Is income inequality unfair?

LittleDucky

Tue, Dec 09 2014, 11:28 am

youngishbear wrote:

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Doesn't most of their money sit unused?

I'm sure it's "invested", but a rich man's paycheck is rarely put completely back in circulation. Whereas when giving the little guys more cash it is basically guranteed that it will be used??

Even if it is sitting in a stock market or bank account, it is still being circulated. Just not as obviously. He is paying fees to his market manager, investment manager etc. Plus the high stock market prices (which go up when more people invest) encourages others that there is money to be made and encourages themto do business, hire people etc.
if the money is in the bank, the bank feels confident and will give out loans etc which helps everyone trying to get a house etc.
but many times the money is put back into R&D, expansion and growth. You just can't see it. Because once you make a million, you want to try to make a second million faster. And that is really what helps move the economy forward. Big $$ moving hands so that they can hire more people.
So long as it isn't sitting under his mattress it is in circulation.

gittelchana

Tue, Dec 09 2014, 11:33 am

southernbubby wrote:

Lately the news is full of stories of the plight of minimum wage workers who are striking to get better wages. At the same time, the CEOs are considered the robber barons of today. I agree that wages need to rise although it may not cure poverty or income inequality or even come close. Costco pays better than Walmart but has fewer stores, fewer items for sale, located in better neighborhoods, and has a smaller staff per store. Walmart pays the same low wages as other low wage businesses but the Waltons are one of the wealthiest families in the US. Most fast food restaurants and dollar stores are franchises whose owners don't get rich unless they own several franchises. Corporations are good at hiding wealth and at getting the government to bail them out.
What is the future of society if something doesn't change?

https://www.youtube.com/watch?v=ca8Z__o52sk

causemommysaid

Tue, Dec 09 2014, 11:39 am

Another problem is the shrinking middle class.

We get hit the hardest.

The rich can afford the taxes and increased prices for consumer products.

The poor get government handouts and just barely survive.

Those of us in the middle struggle along, paying 25% or more in taxes, continuously see rises in price for everyday items, and our incomes don't increase accordingly. We get treated like the rich and get zero breaks.
With time, most of us will end up on the poor side of the fence. A few of us will manage to make the rich side but not enough. The middle class shrinks and the disparity between rich and poor grows.

my question is how can the government foster an environment where the middle class can prosper?

Volunteer

Tue, Dec 09 2014, 12:22 pm

Is income inequality unfair?

That's like asking, "Is life unfair?"

I guess it is, in a way. Then again, Hashem is in charge, and we are supposed to have faith in his providence, and do whatever we can to make the world better ourselves.

In my lifetime, I have been quite comfortable, and I have been homeless, and everywhere in between.
Income inequality is a fact of life. No laws, economic policies, charity, or anything else can change the fact that some people will always have more resources than others. No society (capitalist, socialist, communist, or any other -ist) has been different.

ora_43

Tue, Dec 09 2014, 1:33 pm

acccdac wrote:

all I know was my tuition went up so I needed to make more money so I asked my bosses for a raise, when they said no, I went out, improved my resume (more certificates) and got myself a better job that paid more.

no one is forcing anyone to work at a fast food place.

Nobody is forcing any one specific person to work at a fast food place. But society is built in a way so that some adults will be working those kinds of jobs.

There are also a ton of people who reach age 18 without the skills they would need to pursue higher education. And/or with babies to support.

ora_43

Tue, Dec 09 2014, 1:37 pm

I think income inequality is "fair" if (and only if)
1. everyone has an equal shot at the good jobs
2. there aren't a certain number of people who are going to be doomed to poverty no matter what they do (eg, only enough jobs paying a living wage for 80% of the population).

I also think that "fair" isn't the only question. We also need to ask if income inequality is good for society, or bad for society. Regarding that, I think the answer is somewhere in the middle - you want nuclear physicists to be making more than cashiers, because studying physics is crazy hard and we want to encourage people to do it, but a situation where the median income is significantly below the average is bad for everyone.

ora_43

Tue, Dec 09 2014, 1:46 pm

southernbubby wrote:

I do think that if the minimum wage goes up, not only prices will rise but places will force one person to do the work of two or they will automate as much as possible.

A lot of proposed "increases" in minimum wage are really just keeping it at previous levels but with an adjustment for inflation.

southernbubby

Tue, Dec 09 2014, 1:57 pm

ora_43 wrote:

We know that not everyone has an equal shot at the good jobs.

Fox

Tue, Dec 09 2014, 4:19 pm

Not all income inequality is unfair, and attempting to ameliorate all such inequality stops economic growth in its tracks.

The answer, I believe, is to throw out all U.S. tax codes and tax *everyone* based on a percentage of income. No deductions for extra kids, owning a house, or owning a congressman.

Severely limit or even eliminate taxes on businesses. As Little Ducky says, people who have more money than they need don't keep it under their mattresses. They invest it, and that leads to greater economic growth. Taxing businesses *and* taxing individuals is double-dipping and severely impedes the ability of businesses to create more jobs and/or spend more money.

