changed to "wealth inequality"

[Script]

OK you made me look at it....  typical legislative claptrap.

I guessed so

Still I think it's interersting cos it names two problems that I see.
(1) What do we do for people who simply cannot earn enough?
(2) Does giving direct government subsidies to individual companies also have downsides? And is giving some subsidies to the extant they are given today still justified?

Taxing workers benefits will just incentivize companies to hire less such workers, just like higher minimum wage salaries are driving increasing automation in fast food (like burger flipping machines).

Companies hiring less people or hiring only for lower wages is pretty much status quo already (in Japan, in the EU, in the US?). Nobodoy wants to accelerate that.

I think what that law in the article suggests is not taxing benefits as such but cutting down on company subsidies. And yes, you are right, it will most probably drive companies to opt for more automation faster.

That's why I mentioned taxing automation and robots -- a discussion we already had.

Japan looked very closely and skeptically at the introduction of minimum wages in several European countries. But when the practice was found and agreed upon by (so-called ) experts and politicians of toutes couleurs to not necessarily have such detrimental effects on the economy, the conservative party of Japan decided to adopt it. I wonder why.

I am not a fan of paying people to do nothing. Just like taxing stuff makes less of it, incentivizing people to not work will create more of that [...]

Paying people to do nothing is counterproductive, and yes, it's a reality in some European countries. It's the downside of laws and regulations that have been introduced in the name of solidarity to help as many people as possible, while there are a very very few who unfortunately think they have to take advantage of it. Just as you often say, there are no simple solutions. But a solution that helps a majority is better than doing nothing.

Japan appears to be a leader at replacing workers with robots (even robot pets).

Yes, and that's why it might serve as a case in point even for the US.

Looking at Japan, they have said farewell to the very noton of 'student' or 'entry level jobs' -- simply because at some point, somewhere between the height of deflation and the start of QE, those jobs have become career jobs for a growing number of people. Figure a full-time job which, if you took no days off over the entire year, still only produces a yearly income that is below the poverty line. And this is a reality for too many people (I assume some 10%) in Japan with the recently introduced minimum wage in place...

In total, Japan has 40% of the employed population working in so-called 'irregular' jobs. At the same time, they are facing the most severe labour shortage in several fields since the 1960s and 70s due to demographics.

Which leads to education. Japan's educational system is pretty much the American system, and if you asked me, it has done no good to the country. Some 20% of the working population simply can't afford good education for their children in the hope that they will maybe be able to fetch a good job. What a waste of potential talent.

What's the situation in the US?

------------

If we collectively feel like we need to provide a minimum income to all citizens, we need to engineer this in such a way that it is neutral and doesn't impact their ability to also be employed.

There has been a test in Finland with 2,000 people dependent on state benefits. The test proved that it basically works. Those people received state benefits and were allowed to keep all income they earned by themselves. Result: everybody was eager to work even more. The problem: such system can't be financed, unless taxes increased on some other end.

Anyway, I would really like to rephrase the above into:
"we need to secure (some) people's livelihood"

Of course, minimum wage, if at all, cannot be more than one little cog in a complex system. Just as you have repeatedly pointed out, changing just one tiny thing creates a whole bunch of other problems elsewhere -- and those might even be worse. And that's exactly why I'm really with dmp on this, we probably need a whole set of new cogs...

So let's assume we collectively felt we needed to change something, what would you suggest?

 

[JohnRoberts]

There has been a test in Finland with 2,000 people dependent on state benefits. The test proved that it basically works. Those people received state benefits and were allowed to keep all income they earned by themselves. Result: everybody was eager to work even more. The problem: such system can't be financed, unless taxes increased on some other end.

AFAIK this experiment isn't over yet and won't report final results until something like 2019. Only 2,000 (unemployed) people is far from a broad whole economy wide test, but at least they are trying something different, to eliminate the disincentive of losing unemployment benefits when you get a job. 

https://www.theguardian.com/inequality/2018/jan/12/money-for-nothing-is-finlands-universal-basic-income-trial-too-good-to-be-true

Of course I don't know a workable economically engineered (planned) solution. Not sure there is one, but lets chew on this. That's why I renamed this thread "wealth inequality" so we can explore. 

For now I would like to keep driving unemployment levels down into the dirt. While slow we are starting to see wage growth as labor market tightens up. I read about businesses who couldn't find skilled workers, hiring kids right out of high school and training them to fill the skilled positions they need.

