# Is income inequality such a big problem is there is an adequate safety net? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [September 3, 2015, 4:40am UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786 "2015-09-03T04:40:41Z")\ **Posts on this page:** 14\ **Page:** 3
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [September 5, 2015, 4:45pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/41 "2015-09-05T16:45:12Z")
> [@Bone](#): > > It’s not fair. Neither is the world. Fairness is neither achievable or desirable. That’s a stupid argument. It also tends to be the point of view of people for who the “unfairness” of the world often ends up benefiting them. Modern national economies are not “natural” entities. They are constructs of man designed to convert labor and natural resources into the things people want and need. To ignore when these systems are inefficient and off balanced because “life isn’t fair” is absurd. > [@Bone](#): > > There is no desirable way to ensure that a 5’2" guy from Florida has a fair way to compete with his 6’8" neighbor for a spot in the NBA. You may say that everyone should have the same opportunity - I don’t think that’s attainable. I’d push for minimum levels of opportunity. No one is saying that everyone gets to be LeBron James. What they are saying is that everyone who isn’t LeBron shouldn’t have to starve. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [September 5, 2015, 4:52pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/42 "2015-09-05T16:52:10Z")
> [@msmith537](#): > > That’s a stupid argument. It also tends to be the point of view of people for who the “unfairness” of the world often ends up benefiting them. It’s not an argument - it’s a statement. You asked a question whether I think it’s fair. I answered. Who said anything about ignoring anything? > [@](#): > > No one is saying that everyone gets to be LeBron James. What they are saying is that everyone who isn’t LeBron shouldn’t have to starve. I agree. People who aren’t LeBron shouldn’t have to starve. I also like bacon and think that Taylor Swift has catchy songs. That seems just as relevant. ---
**Author:** ![Ken001](https://avatars.discourse-cdn.com/v4/letter/k/43a26b/32.png) [@Ken001](https://boards.straightdope.com/u/Ken001)\ **Post date:** [September 5, 2015, 8:28pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/43 "2015-09-05T20:28:57Z")
Human beings are social creatures who have gathered in tribes, clans, and communities for at least 40,000 years. We support and co-operate with each other. The human world is wealthier today than it has ever been yet there are homeless and hungry people. That is not just and equitable. Something’s going to break. Not in any dramatic sense such as a revolution. But slowly and quietly. Capital wealth will be taken by governments and redistributed - maybe as capital taxes, or upon death. Its happened before viz. Britain and the breakup of the great estates. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [September 6, 2015, 5:21am UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/44 "2015-09-06T05:21:33Z")
> [@Bone](#): > > But you assume that there is some kind of linear or linear like relationship between the amount of information your are able to process and the earnings you derive. That you can process 10 widgets which results in $100, so if a person processes 11 widgets, they should earn something near $110 dollars. Is that about right? This makes two mistakes. The first is the assumption of some kind of linearity. \*\*In reality, the marginal increase of the 1 widget could be worth 100000% more. \*\* This is made quite clear in professional athletes. Those that are only marginally better than competitors could yield dramatically different earnings. The only way to measure this is what the parties to the transaction are willing to pay. > > The second mistake is that the quantifiable widget processing is the only thing that contributes to the valuation. Qualitative measures could warrant exponential increases in earnings. Think of how a model gets compensated. Kate Upton is going to earn more than…not Kate Upton? I don’t know many models by name. Is she multipliers better at modeling skimpy clothes? Who knows. The only way to determine what she should earn is what someone is willing to pay. (bolding mine) What you’re avoiding saying is that the pro athlete, the supermodel, and the CEO don’t get these huge markups in pay for relatively small gains in productivity merely because of “marginal increases in productivity” but because of a limited number of opportunities in each field. For supermodels, this limit may be emergent. For pro athletes, this is directly due to restraint of trade and collusion between team owners. For CEO’s, it’s all about status and being able to write their own ticket. ---
