Author Topic: JP Morgan CEO can't explain how his low paid employee should budget her salary  (Read 39401 times)

former player

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When did we as a society decide that every job should pay enough to live on? 

In Australia, it was in 1905 when a federal law was passed ("fair and reasonable" wages for your workers, or else pay a tariff) and then in 1907 with the Harvester decision. I am sorry for the US that it is behind other countries in this respect. I suggest you write to your congressperson.


But I don't believe that every job should provide a livable wage.  I think that's silly.   I think there should be - that there are - jobs of convenience that are not important enough to the job provider to be worth that much.  And if we insist that every job should pay enough to live on, that those small jobs will simply disappear.  And that's an opportunity lost to someone somewhere who could have benefited by taking the job and making a little extra money. 

I think the problems of automation and offshoring has to be dealt with by some other means. If we eliminate all the small jobs that can at least help someone get by then we make the rest of the problem harder to solve.

This is the argument that for decades was used to pay women less than men: the man of the household brings in the "living wage", why do women need more than pin money? 

I don't know where you are getting your ideas from, but you are spouting the businessman's rhetoric from the nineteenth century.  Ideas have moved on from then, and you would do well to study some of them.

"Job A doesn't provide enough value to be worth the amount needed to provide a "living wage" to a family of 3" is absolutely nothing like "we shouldn't have to pay women decent money because their spouse makes a good amount of money". The arguments aren't even related and I can't see how anyone could possibly think they're the same.

Unfortunately the argument was used for decades to argue against women having equal pay with men.  Your disbelief in this does not negate the history.

A person should be paid what they earn, or what they and their employer agree upon for their wages. No more, no less.
As I've pointed out before, the world is not this perfect.  Exploitation and discrimination are rife, and a minimum wage protects the vulnerable and underprivileged from the sharks and the overprivileged.  It's the price of living in a civilised society.

cloudsail

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Of course everyone is born with different opportunities in life. It's much easier for some people to do well in life than others. That's the nature of the world. It's how evolution works. If nature did not reward being born with certain advantageous traits, whether in you or your parents, the human race wouldn't exist (unless you're a creationist).

Having no social safety nets led to revolutions, so most governments now try to make sure that there are systems in place to help those born in less advantageous situations. If you want to argue that the U.S. does not have enough of them, fine. There's probably room for improvement, not the least in cutting out the inefficiencies. If you believe that we should do everything we can to make sure that everyone has the exact same opportunities in life, that's just ridiculous.

Here's an example of success that a friend just told me about. A young man in her company recently got promoted to principal engineer. Very bright, motivated guy. He was born into poverty and went to a "bad" public school. He got all school fees and stuff waived throughout his education (even public schools ask for money from parents for school supplies, field trips, school teams, some California schools even ask parents to buy laptops or iPads). He also got waivers for college application fees. He applied to four UC schools and got into three of them, chose UCLA. His first day in programming class the prof immediately assigned a project and all the other kids already knew what to do. He had never taken any AP's or programming courses and had no clue what was going on. He pulled many all-nighters to catch up to his peers. And now he is a principal engineer in his twenties.

Yes, it is definitely harder to make it if you are poor. But there are support systems in place, like free education, transportation, etc. For the willing and motivated, it is definitely possible.

Oh, and the minimum wage in WA is $12/hr. In neighboring British Columbia it is $12.56 CDN.

Bloop Bloop

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I suppose it comes down to how much empathy you have for those who, through birth or circumstance, do not have, or have lost, the skills that it now takes to be competitive in this society.

In the olden days either a good brain or a good body would get you good pay. Now, for the most part, it is tending towards only the former. How much do we care about the plight of the less brainy in society?

You can talk about 'privilege' all you want but a lot of it comes down to ability and intelligence, and it's fair to say those are unequally spread.

There is a range of views - some prefer much more equality, some prefer social Darwinism, many are somewhere in-between.

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Abigail Disney speaks out against Disney CEO "insane" $65M compensation:



TempusFugit

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I suppose it comes down to how much empathy you have for those who, through birth or circumstance, do not have, or have lost, the skills that it now takes to be competitive in this society.

In the olden days either a good brain or a good body would get you good pay. Now, for the most part, it is tending towards only the former. How much do we care about the plight of the less brainy in society?

You can talk about 'privilege' all you want but a lot of it comes down to ability and intelligence, and it's fair to say those are unequally spread.

There is a range of views - some prefer much more equality, some prefer social Darwinism, many are somewhere in-between.

To be fair, just because someone is opposed to a generic minimum wage hike does not necessarily mean that they are uncaring.   We can agree that there is a problem and that some people need help without agreeing on a specific solution.  I happen to believe that a significant hike in the minimum wage would do more harm than good. 

habanero

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Norway does not (acutally contrarty to what many Norwegians believe) have a minium wage and we haven't had it for ages (if ever, not quite sure). Despite that, any "low-pay" - job here pays way more than it would in the US. The Norwegian labour market is, however, quite heavy unionized and pretty much all employer follows the results of collective bargains striked between the labour unions and the business unions. There is basically noone, especailly not the unions, who want a minimum wage to be introduced.

The fundamental problem for a labour market like the US isn't the level of or presence of a minimum wage, but the lack of significant collective bargaining power from the employees. For the middle class and below, US real wages peaked in the 70's or therabouts. That's pretty much all you need to know and to judge if a system "works" or not.

The US is also one of very few places where a large proportion of the population can expect to make less than their parents in real terms.

crybaby

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Breaking news: CEO of major company makes more money than employee with a high school degree with a low skill job.

What most people don't realize is that is a companies are forced to pay what you arbitrarily determined to be a living wage, they will simply not hire the person you are trying to help.  The person making minimum wage is better off with the minimum wage job than unemployed.


There's more breaking news, like a CEO earning more than 1000 of his employees.

Or like 10 mans in the world having as much money as 3 billions of persons.

As probably the richest country in the world, USA could have "everyone" living well, but it seems theres no problem with this huge gaps.

I live in Europe, and as you may know, here the support from the companies and government is higher. The richer, even they dont like it, pay more taxes so the poorer can achieve at least a fair life.

Yes, each time the minimum wage or the taxes raise, there's the shadow that every company will go away, but they remain.

For me its a better approach, including for the future, where machines and ultra-capitalism can turn any of us in a employee earning 7 dollars. If any of us were in that situation, maybe our opinion would be different.

Is there any worst work related issue than working full time and not having enough to live?

Just my 2 cents.
« Last Edit: April 26, 2019, 07:20:58 PM by crybaby »

Bloop Bloop

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I guess it's a choice between having higher wages for the privileged few versus having somewhat lower wages for them but better liveability for all the rest of the people in society. Different societies have a different view on which point in the continuum to aim for.

crybaby

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I guess it's a choice between having higher wages for the privileged few versus having somewhat lower wages for them but better liveability for all the rest of the people in society. Different societies have a different view on which point in the continuum to aim for.

Yes, that's it.

My vision is to have liveability for all. Sweden, Finland, Danmark, Austria, for example, are top of the society for me. They dont have anyone in the top 20 of the richest mens in the world, but they almost dont have poverty.

Having 15 of the 20 richest mens in the world in one side and 50000000 persons on poverty on the same country dont seems good for me.

Theres the old "they worked for it". But does really anyone works 1000 more than an employee? Does anyone really values 131 billions?

I value american capitalism and work ethic, but the inequality reached too far and people are suffering with that. And with this approach it will get worst: big groups will get bigger, AI will come strongly, Asia is getting huge, a new economic world crisis will come sooner or later...
« Last Edit: April 26, 2019, 08:04:06 PM by crybaby »

Simpleton

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I guess it's a choice between having higher wages for the privileged few versus having somewhat lower wages for them but better liveability for all the rest of the people in society. Different societies have a different view on which point in the continuum to aim for.