JR

 

[Script]

Yes, that experiment isn't over yet. But interim reports pointed to it being rather successful on the individuum level until then. Will have to wait for final results, yes. But one thing is clear already. Even if it is successful (and I'm optimistic), it cannot be financed easily on a large scale just like that.

Same holds for UBI (unconditional basic income), which has been discussed in several EU countries, including Switzerland, but is difficult, if not impossible to finance, if nothing else changes at the same time. Basically I understand UBI as being highly democratic in that it gives benefits to all. Downside: It doesn't change or even consider the wider economy-related employment situation.

As for 'wealth inequality' in general, it has been extensively studied in many countries. And basically we really have to talk about two phenomena.
(1) People who indeed simply earn too little to call it 'making a living'. (Highly problematic!)
(2) People who 'fear' they could easily loose their status and then find themselves in the above category. (This is a spectrum, but it is also problematic cos these people apparently tend to turn their backs on democracy cos they do not see themselves represented politically).

-------
OK, unemployment down. Good plan. How?

And I suggest we also take into account so-called 'hidden' unemployment. There are indeed people in Japan and the EU (again, I don't know in detail about the US) who do well work -- so naturally do not count as unemployed -- but they work under highly unfavourable conditions and basically on the brink or below the poverty line. This is not the majority in any country, but these people exist undeniably and deplorably.

 

[JohnRoberts]

Yes, that experiment isn't over yet. But interim reports pointed to it being rather successful on the individuum level until then. Will have to wait for final results, yes. But one thing is clear already. Even if it is successful (and I'm optimistic), it cannot be financed easily on a large scale just like that.

classic problem of running out of other people's money.

Same holds for UBI (unconditional basic income), which has been discussed in several EU countries, including Switzerland, but is difficult, if not impossible to finance, if nothing else changes at the same time. Basically I understand UBI as being highly democratic in that it gives benefits to all. Downside: It doesn't change or even consider the wider economy-related employment situation.

As for 'wealth inequality' in general, it has been extensively studied in many countries. And basically we really have to talk about two phenomena.
(1) People who indeed simply earn too little to call it 'making a living'. (Highly problematic!)

Who says every job needs to provide a comfortable living or support a breadwinner (whole family)?

When I was a kid most teens held part time jobs. I mowed lawns, shovelled snow, delivered newspapers, etc.  For two summers while in HS I worked in a machine shop for $1.25/hour.  At different times I held two jobs, working a co-op day job associated with my college (Northeastern U) education, and pumping gas at night.  I became very familiar with the bottom rung of the employment ladder.

I worry kids today don't get the same employment experiences (opportunities) we did, for better and worse. It makes me a little crazy when they shut down some kid's lemonade stand.

(2) People who 'fear' they could easily loose their status and then find themselves in the above category. (This is a spectrum, but it is also problematic cos these people apparently tend to turn their backs on democracy cos they do not see themselves represented politically).

that is an interesting theory, hard for me to completely embrace as a major problem.  Democracy is about freedom and rights, not a guaranteed income. That is the promise of socialism that sounds good on paper but never really delivers. Those ignorant of history are always susceptible to repeat old mistakes.

-------
OK, unemployment down. Good plan. How?

Mostly government needs to stay out of the way and not hinder business. Of course we need some regulation to prevent the excesses that unfettered capitalism can lead to, but too much regulation slows economic growth and gives big businesses a competitive advantage. (Like facebook inviting regulation because it will just lock in their superior market position).

And I suggest we also take into account so-called 'hidden' unemployment. There are indeed people in Japan and the EU (again, I don't know in detail about the US) who do well work -- so naturally do not count as unemployed -- but they work under highly unfavourable conditions and basically on the brink or below the poverty line. This is not the majority in any country, but these people exist undeniably and deplorably.

Ah the corner office workers (madogiwa?)..  Japan has a unique culture and related economic issues, what do you do with workers you won't lay off because of an "employment for life" corporate culture (surely changing), but who don't generate productive value?

I don't look for universal lessons from Japan that has their own problems while income inequality has always been with us, and likely always will be. That doesn't mean we can't try to help the lesser among us.

Government likes to hand out money, but maybe better to provide direct services to the truly needy. While this is contrary to my small government view point, it seems more resistant to abuse.

