understand your comment."

Far be from me to suggest you become a lurker, that is hardly necessary.

I do not like responses that are not responses but interogations. He listed generally accepted facts, they hardly required a bibliography. He did not need to be accused of being brainwashed and coveting others goods.

He was simpy posing a philosophical question on the in creasing divide between rich and poor in this country which has in fact be documented by Sindlinger and Company, which provides consumer research to 1400 companies and several governments. I used to subscribe to it.

The middle class is declining in this country and has been for years. This does not spell properity and opportunity.

[snooker]

I hate tall people. Can we just decide to saw 6 inches off the legs of tall people, and a foot off the legs of basketball players...

[Aliska]

Does this sort of thing not bother conservatives?

Yes, but not to the point where I want to end up where they did in Communist Russia with old ladies sweeping the streets.

[alisasny]

Deluxe cable package, DVD rentals, credit card payments, ATM Fees, car payments, etc...that is why they are the "working poor"....fithy stinking rich compared to 3rd world poverty.

You left out designer nail and hairdos, tanning salon and gyms LOL Just the other day I was at the local dollar store which no doubt pays minimum wage with no benifits for part time worker. The girl behind the counter had the most elaborate nail and hair design I ever saw, she never acknowled me as a costumer, just told me how much it cost and took my money...It was apparent from her speech in that short exchange (and watching her with the other customers) that she spoke english however it was ghetto speak with attitude that I was disturbing her day. Mind you there are no ghettos around here. How this is my fault and why I need to redistribute to her is beyond me....poor hardly... bad choices indeed....

[undeniable logic]

Those numbers are exagerrated - I know you claim them to be fact and can show a ton of statistics, but consider this:

Take Bill Gates - I don't know his net worth off hand, but it is upwards of $60 billion. I think he owns around 15% of Microsoft's stock. Do you think that he could extract all of his wealth if he wanted to? What do you think his true wealth would be in actual dollars? What would Microsoft's stock do if Bill Gate's sold half of his shares, just due to the new available supply? What would Microsoft's stock do if Bill Gate's sold half os his shares, just due to investor's reactions of the primary shareholder liquidating? My point is that the wealth numbers you see are paper wealth. What's important is the actual wealth than can be used to purchase and consume products and services.

Many if not most of the richest individuals are in a similar situation. That being said, so what even if the income inequality is true to the extent you report? The wealth of the richest has been earned, if not by them, by their parents or grandparents. Their wealth is being used for research and development, paying employees, as monetary capital in the businessworld. It is also arguably the most efficient use of capital, because it is being controlled by those who are most successful.

More than anything, the ability to amass wealth provides the greatest incentive to be productive. This incentive impacts all of us from the poorest to the richest and is what has provided the environment that has allowed the US to be the greatest economic force in the world.

[metesky]

A troll. Reasonable sounding at first, but a definite socialist.

A troll is a troll.

[Proud_texan]

5.6% unemployment seems pretty low to me.

Yeah, ain't that the truth? What is it with the #$^% unmployment rate? As recent as 1999 the NAIRU was 5.7%. Now you can't find anybody who even knows what NAIRU is. Sheesh.

Sure, it's no fun to be out of a job but there's got to be some realism on the unemployment rate. Maybe because it's an election year and the media is trying to scare people from voting for Bush (it wouldn't be the first time) or because we got spoiled by 1999-2000 (which was excessive) but I'm confused, what do we expect, an unemployment rate of 2%? (Notwithstanding how any president creates a freaking job).

4% ain't gonna happen. The unemployment rates in 2000 were artifical and we paid a very heavy price for them, they are unobtainable for any extended period of time.

[undeniable logic]

As for appreciating the value of money, I can't help but feel that, if anything, the working poor in this country who often have to work multiple jobs just in order to make ends meet, would be more appreciative of the value of an earned dollar than some billionaire who rakes in millions simply by clicking a button and selling a bunch of stocks.

But the billionaire doesn't rake in millions simply by clicking a button and selling a bunch of stocks. He raked in millions by providing a product or service the people demanded. He is only accessing his millions by selling a bunch of stocks. Also most wealthy individuals (maybe not the ultra-wealthy, I don't know) didn't start that way. Many began their lives either poor or middle-class. It is in this lifestyle that they developed the appreciation for the value of a dollar, and the desire to be successful, that has brought them to their current wealth.

[Rutabega]

Hey PoliSci! I only got to post ten, but I just need to comment! I am an American living in Sweden, which is held up as the example for everyone to follow (if you want socialism, which I absolutely do NOT!). There are still homeless people here (quite a few--my husband and I call them 'Göteborg's dirty little secret')--and this to me means that they must be trying to be homeless. In Sweden, you get government money for just about everything. . .

Unless you work. Then you pay for the rest. Perhaps CEO's don't make more than 10-15% but the average worker makes WAAAAAY less than the average worker in the US. And the 'standard of living' that I hear touted so often isn't all that great. There is no chance that the average college educated person will ever make a great salary (and I am talking they won't get near $60,000/year--even with a master's degree and lots of great work experience in science, technology, engineering, or medicine.)

The unemployment is going up here because so many people opt out of working (why bother when your unemployment from the gov is comparable to working 40 hours a week?) Almost everyone I know abuses the system in some way, and most of them think that the government largesse will never run out. Medical care is horrid if you aren't going in for a routine check-up (booked two months in advance at the doctor's convenience--take the appointment or wait two more months). Emergency care is wretched (think waiting 24-30 hours in an emergency room when you are peeing blood and have a history of kidney disease).

I absolutely can't wait to come home! And for the record, I have been a single mom, used food stamps for two months myself, and with a college degree (paying loans, too!) have yet to hit $30K/year. But never for a heartbeat have I begrudged someone their money (not even Paris Hilton or Michael Moore). It's just not the American way because though it seems 'unfair' on one level that there is such a distinction between rich and poor--we are just about the only place that a person can make millions if they want to badly enough! (Which I must not!) :) (sorry about the rant!)

[MEG33]

This kind of troll,then,I don't mind.Trolls that bother me pose no intelligent questions.I enjoyed reading the answers.This poster did not hit and run,either...and said he had to go study.

It never hurts to examine why we are not socialists.

[MEG33]

Great post.Thanks

[Diddle E. Squat]

A key question to gain perspective is "How rich was Sam Walton when he started working?"

Why should it bother me that someone started out with little, was an entreprenuer who worked hard, innovated, persisted, and eventually was rewarded with a stable, ongoing business more successful than anyone could have ever dreamed?

Isn't it better to go out, work hard, and earned wealth, than to look enviously at others who are more wealthy and try to expropriate their wealth to you?

[metesky]

It never hurts to examine why we are not socialists.

True enough, and I suppose he's young enough to be educable. Maybe he'll stick around for the ride.