Yes, that's it.

My vision is to have liveability for all. Sweden, Finland, Danmark, Austria, for example, are top of the society for me. They dont have anyone in the top 20 of the richest mens in the world, but they almost dont have poverty.

Having 15 of the 20 richest mens in the world in one side and 50000000 persons on poverty on the same country dont seems good for me.

Theres the old "they worked for it". But does really anyone works 1000 more than an employee? Does anyone really values 131 billions?

I value american capitalism and work ethic, but the inequality reached too far and people are suffering with that. And with this approach it will get worst: big groups will get bigger, AI will come strongly, Asia is getting huge, a new economic world crisis will come sooner or later...

I mean, all of the Nordic countries do well, don't get me wrong, but I would never want to live there.

There is lots of talk about (marginally) higher median incomes and low-inequality, but if you are in the top 3/4 of the US or Canada, you are way better off to be honest.

The cost of living compared to income is insane in all of those countries.

Many of them (especially norway) are incredibly dependant on oil/gas and natural resource exporting which will all be vulnerable for a long time.

The US has some issues with wage discrepancy, and it does have a problem with a percentage of people falling through the cracks, but for the vast majority (not just the richest 15-20 people) I think the numbers would easily bear out that the standard of living is much higher in the US, and there is a much more diversified resilient economy positioned much better for the future.
« Last Edit: April 27, 2019, 04:26:19 PM by Simpleton »

gaja

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I guess it's a choice between having higher wages for the privileged few versus having somewhat lower wages for them but better liveability for all the rest of the people in society. Different societies have a different view on which point in the continuum to aim for.

Yes, that's it.

My vision is to have liveability for all. Sweden, Finland, Danmark, Austria, for example, are top of the society for me. They dont have anyone in the top 20 of the richest mens in the world, but they almost dont have poverty.

Having 15 of the 20 richest mens in the world in one side and 50000000 persons on poverty on the same country dont seems good for me.

Theres the old "they worked for it". But does really anyone works 1000 more than an employee? Does anyone really values 131 billions?

I value american capitalism and work ethic, but the inequality reached too far and people are suffering with that. And with this approach it will get worst: big groups will get bigger, AI will come strongly, Asia is getting huge, a new economic world crisis will come sooner or later...

I mean, all of the Nordic countries do well, don't get me wrong, but I would never want to live there.

There is lots of talk about (marginally) higher median incomes and low-inequality, but if you are in the top 3/4 of the US or Canada, you are way better off to be honest.

The cost of living compared to income is insane in all of those countries.

Many of them (especially norway) are incredibly dependant on oil/gas and natural resource exporting which will all be vulnerable for a long time.

The US has some issues with wage discrepancy, and it does have a problem with a percentage of people falling through the cracks, but for the vast majority (not just the richest 15-20 people) I think the numbers would easily bear out that the standard of living is much higher in the US, and there is a much more diversified resilient economy positioned much better for the future.

The Nordics is not the right place for everyone, and life here is not perfect. I'm a big fan of our wealth tax (and other taxes), but fully understand that it is a valid argument for not moving here. So is the cold, darkness, and introvert society. But I'm struggling to understand a few of your points:

1) As far as I know, only Norway (oil and fish) and the Faroes (fish) are dependent on exporting natural resources (and there are some aspects of the culture in those two countries that makes the story a bit more complex, including a big fund of FU money, high education rates, ingrained traditions for frugality, and high mobility within the Nordics). Or do you know something about Denmark, Sweden, Iceland, Finland, Åland or Greenland that I don't?

2) Standard of living being higher in the US: Yes, our highest wages are lower, and cost of living is high, especially for unhealthy stuff like alcohol, tobacco and sugar. But the fish in the sea and the berries in the forest are free, and I don't have to splurge on organic meat since all our cows have a right to soft beds and summer holidays. The environment is (mostly) clean, and I can walk whereever I want without being afraid for my safety. If I moved to the US, I can't imagine feeling my standard of living had improved because I got access to cheaper alcohol? Or is there something else I'm missing? I think I've heard foreigners complaining about nail salongs being very expensive here, along with similar "luxuries". Maybe it is my socialist upbringing (no sarcasm: walked my first Workers' Day parade at age 1) that makes me not include those types of things in my personal definition of standard of living.

I'm sure there are valid arguments on why standard of living would be better in the US, but my gut reaction to this statement is unfortunately colored by the report by the Trump administration from last year, that used the price of pickup trucks as a measurement of living standard: https://www.bloomberg.com/news/articles/2018-10-29/trump-experts-decrying-nordic-socialism-trigger-angry-response This article in english says a bit about how the report was received in Denmark https://www.bloomberg.com/news/articles/2018-10-29/trump-experts-decrying-nordic-socialism-trigger-angry-response, while this fact check (in Norwegian) goes more in detail: https://www.nrk.no/norge/det-hvite-hus-bommet-med-rapport-om-nordisk-levestandard-1.14302603

I guess it always comes back to politics and ideology. My quality of life is better when I live in a country where I pay a lot of taxes but don't have to worry about the cost of education or healthcare. A clean environment is important for me, so I think it is perfectly fine to have more than 100 % taxes on gas guzzling pickup trucks (would have preferred to ban them outright, but babysteps...). I think it is better for my society if less people smoke or drink, and fully support massive taxes on unhealthy stuff to make back some of the cost for healthcare. And I think pedicures, manicures, spas, and other types of "luxury" things are completely stupid and hate "being pampered", so I couldn't care less if it costs a lot to get those types of services (especially since the high cost is due to decent wages).

On the other hand, if freedom to control your own money is more important to you, the Nordic model simply isn't your cup of tea. And that is fine. But is that the case for 3/4 of people in the US and Canada?

Simpleton

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Gaja,

My comments were largely based upon financial considerations.

http://www.oecdbetterlifeindex.org/topics/income/

Please note these are averages, as median income for Norway is very hard to come by from my (brief) google searches. Please feel free to send some info if you find it.

In terms of income, the cost of living would further skew the numbers against norway. The financial net worth figures speak for themselves (which should be important when arguing on a site dedicated largely to financial independence).

All of these averages are achieved with lower labour force participation rates in the US/Canada as well. A lower rate is arguably a mark of a more affluent society when less people need to be working.

Furthermore my comment was also clearly qualified by stating that the top 75% (the exact percentage being an estimate - but my intent was to specify a significant majority) would be better off in a less socialized area. You will get no arguments from me that many less advantaged members of society are worse off in the US/Canada; but if we looked only at the top 75% the numbers would be MUCH further sku'd towards more capitalistic societies.

In terms of crime statistics - no contest - the US has problems. I concur this is partially a byproduct of income inequality, but probably moreso historical injustices to racial minorities.

In terms of environment - Im not really sure tbh... The same site I listed does give an edge to Norway in terms of air quality and self-reported quality of water... but I would be suprised if Norway has such a great environmental record when its so dependant on oil/gas/ocean exploitation.

« Last Edit: April 27, 2019, 09:05:17 PM by Simpleton »

Bloop Bloop

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I have no doubt that it's easier to survive and thrive in the U.S. if you are intelligent and driven. As I posted upthread, the top professionals like (senior) lawyers, surgeons, bankers and dentists earn a lot more on average in the U.S. than in Canada/Australia/UK, pay less in income tax, and pay less for most expenses - there is a reason why when you look at PPP, most countries are more expensive in the U.S.

Caring for the poor/less capable, and giving higher minimum wage jobs to those of low skill, costs money at the top end.