**Author:** ![halman](https://avatars.discourse-cdn.com/v4/letter/h/5f9b8f/32.png) [@halman](https://boards.straightdope.com/u/halman)\ **Post date:** [September 6, 2015, 6:02pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/45 "2015-09-06T18:02:27Z")
> [@grude](#): > > It seems the really horrible thing about income inequality is if people are actually starving in the street or have no where to sleep, I realize it isn’t ideal for economic health. > > But as long as not able to work doesn’t mean death in a gutter, I’m not seeing just how disgusted and other negative emotions some feel over the fact there are outlandishly rich. > > So one guy blows more on private planes to ferry his cat around than most will earn in a lifetime, at the end of the day so what? In a materialistic society such as the United States, the ability to spend has a tremendous impact on people’s self-esteem. Being unable to purchase items that are not even ‘luxuries’ makes people feel bad, especially if children are going wanting for decent clothing, dental care, safe transportation, and so on. People dying in the streets is a third-world situation, at least one would hope so. But abject poverty does exist in the U.S., and income inequality has a lot to do with it. Because the middle class spends most of the money it takes in, unlike the wealthy, who ‘invest’ it, but don’t buy nearly enough goods and services to keep the money flowing through the economy. It is the ‘trickle down’ spending that keeps the lower income people eating, the wages earned doing yard work, washing dishes, washing clothes, working for the middle class. When the middle class cannot afford a gardener, or a housekeeper, then the lower classes starve. Today, the middle class is looking at becoming gardeners, or housekeepers, because the middle class jobs are evaporating. No amount of philanthropy can replace paying better-than-living wages, so that the money is easy to come by, and many goods and services are in demand. Money needs to flow through the economy over and over again, not sit in a bank account, or tied up in stocks, bonds, and other ‘investments’. For consumers to consume, they must have disposable income. Which means that they must make more at their jobs than it costs to live. Sending jobs off-shore increases profits in the short term, but eventually there are fewer people who can afford the products that they used to make, and demand decreases. When American companies began manufacturing in China, we did not see any drop in prices, even though production costs were cut significantly. In fact, prices went up as quality has gone down. All the while, stockholders and executives have been raking in the money, while the middle class is shrinking, and wages are stagnating. Without more money flowing through the economy, America is likely to see another recession, as demand for goods and services steadily declines. Tightfisted policies mean that times will be tight. We are making so much profit that we are all going broke, because no one will share that wealth. Wages today should be somewhere north of 18.00 dollars per hour, based upon productivity improvements made over the last 30 years. Forget about the minimum wage. If everyone pays the minimum, than raising the minimum will only make things more expensive. If people pay significantly more than the minimum, more money will flow through the economy, so more people will have money to spend, so economic activity will improve, so there will be more money to spend. ---
**Author:** ![WhyNot](https://avatars.discourse-cdn.com/v4/letter/w/c77e96/32.png) [@WhyNot](https://boards.straightdope.com/u/WhyNot)\ **Post date:** [September 6, 2015, 6:24pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/46 "2015-09-06T18:24:02Z")
I don’t think it’s even a matter of economics. It’s a matter of sociology and psychology. And it’s not even a matter of human sociology and psychology. It’s, at the very least, \*primate \*sociology and psychology. Even [monkeys get pissed off when they perceive they’re not being paid fairly](https://www.youtube.com/watch?v=lKhAd0Tyny0). You can formulate all the economic theories you like, but at the end of the day, we have a lot of hairless apes who are getting pissed off at what they \*perceive \*as not being paid fairly. You can argue all you want about whether that’s true, about whether being the CEO brings more or less value than being an engineer or being a janitor, about whether income trickles down or trickles up, but sooner or later, the poo is going to start flying. Income inequality is such a big problem because people \*think \*it’s a big problem, and people have a habit of creating revolutions when they feel like they have big problems. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [September 6, 2015, 11:37pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/47 "2015-09-06T23:37:05Z")
