Income Inequality in America

http://www.cnn.com/2013/10/29/opinion/sutter-lake-providence-income-inequality/index.html?hpt=hp_t1

Since the late 1970s, the gap between rich and poor has widened to Grand Canyon proportions -- pushing America toward a two-class society. People have a harder time getting ahead now than at any time since the Great Depression.

The nation is more economically split, according to the CIA, than Iran or Nigeria.

East Carroll Parish, population 7,500 and home to Lake Providence, is worse off still.

When the gap between rich and poor is as wide as it is in Lake Providence, it becomes almost impossible for people to imagine themselves on the other side.

It becomes all too easy, as many do, to argue that "entitlement" programs such as food stamps are holding back people on the south side of the lake. They don't have enough incentive to work hard and get ahead. They become lazy, complacent, dependent.

A closer look at how these programs work reveals another picture.

Forty-five percent of the parish's residents receive food stamps, or SNAP benefits. The average payout is $1,492 per person per year.

This is a top gripe of the northsiders.

What you don't hear discussed as much is that they get help, too.

The U.S. Department of Agriculture spent $12.3 million in 2012 subsidizing farming in East Carroll Parish through direct payments, insurance breaks and other subsidies, according to data compiled by the Environmental Working Group, which tracks government farm subsidies.

The average farmer who gets a commodity subsidy in the parish received $20,554 in 2010, according to the group. The most highly subsidized farmer that year in East Carroll Parish got more than $655,000 from that one subsidy program.

Look at that number again.

$655,000.

Farmworkers I spoke to made about $7.25 to $10 an hour, even after decades of work. Even in East Carroll Parish, where the cost of living is certainly nothing compared with major U.S. cities, those wages won't support a family. Business owners and farmers here are fond of saying they can't pay higher wages.

That's hard for me to believe after looking at the subsidies.

In short, America is clearly a country where the state spends more time increasing the gap between rich and poor than limiting it.

We have a system where both parties were complicit in bailing out the banks, and yet, when there is talk of helping the poor and working class with healthcare, there is a government shutdown.

Welcome to plutocracy.

 

When did government-enforced income equality become a legitimate function of government?

 

Enforcing it directly isn't the agenda. Setting up proper public amenities is.

The Nordic countries have very well organized education and healthcare systems that are affordable and accessible to all citizens. The same can't be said for much of America.

Public amenities are what can indirectly lead to less income inequality, which in turn, leads to less crime and less social problems.

So, it's about public health and education, not so much directly limiting differences in income.

 

There are a lot of factors that contribute to the gap. Where we get into trouble trying to fix it is taking sides for the sake of partisanship, a consequence of the two party dominance, without being fully informed by unbiased information. We really are pathetic in this way.

 

Agreed. What we instead need are leaders that focus on policies that actually increase economic mobility -- regardless of where said policies may fall on the political spectrum.

 

But what do you propose?

I have recently changed my position on minimum wage and believe it needs to be raised due to the cost of welfare. 10-12 seems fair...

However, you cannot throw the rights claims of many of the poor simply not taking the actions to better themselves. That is an absolute fact.

I think we can make changes to even the odds a little, but if we tiny the table to much and get rid of personal responsibility we end up with what we have now. Too many people relying on their free stuff.

 

So let me get this right. You complain about certain groups receiving taxpayer money and subsidies through government intervention. Group A succeeds because they were chosen by the government to succed by receiving more government subsidy than Group B. You, however, do not agree that Group A should succeed, you think Group B should succeed.

So your solution is MORE government intervention and this time the government is simply going to choose the groups that YOU think should succeed by providing THEM a subsidy?

That's (*)(*)(*)(*)ing genius.

 

Ever since we've had government-enforced in inequality. The inequality started with the favorable treatment given investment income vs. work-for-it income.

 

Besides problems with our 'environment' which literally sustains our lives (and those of our children)... wealth inequality is our greatest REAL concern.

 

If you view socialized healthcare as a subsidy, I suppose, although that is a subsidy for all -- not for just one group or another.

The same goes for public education. This is a subsidy to the entire public.

The policies I support simply involve setting a functional foundation of healthcare and education for the public to rise economically. The only limits to your ability to learn should be effort and intelligence -- not money. The only limits to your health should be genetics and lifestyle, not money.

Again, countries like Norway operate in this fashion, and they actually tend to have freer markets than us in many cases.

 

I hear you and as a massive supporter of small government I am almost always on your side fiscally.

However to me this is another math problem from studying Engineering.

-We raise minimum wages, companies charge a little more for food (fast food as an example) to keep their margins.

-Those of us who can spend maybe .50 cents more per McD's meal.

-People making a little more money have a little less in needed subsidies.

-We spend less on welfare.

-The math I have see so far is fairly easy to see that in the long run our country would save.

My only concern is that this SHOULD quantify into lower taxes, but I'm sure some idiot in government will find something else to spend it on...

 

Much of Europe implements workfare instead of welfare. Deals are struck with local businesses to employ those recently out of work.

Either way, these policies muster productivity out of people in exchange for help.

 

Well said

 

I like this but many on the left would freak out.

I have debated with many who will use any slogan, mostly "they are so poor and now we make them work!"

 

Perhaps, although I think many on the left would support this if provided sufficient evidence from European systems (and from the ones that are already in place here).

The key, of course, is making sure these programs are run without corruption or abuse toward labor.

 

No... they're not. Once you hit a certain income level (somewhere around $42,000 for a single person) you no longer receive a subsidy. You are paying into the healthcare system because you're paying for other people to get healthcare. You then have to purchase your own healthcare at full price.