Hula Hoop

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In another thread, a poster is talking about someone in her old neighborhood in the US building a 7 bedroom, 7 bathroom house.  I think we can all agree that unless you have 14 kids, this is truly unnecessary, environmentally terrible and does add to anyone's happiness.  Same with the majority of large pickup trucks sold in the US.  This being MMM, I think we all agree that this kind of consumption does not add to your 'quality of life' (rather all that debt leads to stress and misery) and this kind of excessive consumption is a lot of what you have in the US that you don't have in places like Scandinavia.  I don't think anyone is going hungry, without healthcare or living on the streets in Scandinavia but no one (or almost no one) is living in a 7 bathroom house either.

marty998

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In another thread, a poster is talking about someone in her old neighborhood in the US building a 7 bedroom, 7 bathroom house.  I think we can all agree that unless you have 14 kids, this is truly unnecessary, environmentally terrible and does add to anyone's happiness.  Same with the majority of large pickup trucks sold in the US.  This being MMM, I think we all agree that this kind of consumption does not add to your 'quality of life' (rather all that debt leads to stress and misery) and this kind of excessive consumption is a lot of what you have in the US that you don't have in places like Scandinavia.  I don't think anyone is going hungry, without healthcare or living on the streets in Scandinavia but no one (or almost no one) is living in a 7 bathroom house either.

If nothing else, the owner of said 7 bedroom McMansion is providing jobs to the local construction industry.

Trickle down economics and all that etc...

Bloop Bloop

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In another thread, a poster is talking about someone in her old neighborhood in the US building a 7 bedroom, 7 bathroom house.  I think we can all agree that unless you have 14 kids, this is truly unnecessary, environmentally terrible and does add to anyone's happiness.  Same with the majority of large pickup trucks sold in the US.  This being MMM, I think we all agree that this kind of consumption does not add to your 'quality of life' (rather all that debt leads to stress and misery) and this kind of excessive consumption is a lot of what you have in the US that you don't have in places like Scandinavia.  I don't think anyone is going hungry, without healthcare or living on the streets in Scandinavia but no one (or almost no one) is living in a 7 bathroom house either.

I don't agree with this. One of my hobbies is collecting sports cars and I plan to retire by 45 with a really nice sports car collection (by really nice, I mean, low-ish 6 figures nice). No one needs this sort of consumption, but neither does anyone need a really expensive violin, painting, watch or holiday house. But one person's 'stress and misery' is another person's 'fun goal'. So I'm not sure that I agree that we should be putting caps on consumption. Hell, some people probably spend as much over their life in alcohol as what I do on my cars - everyone has their vice - let them be, says I.

former player

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In another thread, a poster is talking about someone in her old neighborhood in the US building a 7 bedroom, 7 bathroom house.  I think we can all agree that unless you have 14 kids, this is truly unnecessary, environmentally terrible and does add to anyone's happiness.  Same with the majority of large pickup trucks sold in the US.  This being MMM, I think we all agree that this kind of consumption does not add to your 'quality of life' (rather all that debt leads to stress and misery) and this kind of excessive consumption is a lot of what you have in the US that you don't have in places like Scandinavia.  I don't think anyone is going hungry, without healthcare or living on the streets in Scandinavia but no one (or almost no one) is living in a 7 bathroom house either.

I don't agree with this. One of my hobbies is collecting sports cars and I plan to retire by 45 with a really nice sports car collection (by really nice, I mean, low-ish 6 figures nice). No one needs this sort of consumption, but neither does anyone need a really expensive violin, painting, watch or holiday house. But one person's 'stress and misery' is another person's 'fun goal'. So I'm not sure that I agree that we should be putting caps on consumption. Hell, some people probably spend as much over their life in alcohol as what I do on my cars - everyone has their vice - let them be, says I.

It's not putting a cap on consumption, it's internalising the external costs through taxation.

Hula Hoop

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Bloop bloop - no one is talking about putting a cap on consumption.  I'm talking about wealthy people paying higher taxes than they do in the US - just like in Scandinavia and Australia. Maybe it will be harder for wealthy people to buy a 7 bathroom house in this system but it will also be a more pleasant society generally. For context, in the city I grew up in in the US, there are children living on the streets more or less next door to the wealthiest people on earth.  People die because they can't afford insulin and go bankrupt because they have cancer.  Cutting down slightly on conspicuous consumption through higher taxation on the super rich to alleviate these problems is only just IMO.



Bloop Bloop

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Thanks for the clarification. I have no issues with higher taxation than in the U.S. currently.

The U.S. Gini is in the low .40's; Australia's and Canada's are in the very low .30's and I believe the Nordic countries are a bit lower again. I think an ideal Gini is probably 0.35, and the only way for the US to get there is by hiking taxes on either income or wealth - which I support (to that extent).

gaja

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Gaja,

My comments were largely based upon financial considerations.

http://www.oecdbetterlifeindex.org/topics/income/

Please note these are averages, as median income for Norway is very hard to come by from my (brief) google searches. Please feel free to send some info if you find it.

In terms of income, the cost of living would further skew the numbers against norway. The financial net worth figures speak for themselves (which should be important when arguing on a site dedicated largely to financial independence).

All of these averages are achieved with lower labour force participation rates in the US/Canada as well. A lower rate is arguably a mark of a more affluent society when less people need to be working.

Furthermore my comment was also clearly qualified by stating that the top 75% (the exact percentage being an estimate - but my intent was to specify a significant majority) would be better off in a less socialized area. You will get no arguments from me that many less advantaged members of society are worse off in the US/Canada; but if we looked only at the top 75% the numbers would be MUCH further sku'd towards more capitalistic societies.

In terms of crime statistics - no contest - the US has problems. I concur this is partially a byproduct of income inequality, but probably moreso historical injustices to racial minorities.

In terms of environment - Im not really sure tbh... The same site I listed does give an edge to Norway in terms of air quality and self-reported quality of water... but I would be suprised if Norway has such a great environmental record when its so dependant on oil/gas/ocean exploitation.

I think we see the world very differently. In my mind, money is a side aspect of the MMM philosophy. In my mind, it is mainly about freedom. Living in Norway, cost of living and taxes increase my FIRE number, while healthcare costs and cost of education for my kids reduces it. Also, due to the safety net, my FU number is very low. Thanks for the link to the OECD index. It has an interesting front page, where it is possible to adjust the different parameters: http://www.oecdbetterlifeindex.org/#/11111111111

1) Median income is easy to find on wikipedia: https://en.wikipedia.org/wiki/Median_income. Here are some more details: https://www.ssb.no/en/ifhus/
2) Fascinating that you see lower employment rates as a positive thing. Here, the labour party ruled most of the time since WW2 under the slogan "Jobs for everyone". I learned in school that when more people (especially women) stay at home, it is a sign of lack of public support structure and low equality. I guess the big question is whether the statistics show people who don't need to work, or people who can't work because they have to take care of the family.
3) Environment: since our oil and gas is offshore, it doesn't effect air and drinking water. Our biggest enviromental sins (in addition to the climate footprint of fossil fuels) is from mining and how we treat the oceans. But when comparing different countries, I'm sadly not sure that the rest of the world is any better.

Adam Zapple

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Gaja,

My comments were largely based upon financial considerations.

http://www.oecdbetterlifeindex.org/topics/income/

Please note these are averages, as median income for Norway is very hard to come by from my (brief) google searches. Please feel free to send some info if you find it.

In terms of income, the cost of living would further skew the numbers against norway. The financial net worth figures speak for themselves (which should be important when arguing on a site dedicated largely to financial independence).

All of these averages are achieved with lower labour force participation rates in the US/Canada as well. A lower rate is arguably a mark of a more affluent society when less people need to be working.