Income inequality, is a modern variant on the very old class warfare screed. People are different, and create different amounts of wealth from their individual work effort. Not rewarding higher work output just discourages it, a lose-lose for all involved. 

JR

 

[desol]

Wealth inequality is a self propelling partiality.

 

[Script]

Who says every job needs to provide a comfortable living or support a breadwinner (whole family)?
When I was a kid [...]

Thanks for sharing. Haven't pumped gas as a teenager, but did many similar things -- and for too long. So I know what you mean. Of course, nobody wants to see kid's lemonade stands disappear (and nobody wants to impose minimum wage on them or tax that either). That would be ridiculous :

But happening to be a family breadwinner and having to work two lowly paid part-time jobs plus pumping gas at nights would be unfavourable. Or working full-time at a machine shop at age 45 plus overtime and still earn below the official poverty line would be unfvourable. Could we agree on that?

that is an interesting theory, hard for me to completely embrace as a major problem.  Democracy is about freedom and rights, not a guaranteed income.  That is the promise of socialism that sounds good on paper but never really delivers. Those ignorant of history are always susceptible to repeat old mistakes.

OK, that is simply too many ideas strung together to reply to.

I'm not at all interested in discussing 'conservative' versus 'socialist', or 'capitalism' versus 'communism'. In my books, all these terms simply fail to describe reality today. And I don't have to look into history to see, and I repeat, that the conservative party in Japan has just introduced minimum wage. I think Abe would be furious if anyone ever called him and his ideas socialist

As for the 'theory', it's not mine. Basically that's what sociologists from several countries say. There are people who are poor (precarity) and there are people who are afraid of becoming poor. Two very different things. The first is a hardship, the second is a sentiment.

Mostly government needs to stay out of the way and not hinder business.

Now it gets interesting. The overregulation part we already covered. We want less of it, and for my part I repeat, regulation does not have to be 'one size fits all'.

Hindering businesses sounds counterproductive. But letting them run rampant also sounds counterproductive. Example: Amazon. How many local bookstores and local shops are left in your area? Next come deli's and pharmacies -- just an example.

Anyway, I don't see how any of this helps running unemployment into the dirt -- and I always include 'hidden' unemployment or rather reducing the number of people who work under precarious conditions. Again, they are not the majority. But in the period from Lehman to QE until today, the number of people who entertain the sentiment or fear of becoming poor seems to have grown (maybe already retracting right now in some countries). And I tend to belive that the elections we have seen as of late, mainly in Europe, including the UK, but also in Japan and the US, reflect this clearly. Call it radicalization of the electorate.

Ah the corner office workers (madogiwa?)..  Japan has a unique culture and related economic issues

Japan is NOT unique! There's a high language barrier, but Japanese uniqueness is a persistent and pestilent CLICHÉ. Actually, Japan, the US and several European countries, with the UK and Germany above all, are pretty close in terms of economic and (several) social developments. Not identical, but comparable in some respects. Of course, there are no 'universal lessons' to be learned from comparisons (I don't believe in metaphysics ). Still, Japan is worth a closer look.

Madogiwa ('praying at the window') is an excellent example -- an example of an idea that looked promising at a time of labout shortage, but has turned into a huge problem in times of economic turbulence. As of 2010, after the burst of the bubble and the Lehman shock, only 8.8% of companies practices 'lifelong employment' and the 'seniority principle' (wage increase by years of belonging to a company) any more. Today, it's non-existent at the entry level. Only exception: state servants. Old dudes blocking too many positions, while employees in their mid-40s too are staring out of the window...

Another interesting example is 'kakusa shakai', which translates as 'society of differences'. It started as a media buzzword, but was picked up and studied extensively by sociologists and economists. The results are soothing in some respects, alarming in others.

Again, I am not interrested in discussing class warfare :

Government likes to hand out money, but maybe better to provide direct services to the truly needy.

Pretty much how Japan handles it. Coupons and services (but to get them is very difficult here).

 

[JohnRoberts]

But happening to be a family breadwinner and having to work two lowly paid part-time jobs plus pumping gas at nights would be unfavourable. Or working full-time at a machine shop at age 45 plus overtime and still earn below the official poverty line would be unfvourable. Could we agree on that?

Many things about life are unfavorable, then we die.