I suspect that income disparity in the upper three quintiles is a greater threat to political stability than is lack of a strong safety net for the lower two quintiles. “The poor will always be with us,” it has been said. But absurd concentrations of wealth and profit share at the top can be seen as pre-empting opportunity for the ambitious and entrepreneurial in the upper-middle. Then again, I’ve met lots of middle-income people who are happy just to work for rich people, and presumably would have been proud to be higher-ranked slaves of a Pharaoh. 😕 ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [September 7, 2015, 2:27pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/48 "2015-09-07T14:27:04Z")
> [@Omar\_Little](#): > > Well don’t invest in those companies then. . There’s always someone who trots out the old argument that a free market will solve all economic problems. It’s nonsense, of course. “Don’t like lower incomes? Well then don’t invest in being black.” ---
**Author:** ![Tim\_R.Mortiss](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim_r.mortiss/32/142_2.png) [@Tim\_R.Mortiss](https://boards.straightdope.com/u/Tim_R.Mortiss)\ **Post date:** [September 7, 2015, 3:19pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/49 "2015-09-07T15:19:01Z")
“Income inequality” is just code for “we need more socialism.” In reality, your circumstances are dictated by YOUR circumstances, not by how much better off somebody else is. I know this will not be a popular opinion on this board, but IMHO, the biggest problem in the USA today is that it doesn’t suck \*enough \*to be poor. If it did, you’d see more people struggling to get out of poverty rather than accepting it. ---
**Author:** ![Esox\_Lucius](https://avatars.discourse-cdn.com/v4/letter/e/848f3c/32.png) [@Esox\_Lucius](https://boards.straightdope.com/u/Esox_Lucius)\ **Post date:** [September 7, 2015, 7:34pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/50 "2015-09-07T19:34:31Z")
**Tim R. Mortiss** , stop patting yourself on the back for not being poor, as if you alone are responsible for it and nothing else. YOUR circumstances, whether you’re rich or poor, depend on a complex maze of interconnected reasons. Pretending you did it all by yourself, as if you grew up alone on an island with no contact at all with anyone else, is just an excuse to puff yourself up and act superior. You might want to sit down before you read this: you are a socialist just by being a member of a social species. Your life and your circumstances are inextricably tied to the members of the herd around you. Working hard will get you ahead only if circumstances allow it, as they did for you if you’re to be believed, but those circumstances don’t exist for plenty of the working poor. ---
**Author:** ![GrumpyBunny](https://avatars.discourse-cdn.com/v4/letter/g/bc8723/32.png) [@GrumpyBunny](https://boards.straightdope.com/u/GrumpyBunny)\ **Post date:** [September 7, 2015, 7:45pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/51 "2015-09-07T19:45:11Z")
> [@Ken001](#): > > The human world is wealthier today than it has ever been yet there are homeless and hungry people. That is not just and equitable. > > Something’s going to break. Not in any dramatic sense such as a revolution. But slowly and quietly. Capital wealth will be taken by governments and redistributed - maybe as capital taxes, or upon death. > > Its happened before viz. Britain and the breakup of the great estates. Also viz France and the guillotine. 40,000 people beheaded during the French Revolution. Really makes some revisions to the tax code look better in comparison, doesn’t it? ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [September 7, 2015, 8:59pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/52 "2015-09-07T20:59:58Z")
> [@Bone](#): > > It’s not an argument - it’s a statement. You asked a question whether I think it’s fair. I answered. Who said anything about ignoring anything? It’s still a stupid one. “Shit happens” is not a reasonable economic policy. > [@Tim\_R.Mortiss](#): > > “Income inequality” is just code for “we need more socialism.” In reality, your circumstances are dictated by YOUR circumstances, not by how much better off somebody else is. > > I know this will not be a popular opinion on this board, but IMHO, the biggest problem in the USA today is that it doesn’t suck \*enough \*to be poor. If it did, you’d see more people struggling to get out of poverty rather than accepting it. I’m going to go out on a limb and guess you don’t know Jack Shit about being poor? Also your statement is logically absurd. If it didn’t “suck to be poor”, being “poor” would be a non-issue because no one would complain about being it. ---