Furthermore my comment was also clearly qualified by stating that the top 75% (the exact percentage being an estimate - but my intent was to specify a significant majority) would be better off in a less socialized area. You will get no arguments from me that many less advantaged members of society are worse off in the US/Canada; but if we looked only at the top 75% the numbers would be MUCH further sku'd towards more capitalistic societies.

In terms of crime statistics - no contest - the US has problems. I concur this is partially a byproduct of income inequality, but probably moreso historical injustices to racial minorities.

In terms of environment - Im not really sure tbh... The same site I listed does give an edge to Norway in terms of air quality and self-reported quality of water... but I would be suprised if Norway has such a great environmental record when its so dependant on oil/gas/ocean exploitation.

I think we see the world very differently. In my mind, money is a side aspect of the MMM philosophy. In my mind, it is mainly about freedom. Living in Norway, cost of living and taxes increase my FIRE number, while healthcare costs and cost of education for my kids reduces it. Also, due to the safety net, my FU number is very low. Thanks for the link to the OECD index. It has an interesting front page, where it is possible to adjust the different parameters: http://www.oecdbetterlifeindex.org/#/11111111111

1) Median income is easy to find on wikipedia: https://en.wikipedia.org/wiki/Median_income. Here are some more details: https://www.ssb.no/en/ifhus/
2) Fascinating that you see lower employment rates as a positive thing. Here, the labour party ruled most of the time since WW2 under the slogan "Jobs for everyone". I learned in school that when more people (especially women) stay at home, it is a sign of lack of public support structure and low equality. I guess the big question is whether the statistics show people who don't need to work, or people who can't work because they have to take care of the family.
3) Environment: since our oil and gas is offshore, it doesn't effect air and drinking water. Our biggest enviromental sins (in addition to the climate footprint of fossil fuels) is from mining and how we treat the oceans. But when comparing different countries, I'm sadly not sure that the rest of the world is any better.

In the U.S., there is a labor participation rate that is separate from the unemployment rate.  I don't know the exact parameters of the labor participation rate, but it basically concludes that a certain portion of the population has no interest in working or is unable to work.  This would include retirees, students (maybe), disabled people who cannot work etc.  I think simpleton was trying to make the point that these folks are being supported in some way, which is suggestive that there is an ample safety net in place if a nation has a lower labor participation rate.  This may be true but may also have something to do with the age composition of a particular nation as well.  I'm no expert.

gaja

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Gaja,

My comments were largely based upon financial considerations.

http://www.oecdbetterlifeindex.org/topics/income/

Please note these are averages, as median income for Norway is very hard to come by from my (brief) google searches. Please feel free to send some info if you find it.

In terms of income, the cost of living would further skew the numbers against norway. The financial net worth figures speak for themselves (which should be important when arguing on a site dedicated largely to financial independence).

All of these averages are achieved with lower labour force participation rates in the US/Canada as well. A lower rate is arguably a mark of a more affluent society when less people need to be working.

Furthermore my comment was also clearly qualified by stating that the top 75% (the exact percentage being an estimate - but my intent was to specify a significant majority) would be better off in a less socialized area. You will get no arguments from me that many less advantaged members of society are worse off in the US/Canada; but if we looked only at the top 75% the numbers would be MUCH further sku'd towards more capitalistic societies.

In terms of crime statistics - no contest - the US has problems. I concur this is partially a byproduct of income inequality, but probably moreso historical injustices to racial minorities.

In terms of environment - Im not really sure tbh... The same site I listed does give an edge to Norway in terms of air quality and self-reported quality of water... but I would be suprised if Norway has such a great environmental record when its so dependant on oil/gas/ocean exploitation.

I think we see the world very differently. In my mind, money is a side aspect of the MMM philosophy. In my mind, it is mainly about freedom. Living in Norway, cost of living and taxes increase my FIRE number, while healthcare costs and cost of education for my kids reduces it. Also, due to the safety net, my FU number is very low. Thanks for the link to the OECD index. It has an interesting front page, where it is possible to adjust the different parameters: http://www.oecdbetterlifeindex.org/#/11111111111

1) Median income is easy to find on wikipedia: https://en.wikipedia.org/wiki/Median_income. Here are some more details: https://www.ssb.no/en/ifhus/
2) Fascinating that you see lower employment rates as a positive thing. Here, the labour party ruled most of the time since WW2 under the slogan "Jobs for everyone". I learned in school that when more people (especially women) stay at home, it is a sign of lack of public support structure and low equality. I guess the big question is whether the statistics show people who don't need to work, or people who can't work because they have to take care of the family.
3) Environment: since our oil and gas is offshore, it doesn't effect air and drinking water. Our biggest enviromental sins (in addition to the climate footprint of fossil fuels) is from mining and how we treat the oceans. But when comparing different countries, I'm sadly not sure that the rest of the world is any better.

In the U.S., there is a labor participation rate that is separate from the unemployment rate.  I don't know the exact parameters of the labor participation rate, but it basically concludes that a certain portion of the population has no interest in working or is unable to work.  This would include retirees, students (maybe), disabled people who cannot work etc.  I think simpleton was trying to make the point that these folks are being supported in some way, which is suggestive that there is an ample safety net in place if a nation has a lower labor participation rate.  This may be true but may also have something to do with the age composition of a particular nation as well.  I'm no expert.

Traditionally, there are two ways to see labor participation rates; one where the goal is that a family should have the freedom to have a stay at home parent (usually the mother), and one where everyone should have the freedom to work even if they have children. In my culture, the right to work is very important. Disabled people can rely on the welfare system, but fight to get support to work because they see that as taking part in society on equal grounds with everyone else. The same goes for the feminist battles, that in the Nordic countries have centered on support systems to enable more women to work, like cheap childcare and PTO for sick children.  On the flip side, that means it is not easy being a SAHP in the Nordics.

If you look at the statistics here, you will see a large difference between labor participation between the genders in different countries: https://stats.oecd.org/index.aspx?queryid=54741

Also, to drag back a discussion from earlier: Several argued against higher wages, because that would lead to the less valuable jobs disappearing. That has already happened in the Nordics, and still we have enough jobs.

TempusFugit

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Bloop bloop - no one is talking about putting a cap on consumption.  I'm talking about wealthy people paying higher taxes than they do in the US - just like in Scandinavia and Australia. Maybe it will be harder for wealthy people to buy a 7 bathroom house in this system but it will also be a more pleasant society generally. For context, in the city I grew up in in the US, there are children living on the streets more or less next door to the wealthiest people on earth.  People die because they can't afford insulin and go bankrupt because they have cancer.  Cutting down slightly on conspicuous consumption through higher taxation on the super rich to alleviate these problems is only just IMO.


And here is where we have one of the major stumbling blocks.  Who is this super rich?  What is the threshold for wealthy people?   The notion that only the very rich would have to pay higher taxes and then we could have all the things to care for all the people is wishful thinking.  Unless the definition of super rich is something more like $150,000 than it is like $150,000,000 then the numbers dont work. 

Once you start getting down to that income level, suddenly a whole lot of people start playing the "middle class" card and crying poverty.   And it isnt entirely irrational, since a two income household can achieve those levels without being members of the elite workforce. You arent just hitting the monacle-wearing, cigar chomping CEO now; a teacher married to a police officer can reach that income. 

Its dishonest when the politicians say that if only the rich (meaning people with more money than you, dear voter) pay a fair share, that everything can be paid for.


johndoe

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Interesting viewpoints; I'm not sure people's lifetime "security vs freedom" viewpoints will shift in one thread. 

