Author Topic: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide  (Read 814 times)

blackomen

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https://www.collaborativefund.com/blog/how-this-all-happened/

Interesting read, still digesting it as I speak.

However, if I understand his main idea correctly, that the current income inequality is due to the keeping up with the Jones phenomenon and going into debt, then having more people pursuing a Mustachian lifestyle can work towards reversing this trend.

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bacchi

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Re: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide
« Reply #1 on: December 29, 2018, 02:35:28 PM »
Income inequality will continue because more and more jobs need degrees and the well-paying manufacturing jobs are robot-ed. The top 1% get raises while the bottom 40% see their wages stagnate.

If people learn to live below their means, it would lead to less anger and discontent and, perhaps, real solutions to the inequality problem.


gentmach

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Re: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide
« Reply #2 on: December 30, 2018, 10:16:17 AM »
https://www.collaborativefund.com/blog/how-this-all-happened/

Interesting read, still digesting it as I speak.

However, if I understand his main idea correctly, that the current income inequality is due to the keeping up with the Jones phenomenon and going into debt, then having more people pursuing a Mustachian lifestyle can work towards reversing this trend.

Sent from my LGUS997 using Tapatalk



Yes. It essentially comes down to our cultures view of success. You aren't successful unless you have the significant other, two kids, 3 bedroom house, two cars parked in the driveway because the garage is overflowing with stuff.

Mustachians know that isn't the path to happiness. That cultural more was ground into our heads by the media, advertising and everyone around us.

Income inequality has two parts. One is unfair wages. The other is people making proper choices regarding money.

maizeman

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Re: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide
« Reply #3 on: December 30, 2018, 10:47:19 AM »
Income inequality will continue because more and more jobs need degrees and the well-paying manufacturing jobs are robot-ed. The top 1% get raises while the bottom 40% see their wages stagnate.

+1

Robots, the internet, and computers themselves means that the potential economic impact of people with rare or unique skills are growing, increasing their ability to demand and receive higher wages.

At the same time, on the lower end, a lot of jobs still exist ONLY because it is currently cheaper to hire a human being than to introduce automation. So people are left with either stagnant wages (which sucks) or finding ways to drive up wages which leads to their jobs going away (which also sucks).

To the extent mustachians mean a higher national savings rate and hence an overall lower cost of capital for businesses which makes the trade off between buying a $200k robot and hiring a human at $30k/year more favorable to the robot, we may actually be making things worse on the income inequality front. However, I think there aren't actually enough of us to move the needle in any quantifiable way.

blackomen

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Re: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide
« Reply #4 on: December 30, 2018, 11:54:18 AM »
Income inequality will continue because more and more jobs need degrees and the well-paying manufacturing jobs are robot-ed. The top 1% get raises while the bottom 40% see their wages stagnate.

+1

Robots, the internet, and computers themselves means that the potential economic impact of people with rare or unique skills are growing, increasing their ability to demand and receive higher wages.

At the same time, on the lower end, a lot of jobs still exist ONLY because it is currently cheaper to hire a human being than to introduce automation. So people are left with either stagnant wages (which sucks) or finding ways to drive up wages which leads to their jobs going away (which also sucks).

To the extent mustachians mean a higher national savings rate and hence an overall lower cost of capital for businesses which makes the trade off between buying a $200k robot and hiring a human at $30k/year more favorable to the robot, we may actually be making things worse on the income inequality front. However, I think there aren't actually enough of us to move the needle in any quantifiable way.

Never thought of it that way, thanks for your viewpoint.  However, I'd also argue that more people doing FIRE will also decrease the supply of people available for work, pushing up the wages of the people who want to work..  not sure if that's enough to counteract the "lower cost of capital for businesses".

maizeman

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Re: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide
« Reply #5 on: December 30, 2018, 01:41:35 PM »
If enough people FIREd, yes I agree with you that'd start to drive up salaries for the folks who remained in the workforce. In order for that to be noticeable, I suspect that'd require an even greater adoption than the level of adoption required for us to influence the national savings rate.

Right now americans as a whole have a savings rate of ~2%. So even one person out of 100 goes from saving 2% to saving 60%, that'd increase our average savings rate to ~2.6%.

The other issue is that folks with higher incomes will work fewer years before FIREing, so if enough of us were dropping out of the labor force to make a difference, the effect would be felt most strongly for occupations which already have higher pay and less strongly for occupations with low pay. (If fact, if you believe the folks who talk about "barista FIRE" you might actually see an INCREASE in the labor force for causal unskilled labor.)

Chris22

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Re: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide
« Reply #6 on: December 31, 2018, 11:17:35 AM »
Income inequality has two parts. One is unfair wages. The other is people making proper choices regarding money.

No.  Wealth inequality has two parts.  Income inequality just has to do with income.  I can't save my way out of an artificially low salary, if one believes it exists. 

gentmach

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Re: If this guy is right, Mustachians are key to reducing our Rich-Poor Divide
« Reply #7 on: December 31, 2018, 08:10:01 PM »
Income inequality has two parts. One is unfair wages. The other is people making proper choices regarding money.

No.  Wealth inequality has two parts.  Income inequality just has to do with income.  I can't save my way out of an artificially low salary, if one believes it exists.

Yes. Wealth. I got a little ahead of myself.