**Author:** ![Tim\_R.Mortiss](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim_r.mortiss/32/142_2.png) [@Tim\_R.Mortiss](https://boards.straightdope.com/u/Tim_R.Mortiss)\ **Post date:** [September 7, 2015, 9:39pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/53 "2015-09-07T21:39:13Z")
> [@msmith537](#): > > …Also your statement is logically absurd. If it didn’t “suck to be poor”, being “poor” would be a non-issue because no one would complain about being it. Maybe I wasn’t clear. When I italicize a word, that indicates that it is a very important part of the statement, not that it is a part you can safely ignore and still follow the meaning. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [September 7, 2015, 11:15pm UTC](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786/54 "2015-09-07T23:15:12Z")
> [@foolsguinea](#): > > (bolding mine) > > What you’re avoiding saying is that the pro athlete, the supermodel, and the CEO don’t get these huge markups in pay for relatively small gains in productivity merely because of “marginal increases in productivity” but because of a limited number of opportunities in each field. For supermodels, this limit may be emergent. For pro athletes, this is directly due to restraint of trade and collusion between team owners. For CEO’s, it’s all about status and being able to write their own ticket. In what way am I avoiding saying something? I’m not exactly sure what your criticism is. Demand, limited available slots, all of these factors (and more) contribute to extreme ends of the spectrum when it comes to compensation. I think asserting collusion is a bit tenuous since many aspects of collusion would be illegal. Obvious exceptions for unions and other organizations like MLB and such. My point is, Habeed’s assertion that these gains are a result of theft, or that there should be some linear type relationship between output and compensation - is not the way the country operates. > [@Isamu](#): > > There’s always someone who trots out the old argument that a free market will solve all economic problems. It’s nonsense, of course. “Don’t like lower incomes? Well then don’t invest in being black.” No where was it asserted that the free market will solve all economic problems. This is a strawman. And you’re introducing race in this fashion is a red herring even more so than when Habeed did it. > [@msmith537](#): > > It’s still a stupid one. “Shit happens” is not a reasonable economic policy. You seem to have this problem of interpreting things in an unreasonable way that doesn’t follow from the statements you’re responding to. First it was mistaking a statement of fact as an argument, now it’s assuming that same statement is some kind of economic policy position. We weren’t even discussing economic policy. Let me refresh your memory, you asked two questions in post #33 as follows: > [@msmith537](#): > > But if talented, bright, hardworking people aren’t able to develop those expertise, skills, inventions or leadership because their parents didn’t send them to the right prep schools or they couldn’t afford hundreds of thousands in loans to go to the right colleges or they didn’t have relatives who could back door them into the right internships at the right companies, **does that seem like a fair system? Or even one that is particularly desirable?** (my bold) Does it seem fair, does it seem desirable. That’s what you asked. If you think any answer that doesn’t match your own is stupid, why bother asking? That seems like a poor way to have a discussion. Do you think it’s fair? I don’t and answered as such. Do you think it’s fair? Whether something is desirable or not was your second question. I agree with you that it’s not a desirable situation as you laid out. To that extent I expect we are in agreement. The next question should be what should or could be done about it. But instead you’ve simply called it stupid. Do you deny that the world isn’t fair? Is stating that axiomatic truth stupid in some way? I think it would be more stupid to deny that reality. Of course, then we go off into fantasy land about revolution, slavery, and the guillotine. Yay reality. [Previous page](https://boards.straightdope.com/t/is-income-inequality-such-a-big-problem-is-there-is-an-adequate-safety-net/729786.md?page=2)