Just one thought that I hadn't seen here: it seems to me that many who lean toward "security" think those who lean toward "freedom" are heartless, callous, etc.  My upbringing, a common one in USA, teaches that the best way to truly help someone is to teach them work ethic, drive, purpose, etc.  I honestly think people who feel this think they're acting in the best interest of the "underprivileged"; The whole "teach a man to fish" mindset. 

habanero

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Social mobility is way higher in Europe than in the US. You are much more likely to experience "the American dream" in Europe than in the US. The main killer app being free higher education. In Norway, where I live, tuition is free. Everyone is entitled to a student loan to cover living costs - the loan is provided by a government institution and interest rates are quite low - around the same as for a high-quality mortgage.

If one compares especially Scandinavia to the US its a fundamentally different way to organize a socity. Each has its pros and cons. But if you are born into unfortunate cicumstances, you are much more likely to get ahead in life in Scandinavia than in the US. If you are serious wealthy, US works a lot more in your favor to preserve your wealth.

Norway, where I live, has quite high living costs (mainly a byproduct of the overall quite high salary level) but the income tax rates are not prohibitively high for ordinary to ordinary++ incomes. And you get a fairly decent ammount of dough back in terms of services provided for the tax money you pay. The average Norwegian worker pays net negative taxes - meaning that the value of servies provided to you over your lifetime is lower than the amount of taxes you pay. Its one of very few places where an ordinary  full-time-worker actually is a net financial burden to society.
« Last Edit: April 28, 2019, 12:13:17 PM by habaneroNorway »

habanero

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Actual vs perceived social mobility in various countries:


cloudsail

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https://www.huffingtonpost.ca/2019/04/26/nova-scotia-cancer-video_a_23717905/

It's important to keep in mind that there are problems with any system. I am familiar with Canada but not with Europe, so can't really speak to any issues there. Wait times for medical treatment is definitely something even Canadians in major cities worry about.

EscapeVelocity2020

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The part that drives me a bit nuts is how Americans are hung up in the past.  Many folks DO think that the American dream is still real.  Sure, for immigrants that come to the US, you can go from rags to a pretty good quality of life comparatively, but for Americans that are poor, there is very little social mobility, especially if you want to stay near family.  The reality for Americans is that the lower class goes from living on the edge to either rags or, at best, status quo and the upper class goes from incredible riches to even more incredible riches.  Those in the 'middle' just kind of bounce around the upper and lower limits.  Trump seized on this sense of hopelessness by appealing to the middle and lower classes hoping social mobility would come back.  What a crock... oops, I mean crook...   

Simpleton

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To be honest I do not even agree with the notion that the rich do not pay enough taxes.

In the US - the top 1% pay over 37% of all income tax, while accounting for only 19% of all income. The number is debatable but no matter if the number is 27%, 37%, or 47% you will have a bunch of people saying its too much, and a bunch of people saying its too little.

The top 10% of income filers pay 68%.

The bottom 50% pay only 3% of all income tax.

Personally I am in favor of a flat tax so that everyone has skin in the game. Everyone pays an equal share of income. It is a big problem when almost 50% of the population pays 0 effective tax after transfers. Of course they will ALWAYS vote for more spending.

The big different between Nordic countries and America is not brackets at the top (which are very comparable - at least in high tax states), its that Nordic countries tax the middle class MUCH more, and have way more sales taxes and consumption taxes.

https://taxfoundation.org/summary-latest-federal-income-tax-data-2018-update/
« Last Edit: April 28, 2019, 05:45:44 PM by Simpleton »

Simpleton

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Another great article which I found is this one:

http://mentalfloss.com/article/545658/map-shows-average-take-home-pay-around-world

The average US family could spend for example $30,000 annually to cover things like education and healthcare and still be left with an equal after tax income comparable to a Swedish family.

Bloop Bloop

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To be honest I do not even agree with the notion that the rich do not pay enough taxes.

In the US - the top 1% pay over 37% of all income tax, while accounting for only 19% of all income. The number is debatable but no matter if the number is 27%, 37%, or 47% you will have a bunch of people saying its too much, and a bunch of people saying its too little.

The top 10% of income filers pay 68%.

The bottom 50% pay only 3% of all income tax.

Personally I am in favor of a flat tax so that everyone has skin in the game. Everyone pays an equal share of income. It is a big problem when almost 50% of the population pays 0 effective tax after transfers. Of course they will ALWAYS vote for more spending.

The big different between Nordic countries and America is not brackets at the top (which are very comparable - at least in high tax states), its that Nordic countries tax the middle class MUCH more, and have way more sales taxes and consumption taxes.

https://taxfoundation.org/summary-latest-federal-income-tax-data-2018-update/

Here, here.

Kyle Schuant

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My upbringing, a common one in USA, teaches that the best way to truly help someone is to teach them work ethic, drive, purpose, etc.  I honestly think people who feel this think they're acting in the best interest of the "underprivileged"; The whole "teach a man to fish" mindset. 
The problem is that it's no use teaching a man to fish if the company you own has polluted the river and killed all the fish.

This is the issue in the modern West: by means of economic rationalism and free trade, we have greatly reduced job opportunities for low-skilled workers. We've eliminated those jobs or sent them overseas. "Get more skills!" Sure - but the country only needs so many accountants and lawyers and so on.

Our governments and corporations have created the conditions in which low-skilled workers have fewer job opportunities. You cannot fire a person and then berate him for being unemployed.

Bloop Bloop

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Kyle, you are correct. We have mechanised, automated or outsourced a lot of low-skilled labour and most of the profit of that has gone to corporations.

I think there is an argument that corporations ought to pay slightly more tax on profits. It would reduce the income tax of high-earners who unfortunately do so much lifting right now. (The fact that your friendly neighbourhood surgeon pays a much higher tax rate than, say, Google or Amazon, is ridiculous.)

Simpleton

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My upbringing, a common one in USA, teaches that the best way to truly help someone is to teach them work ethic, drive, purpose, etc.  I honestly think people who feel this think they're acting in the best interest of the "underprivileged"; The whole "teach a man to fish" mindset. 
The problem is that it's no use teaching a man to fish if the company you own has polluted the river and killed all the fish.

This is the issue in the modern West: by means of economic rationalism and free trade, we have greatly reduced job opportunities for low-skilled workers. We've eliminated those jobs or sent them overseas. "Get more skills!" Sure - but the country only needs so many accountants and lawyers and so on.

Our governments and corporations have created the conditions in which low-skilled workers have fewer job opportunities. You cannot fire a person and then berate him for being unemployed.

This line of reasoning is a total fabrication though. The US unemployment rate is at 3.7% arguably the lowest its been in over 50 years. There are more jobs today than there have ever been in the history of the country. The unemployment rate is incredibly low by international standards as well. If you want a job the in the US - the vast majority of people will be able to find one.


Bloop Bloop

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I think the gist of the argument is that the unemployment rate hides things like precarious employment and very poorly paid employment.

In most people's view, a job (even a crap one) ought to pay well enough to prevent a worker from starving or lacking basic clothes and shelter.

Beyond that, some people think that jobs ought to provide a living wage or full participation in the community etc etc. Others do not believe that any such entitlements should be afforded as of right.

My view is that a full-time job ought to provide a very meagre level of sustenance. I think the Australian min wage is too high (and therefore discourages work at the bottom end) and the U.S. min wage in most states is too low.

habanero

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Personally I am in favor of a flat tax so that everyone has skin in the game. Everyone pays an equal share of income. It is a big problem when almost 50% of the population pays 0 effective tax after transfers. Of course they will ALWAYS vote for more spending.

The problem with a flat tax rate is that for the tax revenue to stay the same, the tax rate would need to be significantly higher for lower incomes. A tax system generally has some redistributive properties (more so in say Scandinavia than most places). In Norway there is a fairly large deductible - if you make say $40k pr year, you pay no taxes and no social security on the first 12k you make. Hence the effective tax rate for low incomes is quite low.