Same thing with the education system. It's not given to everyone but everyone pays in. What if I don't want my child to be taught according to the subpar standards of the public system? What if I don't want him to have some liberal teacher. My option is to take my child out of that school and purchase either homeschooling or private schooling for the child and yet I STILL have to pay into the public education system to support Shaniqua's 7 welfare babies who aren't doing a damn thing except (*)(*)(*)(*)ing off because they know by their parent that the government will just STEAL my money to take care of them whether or not they get their education..

What you are requiring is not only to morally abhorrent but it's also economically unfeasible.

 

Obamacare might work that way, but an NHS doesn't.

That being said, I'm not a fan of much of the ACA either.

Public education isn't unfeasible. It works quite well in many of our peers. Much of America's public education is rather lacking admittedly, but you can blame the corruption and ineptitude of many local governments on that.

America has many prestigious colleges, both public and private, but the reason for this is better management. If more cities and states administrated their pre-collegiate education as well as many of our colleges are, then this wouldn't be a problem.

As far as the welfare babies thing goes, that's another can of worms, but much of the solution to that is private rather than public. Cultural changes often require things like peer pressure.

What I'm discussing are economic and amenity changes.

 

Re: Post #11

50 cents here and fifty cents there and at some point sales volume drops off. At some point the convenience of fast food is overwhelmed by the cost of a $20 Big Mac.

Also anything that tends to increase wages gives a strong boost to automation or low-labor work practices.

Two examples.
Not all that long ago, ships moved freight as “break-bulk.” That is the freight was piled into the hold fairly loosely (as long as it was secured enough for safety. When the ship made port, hundreds of “longshoremen” would go aboard the ship and put the freight into nets and cranes would lift them out of the ship and either onto the ground or trucks/rail cars. In the 60s, there were hundreds of thousands of longshoremen working American ports and they were very aggressive in seeking higher wages.

Responding to ever-increasing costs for unloading ships McLean and Tantlinger developed the standardized shipping container we know today. It would hold the freight (packaged by the shipper) in a box that could be stacked in a ship or onto a trailer or into a special rail car. It took a while (the 70s) but by 1985, break-bulk freight was reserved for only the biggest and most unwieldy freight.

Long story short, the container was murder on longshoremen. The Longshoremen’s Union membership has less than 5% of the active membership it had in the 1960s. The few left (mostly crane operators)are very well-paid but the rest are flipping burgers or doing something other than unloading ships.

In the 1970s most of the coal mined underground used what was called “continuous mining.” As a rule continuous mining produced about one ton per man-hour. The UMW pressed to reduce that productivity to half. Instead, “longwall mining” took over. This improved productivity ten-fold. Mines that used to put 800 men per shift underground now put less than a hundred and produce the same amount of coal. Add to that the effect of the EPA on coal use in this country and Rich Trumka’s United Mine workers imploded. Yes, there are still union mine workers, but non-union guys make the same money. With productivity high, there is little pressure on wages. The surviving miners (about 10% of what you had in the mid-70s when the UMW was very aggressive) make good money but the rest don’t mine coal any more. One suspects most collect unemployment, food stamps,etc.

Increase minimum wage laws could make burger flippers and hotel housekeepers into latter-day buggy whip makers. http://singularityhub.com/2013/01/22/robot-serves-up-340-hamburgers-per-hour/

Yeah, there will still be people who work fast food or make up hotels rooms. There just will a lot less of them. The arrogance of demanding high pay for low-value work will simply drive more jobs into automation or out of existence.

 

Should you be able to opt out of the Government "Stealing" your money to build "defence" equipment?

 

Listen, I get what your saying and I actually agree.

However, your entire precedence runs on "50 cents here and 50 cents there".

I do not advocate anything but the first "50 cents here". No one would lose their job under this because McDonald's (example) would and should raise prices to equal margin. I don't believe they would lose that much volume on a small increase, again not several but just this.

Do you really not see how any savings overall for the country could be have with smaller welfare payouts?

As you I am a small government fanatic, I am just trying to look at all sides. I truly believe it would equal smaller government in the long run.

 

We can tell the government to knock off the spending cuts and stop massively lying about our national debt. That is a start.

 

Sure if when we go to war you get your (*)(*)(*)(*) together and get ready to go fight.

 

Which only goes to show that income inequality doesn't lead to a lower standard of living for those on the lower end of the scale. I know some people here would immediately deduce that I MUST be rich if I'm saying that, but I'm not. The simple fact is that it is not a zero sum game. Income inequality and, much more certainly so, wealth inequality does not have an inherent negative quality. As stated, Nigeria now has more income equality than we do (still not sure I buy that), and? Compare it's top fifth to our bottom fifth, and it's still preferable to be an American.

If the real earnings of the top 1% quadrupled next year, but the 99%'s real earnings increased at their standard pace, would the 99% be much worse off for it? No. They wouldn't be harmed at all. In fact, in the long run, they would be better off for it, because that money would in fact trickle down, creating more jobs, higher wages etc. But the simple point - the important point here - is that the rich having more income or money doesn't hurt the poor because wealth and income aren't zero sum games.

 

It's still preferable to be Swedish in many respects as well though.

Nigeria was probably used as more of an extreme, but the same could be applied to most of our peers.

Denmark, Canada, Australia, Norway, and Finland all have less wealth disparity, as do plenty of other nations in the First World.

Quality of life is somewhat subjective, but a lot of people would find our healthcare costs rather detrimental to quality of life here as compared to most socialized nations.

Higher education is also more affordable in many of these countries.

 

The Elite getting Richer and Richer in the 19th Century didn't help the working classes during the Industrial Revolution in Britain. It took the combination of public outrage, political pressure and regulation in the law to get better and safer working conditions