While we're at it, take the overwhelming majority of agricultural subsidies behind the barn and shoot them. Let Archer Daniels Midland apply for SNAP benefits if they can't make ends meet.

Of course, many of you remember how popular these ideas were when Steve Forbes tried to advance them!

One potential problem with this plan: a surge of unemployment among tax attorneys and IRS bureaucrats. But perhaps some of them could find honest employment at Wal-Mart, where they would actually benefit society with their labor.

causemommysaid

Tue, Dec 09 2014, 5:27 pm

Fox wrote:

do you know how many people in america are employed due to tax laws?

you are talking about destroying the careers of millions of Americans.

Fox

Tue, Dec 09 2014, 5:47 pm

causemommysaid wrote:

do you know how many people in america are employed due to tax laws?

you are talking about destroying the careers of millions of Americans.

Actually, the IRS estimates (per U.S. News and World Report) that there are approximately 800,000 people employed as tax professionals.

Of those, approximately 200,000 are CPAs. Since the majority of tax lawyers are involved in more complex areas of trust management and investment, it is unlikely that they would face significantly altered employment opportunities.

The majority of the 800,000 people who would be affected are seasonal tax preparers and small businesses that also do routine bookkeeping/accounting. So while seasonal employment might decline, the bread-and-butter of most small businesses would remain.

Moreover, the aging baby boom cohort will increase the need for financial professionals who can assist elderly individuals with routine money management and personal bookkeeping.

So the unemployment argument fails to move me. Undermining economic development in order to protect a class of employment is counter-productive. Just ask all the people employed in the draft horse industry. Oh, wait! They all found other jobs!

acccdac

Wed, Dec 10 2014, 1:49 am

ora_43 wrote:

I agree with you that some adults are "doomed" to work at these types of jobs their whole life but it shouldnt be the majority.

I believe the only reason a person reaches the age of 18 without skills is because they wasted away their education. No one forced them to waste their education that was a decision THEY made and THEY should live with the consequences.

If you are bringing up babies, if someone has a baby out of wedlock or under the age of 21 (again I'm not referring to jews because we have a different culture. What I mean by that is we get married young, we expect to either struggle or be supported, or we expect to ask for tuition breaks. But we do not tell bosses they have to pay us more simply because we cant afford our bills) that is a decision THEY made, why do the rest of us have to "pay" (indirectly) for their mistake (the mistake is not the baby, the mistake is having the baby without being able to support it)

I want to reiterate I'm talking about the average joe who is not a religious jew, who went through the US public school system, and is working at mcdonalds. I am not talking about the jewish life, because however much we have our issues in terms of money we are not picketing asking for minimum wage to be raised.

aro

Wed, Dec 10 2014, 8:10 am

lucymaud wrote:

In my country, we have a much higher minimum wage than the US. Yet, unemployment is lower. Having a decent minimum wage doesn't destroy jobs, it protects the most vulnerable in society. I thought that was a Torah value.

Whats the unemployment rate in your country?

southernbubby

Wed, Dec 10 2014, 8:43 am

lucymaud wrote:

Apparently halacha demands that we take the middle road in terms of what we pay employees. We can't be the lowest payers but are not obligated to be the highest. The Torah does address fairness in the workplace.

chickpea_salad

Fri, Dec 12 2014, 3:40 am

I don't think minimum wage is the problem. I think the low-income earners suffer the most from poor policy making and economic downturns. Minimum wage is just a symptom, not the disease.

But if someone comes to you and says they have a headache, you offer them an ibuprofen.

I think share-holding is an excellent step that businesses can take to help their employees. Also things like pay sacrifice schemes for childcare and insurance work well in the UK.

Subsidies are a dangerous game because they hide true costs while often promoting a less functional outcome. Not that they are never a good thing but the money can often be misplaced.

I don't know about in the US but in the UK unions tend to be for higher paid workers anyways (teachers, police, nurses ect) and union fees are so high that I doubt anyone could get enough representation to justify the expense on a minimum wage income.

It is hard to see people in poverty, it is also hard to run a business, and businesses are what help the poor. I think the wrong thing to do is to blame the poor though, often they are doing the best they can.

southernbubby

Fri, Dec 12 2014, 9:39 am

chickpea_salad wrote:

It was usually assumed that because the poor often made bad choices, such as teenage parenting with no commitment, or dropping out of school, that it was their fault. Poverty, however, also includes those who made all the "right" decisions. In the US schools are taxed based according to neighborhood property values so poor neighborhoods have underfunded schools which don't inspire students to want to graduate.

zaq

Sat, Dec 13 2014, 11:55 pm

youngishbear wrote:

Karl marx's idea was basically (simplified version, of course) that laborers deserve to share the profits, and not just be compensated for their time.

There are businesses that do this. It is called "profit-sharing" and usually has good results all around, as long as people do not start considering their share of the profits as a given to be depended upon. If profits decline, so do the profit shares.