Until quite recently - VAT (sales tax) was actually a higher source of revenue for the Norwegian government than income tax from individuals. High sales taxes - which are quite common in Europe (25% on most stuff in Norway) is effectively a regressive way of taxation as everyone has the same basic needs regardless of income so it's rather hard to not pay a siginificant ammount sales tax.

Fishindude

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Up through 2017 I ran a contracting company with about 65 employees.    We were always short handed on help because we couldn't hire and keep decent help, yet we started them out at a wage better than just about anyplace else in the county, and given a few years of reliable attendance and learning some skills one could easily work themselves up to a wage better than just about anyplace else around.   We also had a good retirement savings plan with company match, good health insurance, paid vacations and holidays, a wellness program, many programs to get employees and their families involved in the community, etc., also offered a lot of overtime and some have company vehicles. 

To get a shot at a job you had to be drug free, reasonably presentable, had to get to work every day, and the skills were trained on the job.   I can't tell you how many people would wash out in first thirty days or less due to getting popped on a drug test, attendance, or just quitting because it just wasn't their thing.    There is a reason you hear people gripe and say "nobody wants to work anymore".   I've seen it first hand.   A little physical work, getting up early, getting a little dirty at their job, working a few long days or occasional weekend seems to be beneath a whole lot of people out there.   They'd rather sling burgers at MacDonalds and gripe about being poor, than put in a little effort to better themselves.

This story is not made up.   The average trades person now in America is in their 50's and rapidly approaching retirement age.   Nearly all of the skilled trades jobs are starving for entry level help, but the jobs go unfilled.   Plenty of good work out there for anybody that wants it.


Parizade

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Social mobility is way higher in Europe than in the US. You are much more likely to experience "the American dream" in Europe than in the US. The main killer app being free higher education. In Norway, where I live, tuition is free. Everyone is entitled to a student loan to cover living costs - the loan is provided by a government institution and interest rates are quite low - around the same as for a high-quality mortgage.

If one compares especially Scandinavia to the US its a fundamentally different way to organize a socity. Each has its pros and cons. But if you are born into unfortunate cicumstances, you are much more likely to get ahead in life in Scandinavia than in the US. If you are serious wealthy, US works a lot more in your favor to preserve your wealth.

@habaneroNorway, your post highlights my main discomfort with raising the minimum wage. Paying unskilled workers a little more doesn't address the lack of affordable housing and childcare, or the high cost of education and healthcare. I fear it might actually make those problems worse through inflation. We have to find a new way to organize our society to address these core issues.

Those of us who participate in this forum spend quite a lot of time discussing how to optimize our budgets for these essentials, low skilled workers may not have the time or intellectual resources to do the same. So maybe it's up to us to find a creative solution (after we wipe out malaria of course).
« Last Edit: April 29, 2019, 07:45:11 AM by Parizade »

habanero

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Its one thing to live frugally by choice and saving a large part of income vs living frugally because you don't have any alternative. If you have a decent stash, then pretty much any unforseen expense is sth that is handled with ease, just use some of the EF or put a little less towards saving that month. It's vastly different for someone who has very little to no slack in the monthly budget - then money is a constant source for worry - not something one happily watches grow over time.

The effect of rising pay by just a small ammount is massive. Its much better for health than any medicine invented.

This one is very good:
https://www.nytimes.com/interactive/2019/02/21/magazine/minimum-wage-saving-lives.html

A $15 minimum wage is an antidepressant. It is a sleep aid. A diet. A stress reliever. It is a contraceptive, preventing teenage pregnancy. It prevents premature death. It shields children from neglect. But why? Poverty can be unrelenting, shame-inducing and exhausting. When people live so close to the bone, a small setback can quickly spiral into a major trauma. Being a few days behind on the rent can trigger a hefty late fee, which can lead to an eviction and homelessness. An unpaid traffic ticket can lead to a suspended license, which can cause people to lose their only means of transportation to work. In the same way, modest wage increases have a profound impact on people’s well-being and happiness. Poverty will never be ameliorated on the cheap. But this truth should not prevent us from acknowledging how powerfully workers respond to relatively small income boosts.

“When the minimum wage goes up, I see it,” says Dr. Margot Kushel, who directs the University of California, San Francisco Center for Vulnerable Populations, which is based in a local hospital. San Francisco and surrounding cities raised the minimum wage to $15 an hour last July. When Kushel’s patients have a bit more money in their pockets, “they exercise more. They are less stressed and can quit smoking. Their mental health improves pretty dramatically. Their sleep gets better. And people start eating healthier almost immediately.” Kushel continued: “We will spend an incredible amount on a new heart drug. But if we increased wages by $1, we’d save more lives.”

GuitarStv

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Bloop bloop - no one is talking about putting a cap on consumption.  I'm talking about wealthy people paying higher taxes than they do in the US - just like in Scandinavia and Australia. Maybe it will be harder for wealthy people to buy a 7 bathroom house in this system but it will also be a more pleasant society generally. For context, in the city I grew up in in the US, there are children living on the streets more or less next door to the wealthiest people on earth.  People die because they can't afford insulin and go bankrupt because they have cancer.  Cutting down slightly on conspicuous consumption through higher taxation on the super rich to alleviate these problems is only just IMO.


And here is where we have one of the major stumbling blocks.  Who is this super rich?  What is the threshold for wealthy people?   The notion that only the very rich would have to pay higher taxes and then we could have all the things to care for all the people is wishful thinking.  Unless the definition of super rich is something more like $150,000 than it is like $150,000,000 then the numbers dont work. 

Once you start getting down to that income level, suddenly a whole lot of people start playing the "middle class" card and crying poverty.   And it isnt entirely irrational, since a two income household can achieve those levels without being members of the elite workforce. You arent just hitting the monacle-wearing, cigar chomping CEO now; a teacher married to a police officer can reach that income. 

Its dishonest when the politicians say that if only the rich (meaning people with more money than you, dear voter) pay a fair share, that everything can be paid for.

Individual income of more than 500,000 dollars a year leaves a very safe margin for the definition of super wealthy.

99.3% of people don't make that in a year . . . and have no reasonable hope of ever getting to that level.  Yet more than a million Americans are above that level (https://www.politico.com/story/2011/08/irs-235-413-million-dollar-earners-060717), so there's plenty of income to tax.

wageslave23

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I haven't read all of the comments, so someone might have already said this.  But the gist of what I'm reading is that most people believe that it would be better if the poorest people in the US had a little more and the richest people in the US had a little less.  Almost no one except for sociopaths disagrees that it would be better to not have someone dying of starvation if all it means is someone else giving from their excess.  That's not what's being argued.  Here are two dissenting arguments:

Two people are stranded on an island with tons of coconut trees. Person A works all day finding and picking coconuts.  He even devises a tool that will help him pick and process the coconuts.  It even becomes a game for him because he can process more than he can even eat.  Person B is upset that they are stranded, he refuses to do any work because he thinks their situation is unfair.  Person A tells Person B that he will give him just enough coconuts to live if he works 8 hours a day because he doesn't want to see him starve.  Person B does just the minimum to make it look like he is working in order to get the coconuts from A, but mostly spends his time lounging around and drinking.  Person A knows this and follows through on his agreement but is unwilling to give him more than agreed upon.  He would rather throw the coconuts away than reward Person B with his excesses. 

Scenario 2 is there are 100 people stranded on the island.  There is one person (person A) who is amazing at picking coconuts.  He can pick 200 a day, more than all of the island needs but he has to work 10 hr days to do it.  No one else on the island can pick more than 1.  Some can pick none.   Everyone gets together and says person A should share with everyone else.  He agrees and gives away 150 of his coconuts.  Then a few weeks later, the island people demand that he gives away 195 of his coconuts.  Person A says to himself, why am I killing myself working 10 hr days just to give it all away.  I will start only working 5 minutes a day and pick just enough coconuts for myself since I have to give any excess away anyways.  The other island people starve and die. 

