At what point is income inequality too unequal?

[Magiver]

I missed the comment about illegal work. It’s not illegal in my state to pound a nail into a shingle.

[Euphonious_Polemic]

@John_Mace

You’re talking about the other kind of income inequality. The OP is bemoaning the increase in poor/lower income people. My opinion is based on what has happened during and after every recession. Maybe it’s different this time, but I doubt it.

? I’m not sure what you mean by “the other kind” of income inequity.

I’m talking about the distribution of income becoming more and more unequal. In other words, the wealthiest are getting a larger and larger share of the pie. This has been occuring for the past 30 years, recession or no recession. The US is one of the few countries that has shown an increase in income disparity since WW II. (China and Brazil are two others) It’s a steady increase in disparity.

The question as I see it is: Is there a point at which this increase in income disparity will become a bad thing? Obviously the GINI index for a country cannot rise to be = 100. This would mean that 100% of the wealth/income is in the hands of a single person, and the rest of the country would starve to death. If we follow this US trend of increasing income disparity, where does it stop?

And Algher - we’re not talking here about the ratio between what you personally and Zuckerberg personally makes. We’re talking about the proportion that the top earners make, compared to the bottom earners.

I still stand by the comment that I and others made earlier that one very important aspect of this discussion is the ability of people to move from the lowest earning group to a higher group. If this ability is eliminated or curtailed, (or if there is a perception that it is curtailed), then the lower income earners will start to get pissed off.

This is where we see the flippant “just get a better job” or “just start a business” posts. People still think its easy to rise above poverty through hard work alone. With increasing income disparity, this ability will get harder and harder until it is impossible.

[Voyager]

@Magiver

The business mode is pretty simple. A person starts small doing work that doesn’t require a lot of capital and works up to larger jobs using the profit to build on it.

In my example the kid had 4 people working for him by the time I hired him.

It’s sad that you make light of people who start up their own company using hard work and a little initiative. If I had your “can’t do” attitude I would not have survived 3 1/2 years of unemployment.

If some states require a license to drive a nail into a shingle then you can eliminate this from an infinite number of jobs a person can do for money that don’t require much of an investment.

but to answer your question, no my roof doesn’t leak and has stood up to driving winds that destroyed the shingles done on commercial building in my area. I presume those were done by professional contractors.

Ah - so he’s not a guy with a truck any more.
Like I said, in California you don’t need a license if you do jobs under $500. That is kind of hard to support yourself on, though, not to mention 4 workers. There are plenty of people who deal with unlicensed contractors to save money. Sometimes they get away with it. Sometimes they wind up in the paper crying about getting ripped off. Not roofs, but I know someone who did lots of improvements without the proper paperwork, and then had to get them done over before they sold the house.
You also didn’t mention insurance.
I’m all for small businesses. We gave a ton of money to a handyman who started doing it when he got laid off from an IT job. He plays by the rules and we got references. I’m not going to gamble on someone who chooses to cut corners to save money.

[Voyager]

@Algher

How do we know he did his work illegally? Ya’ll seem to be making some assumptions, or I missed it where Magiver said he was not licensed or bonded (not sure where Magiver lives for that matter). This could be a legit sole proprietorship run by a guy who first worked for another roofer, then split off on his own.

There ARE a lot of semi-skilled service jobs out there. I have a guy doing some work for me on a property. Turns out once I pay him to help out for 2 weeks, I have to make him an employee. I am instead paying for his $275 general Mr. FixIt fee so that I can pay him directly instead.

I wasn’t making any assumptions - I was just asking questions. It is very possible that he is fully licenses and insured, but tells customers he isn’t to make them think they are getting a bargain by beating the system. Anything called “Starving Artists” is not run by starving artists.

[BrainGlutton]

@Buchanan

Brains, motivation, creativity, and interpersonal relationships are not capital. No amount of money in the world could make me a good storyteller.

Torture might.

[Euphonious_Polemic]

@Magiver

The business mode is pretty simple.

Just to move this hijack back to the point of the OP:

I believe what friend Magiver is trying to do is answer the OP in this way:

OP: Income inequity has been increasing in the United states for 30 years. At what point (if any) does income inequity become a problem for society? Is there a point at which having most of the wealth earned by a very few people in society creates a lot of problems?

Magiver: No, income inequity is not and will never be a problem. This is because there is nothing whatsoever to prevent any person from becoming successful and moving up into that upper income bracket. So those in the bottom 20% have only themselves to blame. If they do not move up in earning power, it is because they are lazy, or have otherwise made poor choices that they must now live with.

I think that this is what is being said here.

[Damuri_Ajashi]

@jtgain

I wouldn’t put a number on it. I would put the point where such an inequality is the result of a legalized form of slavery, serfdom, or other kind of indentured servitude. To quote a meant to be comical phrase, “The world needs ditch diggers, too.” So long as people are free to change jobs, obtain more education, and start their own businesses, I would scratch my head at the need for government intervention.

