Perhaps it would help if you told us what the correct number is, so we don’t overshoot and end up like Afghanistan, unless that’s the goal.
Is that the goal, be more like Afghanistan? Egypt? Iraq? Ethiopia is doing pretty well, maybe we should be more like them?
The fastest way by far would be to get rid of the exit tax and encourage the richest people to move to Singapore. It would only take a few of the mega-billionaires to leave before the ratio drops to your desired target. Unfortunately for Singapore their income inequality is going to be all messed up but who cares about them, right? They’re already worse off than the US, what’s another few percent?
Fix our healthcare system, which hampers our workers at every move. National healthcare will lead to better worker mobility, better entrepreneurship, and ultimately a better set of jobs. Right now, workers are locked into shitty jobs where they are not at maximum productivity because of health care fears.
Fix education disparity, so that people who are at the highest risk of failing get the most care in education, rather than the other way around. Our education system currently lays the groundwork for inequality.
Improve access to higher education, and figure out some way to manage tuition bloat. Right now, the US has the best higher education in the world, but more and more of that is educating foreign students. We need to face the fact that the world has changed, and manufacturing and other jobs are not coming back. We NEED to be maximumly prepared to lead in the new economy, which is going to mean we need to produce managers, technicians, and entrepreneurs rather than factory workers.
Encourage new childcare options, as women are the growing face of poverty and are not reaching their best economic output due to childcare.
There’s an analysis by one of my economics professors (in the context of India, so take that as you will) which I found illuminating
In other words, don’t make equality a focus in and of itself. If there are people too poor to help themselves, help them. If there are other things about inequality that you don’t like - improper use of wealth to affect legislation for instance - focus on that. If, as some have argued, inequality leads to widely varying cultural experiences, introduce ways in which people from different segments can have experiences in common. Don’t focus on removing inequality. People are inherently unequal.
I’ve always considered this a major issue up until this thread. But now I find myself agreeing with the poster above who said that we should be alleviating poverty directly rather than trying to create income equality. I would be interested in hearing more about this and why income inequality is not necessarily a bad thing, of course, if that’s ok with the OP?
And when competing with Third World labor, how would such workers be able to afford food and shelter here in America? America can’t possibly win the race to the bottom you are talking about, nor would it reduce income inequality unless you think condemning the working class to death by starvation counts. Oh, and you’d also have to eliminate all labor laws and safety regulations.
But possibly they could be fed and sheltered in bulk by the company, to save them that much in their personal budgets.
Of course, the reduced expenses would still have to be taken off their salary, additional burden on the company you understand, although possibly some system could be found to make the whole process more seamless, less complicated… some kind of fair in-house means of temporary exchange and compensation, perhaps ? Call it trip or scringe or something like that.
Well, there you go. Already providing innovative solutions !
Our labor would be worth more than 3rd world labor for several reasons, the biggest one being that it’s here, where the markets for the various products are. That means that instead of having to ship in the raw materials, have your ultra cheap labor put it together, then ship it all back to the US, you could cut out the middle man…if you could pay your labor what it would be worth to companies to do all of this. I don’t know what the exact (or hell, even ball park) price point would be to make US labor attractive, but it wouldn’t be starvation wages or all that other hyperbolic bullshit…more like something in the $15-20/hour range for good semi-skilled manufacturers.
But ok, let’s say you are right and the US can’t win a race to the bottom. What’s your alternative? You can’t force companies to hire people at the wage you THINK they should be paying to their workers, with all the benefits you THINK they ought to be giving. Companies will simply do what they have been doing, which is either highly automate or ship the jobs somewhere that workers will take less and simply suck up the extra costs in logistics as part of doing business. If they don’t do that, then companies will go out of business…simple as that. So, what’s your alternative? Presumably it would be to swipe the wealth from the rich to redistribute it to the poor and under-utilized working class and then…what? This doesn’t seem like a viable long term fix to me.
Just to add to this, with American workers, you also have literacy; familiarity with the basic concepts of the workforce, like being on time; reliable infrastructure; and rule of law.
Here we see the tension between two competing mindsets. Wesley Clark’s prevailed for a long time, and businesses responded in exactly the way XT describes, by replacing the artificially expensive American laborers wherever possible, with automation and offshoring.
Isn’t that exactly what minimum wage and universal health care are, respectively ?
But beyond that, a relevant datapoint I ran across: while the pay rate of executives and CEOs is high above that of employees everywhere, in other Western countries it generally hovers around 20-30 times what hoi polloi makes, with peaks in the 60s. In the US, the average lies anywhere between 185 and 380. CNN even reports a record x525 ratio back in 2000.
Of course, you can’t readily infer from that factoid that American CEOs are grossly overpaid - it could also be that American workers are grossly underpaid compared to their European counterparts. The truth actually lies in the middle : lower- and middle-class employee salaries have been stagnating for a while now and barely keep up with inflation, while exec salaries have been steadily raising the roof.
A hard cap there (maximum wage ?) might do some good to the economy since the company’s excess money has to end up somewhere. Doesn’t really matter where, be it investment/expansion/modernization of company operations (i.e. more paid workers), or higher pay/expanded benefits for the workers. Either way, income equality would be tackled.