These are simple and extreme examples but some of the concerns with wealth redistribution.  If it was as simple as just taking some excess money and giving it to those in need, there wouldn't be a debate.  But it might be best for the economy and everyone in the country to let the producers hang on to more of their money in order to incentivize production.  In other words even the lower class might be better off than they would be in a more evenly distributed economy.  The quality of life of our poor generally is better than the poor of most of the world.  Our rich are just richer than the rich of the rest of the world.  It would be silly to make everyone more poor just so their isn't as big of a wealth gap.

GuitarStv

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I haven't read all of the comments, so someone might have already said this.  But the gist of what I'm reading is that most people believe that it would be better if the poorest people in the US had a little more and the richest people in the US had a little less.  Almost no one except for sociopaths disagrees that it would be better to not have someone dying of starvation if all it means is someone else giving from their excess.  That's not what's being argued.  Here are two dissenting arguments:

Two people are stranded on an island with tons of coconut trees. Person A works all day finding and picking coconuts.  He even devises a tool that will help him pick and process the coconuts.  It even becomes a game for him because he can process more than he can even eat.  Person B is upset that they are stranded, he refuses to do any work because he thinks their situation is unfair.  Person A tells Person B that he will give him just enough coconuts to live if he works 8 hours a day because he doesn't want to see him starve.  Person B does just the minimum to make it look like he is working in order to get the coconuts from A, but mostly spends his time lounging around and drinking.  Person A knows this and follows through on his agreement but is unwilling to give him more than agreed upon.  He would rather throw the coconuts away than reward Person B with his excesses. 

Scenario 2 is there are 100 people stranded on the island.  There is one person (person A) who is amazing at picking coconuts.  He can pick 200 a day, more than all of the island needs but he has to work 10 hr days to do it.  No one else on the island can pick more than 1.  Some can pick none.   Everyone gets together and says person A should share with everyone else.  He agrees and gives away 150 of his coconuts.  Then a few weeks later, the island people demand that he gives away 195 of his coconuts.  Person A says to himself, why am I killing myself working 10 hr days just to give it all away.  I will start only working 5 minutes a day and pick just enough coconuts for myself since I have to give any excess away anyways.  The other island people starve and die. 

These are simple and extreme examples but some of the concerns with wealth redistribution.  If it was as simple as just taking some excess money and giving it to those in need, there wouldn't be a debate.  But it might be best for the economy and everyone in the country to let the producers hang on to more of their money in order to incentivize production.  In other words even the lower class might be better off than they would be in a more evenly distributed economy.  The quality of life of our poor generally is better than the poor of most of the world.  Our rich are just richer than the rich of the rest of the world.  It would be silly to make everyone more poor just so their isn't as big of a wealth gap.

Scenario 3 - Two people are stranded on an island with tons of coconut trees. Person A works all day finding and picking coconuts.  He even devises a tool that will help him pick and process the coconuts.  It even becomes a game for him because he can process more than he can even eat.  Person B is upset that they are stranded, he refuses to do any work because he thinks their situation is unfair.  Person A tells Person B that he will give him just enough coconuts to live if he works 8 hours a day because he doesn't want to see him starve.  Person B does just the minimum to make it look like he is working in order to get the coconuts from A, but mostly spends his time lounging around and drinking.  Person A knows this and follows through on his agreement but is unwilling to give him more than agreed upon.  He would rather throw the coconuts away than reward Person B with his excesses.

Person B gets tired of Person A and kills him, taking all the coconuts along with the coconut picking tool.


Scenario 4 - There are 100 people stranded on an island.  One of them had a father who bought the island years ago before dying.  Since he therefore owns all the land and the coconuts on island, this person tells the 30 strongest people to be his security force, promising them coconuts as pay.  He uses the security force to make the 50 people he likes the least to pick coconuts all day (for every 10 coconuts picked, they get to keep 1).  He pays the 20 women he likes the most to be servants and sex workers from the coconuts that he didn't work for.

This system goes on for a while until there's a bad coconut season because of over-harvesting.  When the security force comes to take the few coconuts that there are away, there's a revolt.  All 30 of the security force and 40 of the coconut pickers die.  The owner of the island is beaten to death with coconuts gleefully by the members of his harem and servants.



Hopefully, these scenarios show the ridiculousness of assuming that the hardest worker will always win.  In reality there are many extremely hard working people who never get out of low paying jobs . . . and relatively useless people who are born into wealth, have every mistake paid for by their dad, and eventually become the president of the United States.

EscapeVelocity2020

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-snip-
...Person B does just the minimum to make it look like he is working in order to get the coconuts from A, but mostly spends his time lounging around and drinking.  Person A knows this and follows through on his agreement but is unwilling to give him more than agreed upon.  He would rather throw the coconuts away than reward Person B with his excesses. 

Scenario 2 is there are 100 people stranded on the island.  There is one person (person A) who is amazing at picking coconuts.  He can pick 200 a day, more than all of the island needs but he has to work 10 hr days to do it.  No one else on the island can pick more than 1.  Some can pick none.   Everyone gets together and says person A should share with everyone else.  He agrees and gives away 150 of his coconuts.  Then a few weeks later, the island people demand that he gives away 195 of his coconuts.  Person A says to himself, why am I killing myself working 10 hr days just to give it all away.  I will start only working 5 minutes a day and pick just enough coconuts for myself since I have to give any excess away anyways.  The other island people starve and die.

Why did I spend all that time reading Atlas Shrugged when I could've just read this?  Glad it's all settled now, just like when Ayn Rand made the same arguments in 1957.  Hope the billionaires don't jet off to an undetectable valley of Eden where they can enjoy their self-sufficient abundance, since we useless masses treat them so poorly in the US.

wageslave23

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I haven't read all of the comments, so someone might have already said this.  But the gist of what I'm reading is that most people believe that it would be better if the poorest people in the US had a little more and the richest people in the US had a little less.  Almost no one except for sociopaths disagrees that it would be better to not have someone dying of starvation if all it means is someone else giving from their excess.  That's not what's being argued.  Here are two dissenting arguments:

Two people are stranded on an island with tons of coconut trees. Person A works all day finding and picking coconuts.  He even devises a tool that will help him pick and process the coconuts.  It even becomes a game for him because he can process more than he can even eat.  Person B is upset that they are stranded, he refuses to do any work because he thinks their situation is unfair.  Person A tells Person B that he will give him just enough coconuts to live if he works 8 hours a day because he doesn't want to see him starve.  Person B does just the minimum to make it look like he is working in order to get the coconuts from A, but mostly spends his time lounging around and drinking.  Person A knows this and follows through on his agreement but is unwilling to give him more than agreed upon.  He would rather throw the coconuts away than reward Person B with his excesses. 

Scenario 2 is there are 100 people stranded on the island.  There is one person (person A) who is amazing at picking coconuts.  He can pick 200 a day, more than all of the island needs but he has to work 10 hr days to do it.  No one else on the island can pick more than 1.  Some can pick none.   Everyone gets together and says person A should share with everyone else.  He agrees and gives away 150 of his coconuts.  Then a few weeks later, the island people demand that he gives away 195 of his coconuts.  Person A says to himself, why am I killing myself working 10 hr days just to give it all away.  I will start only working 5 minutes a day and pick just enough coconuts for myself since I have to give any excess away anyways.  The other island people starve and die. 