I would also look at it in a “normal” economy. Not one in nearing the 4th year of a downturn/stagnation.

So it has to get to the point of legalized slavery? I think folks, justified or not, start picking up torches and pitchforks when see their standard of living degrading and there is not enough of a military presence to put a boot on their throat. When they see opprtunities for themselves and their children shrinking, they may feel they no longer have a stake in maintaining the social status quo.

@Grumman

Never. If someone’s standard of living is low, that is the problem. The problem is not that someone else’s standard of living is too high.

So wealth disparity doesn’t matter? Perhaps. After all wealth disparity is greater now than it was at the height of the roman empire.

@Snowboarder_Bo

Do you think there is an infinite amount of wealth, and the people with none just aren’t trying hard enough?

Yes that is what they believe. They believe taht the folks that have wealth created it virtually on their own and anyone that doesn’t have wealth need only go out there and create it.

@Magiver

CEO’s are few and compete against each other locally. It’s easier to boost their wage using performance metrics as a reward.

You can use the term “fairness” but it’s really nothing but wishful thinking in a worldwide economy where we are all in competition for the same hourly wage.

Really? I think CEOs compete on a global scale. A few things that improve CEO compensation are that they are never choosing between taking the job you offer them and missing their next mortgage or rent payment, their pay is determined by folks whose pay you are instrumental in setting, the good ones are not stuck between CEO and sitting on their barka lounger.

@emacknight

…
For all the bitching on this message board, the US still has upward economic mobility. And the American Surfs aren’t about to turn the rich into cat food (aka vote for higher taxes on the rich) because they still believe they might some day be rich.

Income mobility in the US isn’t what it used to be and people are starting to realize that.

As as this is the one year anniversary of the the Arab Spring, it might be a good time to look at why Mohamed Bouazizi lit himself on fire. And to give you a hint, both Tunisia and the US both have the same coefficient.

The difference between the two is that in Tunisia, it was an oppressive government that was the problem, here it is a lack of government.

@Buchanan

Anyone arguing that “capital” is a hurdle to starting basic service businesses like roofing, landscaping, snow-plowing, etc. is full of shlt and most likely has never started or run their own company. This isn’t France or something. Every American reading this can “create” a sole proprietorship by the snap of their fingers and begin putting services or consulting revenue on their Schedule C for 2011 taxes.

The only, and I mean only, barrier is your first good customer: all of the other expenses will take care of themselves.

I don’t know about those things youa re talking about but the market for that sort of stuff isn’t large enough to accomodate everyone who needs work. I’ve startedd many small businesses and frankly every retail operation requires at least a down payment on a lease and money for inventory. Try to get professional freelance work is not really viable except in a few industries. But if you want to plow snow twice a year, yeah great you can do it but you can’t make a living with it unless youa re doing a lot of other things as well and you have found some way of getting enough business in an industry with almost no barrier to entry. Still its better than starving.

@Snowboarder_Bo

Is there anyone who is willing to make the statement “Income inequality will never be too unequal”?

@Buchanan

I am willing. As I stated above, provided equal opportunity is there and technology/quality keep advancing like they are, I do not care about unequal outcomes. But I make no comment about your OP in terms of potential lawlessness or instability.

Do you think this equal opportunity exists?

@obbn

I do, however, think that poor people tend to think that the wealthy go there “just because” and fail to take in consideration the hard work and risks that most took to become well off. Sadly I am not in the 1%, not even close. But I know a few that are and they busted their butts to get there. It is very easy to hate someone who is wealthy when you think that their wealth was just handed to them. Maybe it is a bit easier to understand the wealthy if you have a good idea of the sacrifices they made to get them to that point.

Sure most wealthy people are hard working folks. A lot of poor people are also very hard working, they miss school plays because they need to clean office buildings at night. The obbscenely wealthy got lucky. Every last one of them had some luck somewhere along the line, I know too many intelligent relatively wealthy hard working people who tried to become obscenely welathy and things just didn’t work out taht way, only a few of them actually end up making obscene amounts of money.

@Euphonious_Polemic

Just to move this hijack back to the point of the OP:

I believe what friend Magiver is trying to do is answer the OP in this way:

OP: Income inequity has been increasing in the United states for 30 years. At what point (if any) does income inequity become a problem for society? Is there a point at which having most of the wealth earned by a very few people in society creates a lot of problems?

Magiver: No, income inequity is not and will never be a problem. This is because there is nothing whatsoever to prevent any person from becoming successful and moving up into that upper income bracket. So those in the bottom 20% have only themselves to blame. If they do not move up in earning power, it is because they are lazy, or have otherwise made poor choices that they must now live with.

I think that this is what is being said here.

I don’t know if Magiver is calling the poor lazy, I think he is saying that as long as the poor have a fair opportunity, then noone will really have any reason to complain.

The problem is, whether justified or not, if all the fairness in the world results in 1% of the world owning virtually everything and 99% of the world struggling to make ends meet, people nmight think that Magiver’s definition of fair is inadequate.