Preeeetty sure companies have not altogether closed their doors in countries with lower GINI coefficients than the US, nor in countries with much more restrictive labour/wage laws & much toothier unions (e.g. Germany, France, the UK…).
A more modern and progressive tax system would probably be a good start, and not just in the sense of redistributing income; there is a pretty strong argument to be made that the U.S. government simply doesn’t collect enough tax to the point that it actually hurts job creation and trade balance.
This may not be the best thread to bring this up, but it fits.
When a large part of executive compensation comes in stock offerings, then executives will do absolutely anything to drive up short term profits in order to reap the fiscal rewards for themselves. It doesn’t matter what the long term consequences are. Shutting down the main employer in a town and moving it off shore to satisfy shareholders so that their own compensation doesn’t take a hit is what has been taking place for decades.
Executives get rich on stock offerings, and entire towns and cities suffer. If there was a way to reduce the compensation component available to executives through stock offerings then they would be less interested in short term profits, more interested in long term growth, and factories wouldn’t be uprooted at the drop of a hat and moved where labour is cheap and environmental regulations are almost non-existent.
Tax stock offerings at 75% or some ridiculous number or somehow detach executive compensation from share value. Of course in a capitalistic society this is impossible.
Fair Trade. Calculate how much more goods would cost if the country they were manufactured in had solid environmental, safety, and compensation laws and set the import duty for each item at that level. Use the tax money to alleviate hardship caused by rising prices. This would encourage domestic manufacturing while still benefiting from foreign competition that is genuinely innovative or brings more expertise to the table or whatever.
As a general response to the OP I think it’s a mistake to rely solely or even mainly on wealth transfers via the tax system. This reinforces the rightwing fantasy of Makers vs Takers. Instead we should take a look at how the elite extract wealth without adding value to society. Outlaw predatory lending. Regulate Wall Street. Restrict intellectual property (yes we want innovation but after a certain point it’s gone from incentive to profiteering). Get health care spending under control.
And there’s immigration. If there were fewer workers entering the nation each year (legally and otherwise) then the workers here would naturally be more valuable. Or if you hate that idea then how about the reverse? Laissez faire immigration right now lets in lots of laborers but elite professions don’t face that kind of competition. If we allowed for broader recognition of foreign medical credentials and let in more foreign doctors, for instance, we could reduce health care costs.
[QUOTE=Kobal2]
Preeeetty sure companies have not altogether closed their doors in countries with lower GINI coefficients than the US, nor in countries with much more restrictive labour/wage laws & much toothier unions (e.g. Germany, France, the UK…).
[/QUOTE]
Preeeeeeeeeetttttttttyyyyyy sure that most of the countries you are using for examples here also have increasingly used automation, outsource and offshoring, and in the case of the Germans they also have a perceived value add to their labor…their products are considered premium, and thus command top dollar. Plus, you have what is for all intents and purposes a captive market with the EU, since it’s a free trade zone for member nations. France and Germany, of course, being the major players, also get the lions share of the benefit out of the Euro and the EU. As for the UK…well, they aren’t exactly an economic powerhouse these days, and I’d say that their ‘more restrictive labour/wage laws & much toothier unions’ hurt them as much as help them, but YMMV…maybe it’s a workers paradise over there and I’m just missing something.
Well, minimum wage sets a low end bar on wages, and while this does tend to have a stifling effect on the lowest end jobs (notice that convenience stores and the like have increased their automation? Gas stations for years have only needed a single attendant to take transactions instead of several as it was when I was a kid), the distortion is has on the labor market is not huge…we can live with it. As for universal health care, it’s hard to say…we don’t have it, and it’s hard for me to see a path that would get us to it from where we are right now, and I don’t know how it would change the cost of labor equation. If you freed up workers from having to pay a large percentage of their wages to healthcare benefits then that certainly would be nice…but the money has to come from somewhere. If you are wanting it to come from business, well, you are back to the same problem…the total cost of labor would prohibit US or foreign companies from fully utilizing US labor, and so they would continue to seek alternatives.
Ok, but so what? If companies are over paying for their highest end then that’s a place they can be attacked by rival companies attempting to undercut them and steal their market share. Your labor, whether you be a CEO or a pipe fitter is worth what someone is willing to pay you for it.
A hard cap would simply mean that people who are perceived to be worth more than the cap would find other ways to be compensated, so I doubt it would do much. Certainly it’s not going to magically raise the wages of the people who we are discussing right now, so unless your plan is to lower the rich so that our GINI is better I fail to see how this helps. Now, if you steal the wealth from the rich and give it to the poor, THAT would work…for a while anyway. I don’t think it’s a good idea, but it has the fact that it would work for a while, and then when everyone was poorer we’d have a great GINI at last!
Well in that case, study this list, carefully. You need to get as many of those people to move to Sweden as you can. Maybe start a letter writing campaign, you seem to have plenty of free time, and really like to piss people off.
Or, just let them hide their wealth/income the way Europeans do. Like I said, get rid of the exit tax and they’ll probably leave on their own, otherwise just do what ever Der Trihs suggests, that’s sure to drive them out.
Ratios are funny that way, if only you understood.