These are simple and extreme examples but some of the concerns with wealth redistribution.  If it was as simple as just taking some excess money and giving it to those in need, there wouldn't be a debate.  But it might be best for the economy and everyone in the country to let the producers hang on to more of their money in order to incentivize production.  In other words even the lower class might be better off than they would be in a more evenly distributed economy.  The quality of life of our poor generally is better than the poor of most of the world.  Our rich are just richer than the rich of the rest of the world.  It would be silly to make everyone more poor just so their isn't as big of a wealth gap.

Scenario 3 - Two people are stranded on an island with tons of coconut trees. Person A works all day finding and picking coconuts.  He even devises a tool that will help him pick and process the coconuts.  It even becomes a game for him because he can process more than he can even eat.  Person B is upset that they are stranded, he refuses to do any work because he thinks their situation is unfair.  Person A tells Person B that he will give him just enough coconuts to live if he works 8 hours a day because he doesn't want to see him starve.  Person B does just the minimum to make it look like he is working in order to get the coconuts from A, but mostly spends his time lounging around and drinking.  Person A knows this and follows through on his agreement but is unwilling to give him more than agreed upon.  He would rather throw the coconuts away than reward Person B with his excesses.

Person B gets tired of Person A and kills him, taking all the coconuts along with the coconut picking tool.


Scenario 4 - There are 100 people stranded on an island.  One of them had a father who bought the island years ago before dying.  Since he therefore owns all the land and the coconuts on island, this person tells the 30 strongest people to be his security force, promising them coconuts as pay.  He uses the security force to make the 50 people he likes the least to pick coconuts all day (for every 10 coconuts picked, they get to keep 1).  He pays the 20 women he likes the most to be servants and sex workers from the coconuts that he didn't work for.

This system goes on for a while until there's a bad coconut season because of over-harvesting.  When the security force comes to take the few coconuts that there are away, there's a revolt.  All 30 of the security force and 40 of the coconut pickers die.  The owner of the island is beaten to death with coconuts gleefully by the members of his harem and servants.



Hopefully, these scenarios show the ridiculousness of assuming that the hardest worker will always win.  In reality there are many extremely hard working people who never get out of low paying jobs . . . and relatively useless people who are born into wealth, have every mistake paid for by their dad, and eventually become the president of the United States.

Yep, not arguing that there aren't other ways to frame wealth inequality.  Just pointing out some of the arguments of people who are not in favor of more wealth redistribution.  Hopefully this focuses the discussion on which framework most accurately describes reality, instead of assuming that people who are against redistribution are just selfish and hate poor people.

Bloop Bloop

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In the coconut example, the clever capitalist would pay his worker just enough coconuts to ensure a meagre living, and then supply enough base forms of media (TV, bread and circuses) to prevent a revolution.

I mean, look at the U.S. right now. It's not like the working class is up in arms over anything - other than the usual racist stuff. They aren't clamouring for revolution.

As for the min wage argument, as I've said many times, the trouble with increasing min wage is that it devalues the work of everyone else. There are obvious humanitarian reasons to do it, but there are efficiency reasons not to do it. To give a related example, the Australian government used to spend hundreds of millions of dollars propping up our car industry. The subsidy came out to something like $80,000 per worker per year. It was ridiculous. The government (used to) justified this on the grounds that the workers were better off with jobs than without. But then everyone else is slightly worse off because they are collectively paying a bit more tax each. Personally, I would empathise with the public taxpayer rather than the subsidised worker.

Min wage works the same way. We are subsidising those whose skillsets aren't up to scratch. I'm not arguing for the abolition of a min wage, but I'm saying that you have to be careful not to be too generous.

mm1970

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My upbringing, a common one in USA, teaches that the best way to truly help someone is to teach them work ethic, drive, purpose, etc.  I honestly think people who feel this think they're acting in the best interest of the "underprivileged"; The whole "teach a man to fish" mindset. 
The problem is that it's no use teaching a man to fish if the company you own has polluted the river and killed all the fish.

This is the issue in the modern West: by means of economic rationalism and free trade, we have greatly reduced job opportunities for low-skilled workers. We've eliminated those jobs or sent them overseas. "Get more skills!" Sure - but the country only needs so many accountants and lawyers and so on.

Our governments and corporations have created the conditions in which low-skilled workers have fewer job opportunities. You cannot fire a person and then berate him for being unemployed.
I was going to say something similar, but you said it better.

Also: the two aren't mutually exclusive.  We can "teach a man to fish" and have a strong social safety net.  We can expect people to work and also subsidize education, health care, and child care.  In fact, I would argue that on some face it encourages working.  If you know you are guaranteed health care no matter what job you have, you can afford child care, and if you get decent grades you can further your education - it gives you far more hope.

I find it...odd and disturbing the comments that I read here about "bettering yourself" and "teaching a man to fish".  I sometimes hear this in real life too.  So, is it just my bubble?  When did "working hard at a job, any job" become something shameful.  I grew up rural, and there was nothing shameful about working at a glass plant, building trailers, cleaning toilets, stocking shelves, digging ditches.  Being lazy was shameful but working hard at what you did was something to be proud of.  (My dad was blue collar, as are many of my siblings and their spouses).  Is it just my new bubble?

If "teaching a man to fish" means someone is working multiple hard (but low paying jobs) to eke together a life of poverty where you cannot afford to see a dentist, and die if you get cancer ... then I want nothing of it.

Bloop Bloop

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I don't think 'bettering yourself' is meant to denigrate "blue collar" jobs at all - I don't make any distinction between blue collar and white collar, and many blue collar jobs (e.g. jobs on offshore oil rigs) pay astoundingly well. More power to those workers!

In fact, one of the things that annoys me about my own country is that there are a lot of jobs that pay $18/hour for fruit picking, toilet cleaning, sweeping floors etc and no one wants those because they don't lead to a professional career. Well, as you say, working hard is something to be proud of, and you have to start somewhere.

EscapeVelocity2020

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Yep, not arguing that there aren't other ways to frame wealth inequality.  Just pointing out some of the arguments of people who are not in favor of more wealth redistribution.  Hopefully this focuses the discussion on which framework most accurately describes reality, instead of assuming that people who are against redistribution are just selfish and hate poor people.

I'm not sure how we got to this strawman argument.  The outcome, coconut economy or not, should be for everyone to work together to ensure enough for the folks at the bottom and sufficient rewards for those at the top to flourish.  No system is perfect, Socialism provides a safety net for the most needy as well as social mobility for those who start out disadvantaged but are willing to take advantage of programs in order to better their circumstances.  Pure capitalism provides incentive to out-compete and, given something like the 'invisible hand' means that society gains from economic pie growing for everyone.  America has a fluid system that has skewed more and more toward Capitalism and Europe has a more Socialistic system with some amount of Capitalism.  Neither system is perfect for everyone all the time. 

But let's stop this 'rich people are treated so poorly and are so misunderstood' business.  They can always pull a Bill Gates or Warren Buffett and give away their wealth if they want to be loved, and still have plenty left over for themselves.  I really do struggle to buy in to any argument that the billionaires are treated unfairly in the US.

GuitarStv

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But let's stop this 'rich people are treated so poorly and are so misunderstood' business.  They can always pull a Bill Gates or Warren Buffett and give away their wealth if they want to be loved, and still have plenty left over for themselves.  I really do struggle to buy in to any argument that the billionaires are treated unfairly in the US.

This is a very important point.  Being rich comes with ridiculous benefits . . . one of which is that you can effortlessly give away your riches and become poor at any moment of the day.  That's quite a different situation from the one that poor people find themselves in.

habanero

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The US ranks 10th in the world in billionaires per capita (as a fun fact both Norway (8th) and Sweden (6th) rank above). However, the scandinavian billionaires have far fewer billions than the wealthiest persons in the US.