Back in the 80's I shared my rented house with my brother and his family (2 kids), and I hired him to work part time evenings for my kit business (a win-win for both of us). He already worked a full time day job (engineering). At a low point in his economic journey he even used food stamps briefly to help feed his family (before he lived with me). After a few years living inexpensively with me, he was able to save a down payment to buy his own house. He died several years ago (from cancer) but never complained about his difficult times. He worked hard and rose above. 

OK, that is simply too many ideas strung together to reply to.

8)

I'm not at all interested in discussing 'conservative' versus 'socialist', or 'capitalism' versus 'communism'. In my books, all these terms simply fail to describe reality today. And I don't have to look into history to see, and I repeat, that the conservative party in Japan has just introduced minimum wage. I think Abe would be furious if anyone ever called him and his ideas socialist

As for the 'theory', it's not mine. Basically that's what sociologists from several countries say. There are people who are poor (precarity) and there are people who are afraid of becoming poor. Two very different things. The first is a hardship, the second is a sentiment.

Millions of people in the world are still dealing with more basic security concerns. Look at how many drown in the Mediterranean in search of a better life (3,000+ in 2017). 

Now it gets interesting. The overregulation part we already covered. We want less of it, and for my part I repeat, regulation does not have to be 'one size fits all'.

Hindering businesses sounds counterproductive. But letting them run rampant also sounds counterproductive. Example: Amazon. How many local bookstores and local shops are left in your area? Next come deli's and pharmacies -- just an example.

Never had a bookstore, or deli in Hickory during my 3+ decades here. I have purchased a bunch of books from amazon and appreciate the low prices.

Competing against Amazon is a truly scary thing and they are on a trajectory to take over more and more of their distribution channel (including delivery). So far Amazon has finessed the anti-competitive label by supporting other small vendors within their infrastructure, but larger moves like buying whole foods is a threat to grocery sector, already a narrow margin business. They also purchased pillpak(?) a medicine packaging/delivery service that gets them a toehold in that huge healthcare related business.

It almost seems like Amazon has become too big to compete against. Never a good thing.

Anyway, I don't see how any of this helps running unemployment into the dirt -- and I always include 'hidden' unemployment or rather reducing the number of people who work under precarious conditions. Again, they are not the majority. But in the period from Lehman to QE until today, the number of people who entertain the sentiment or fear of becoming poor seems to have grown (maybe already retracting right now in some countries). And I tend to belive that the elections we have seen as of late, mainly in Europe, including the UK, but also in Japan and the US, reflect this clearly. Call it radicalization of the electorate.

There is a recent wave of nationalism all around the world.

Japan is NOT unique! There's a high language barrier, but Japanese uniqueness is a persistent and pestilent CLICHÉ.

I really do not want to lecture people about their countries (but can't help myself). Japan has a similar aging/low replacement birth rate demographic to a number of other western nations, but also like a handful of other countries (not the US) Japan has a very homogenous population (due to immigration not being supported).

The US has benefitted hugely from immigration over the centuries, and this could mitigate our own slowing replacement birth rate, as immigrant groups usually have higher birth rates (I apologize for the stereotype). 

Actually, Japan, the US and several European countries, with the UK and Germany above all, are pretty close in terms of economic and (several) social developments. Not identical, but comparable in some respects. Of course, there are no 'universal lessons' to be learned from comparisons (I don't believe in metaphysics ). Still, Japan is worth a closer look.

Europe is presently wrestling with trying to absorb a huge wave of immigration from the middle east and Africa. They appreciate the value of gaining more young workers to support domestic manufacturing, but seem unprepared to handle the cultural clash. Europe historically was a place that people left, not immigrated into so they are figuring it out as they go.

Madogiwa ('praying at the window') is an excellent example -- an example of an idea that looked promising at a time of labout shortage, but has turned into a huge problem in times of economic turbulence. As of 2010, after the burst of the bubble and the Lehman shock, only 8.8% of companies practices 'lifelong employment' and the 'seniority principle' (wage increase by years of belonging to a company) any more. Today, it's non-existent at the entry level. Only exception: state servants. Old dudes blocking too many positions, while employees in their mid-40s too are staring out of the window...

The promise of lifetime employment was useful to major companies, until it wasn't. Lifetime employment developed a relationship with employees that does not exist if they could be laid off at any moment. While the credit collapse may seem iconic, the real factor that changed things (IMO) was rising competitiveness from China.

BTW in the 80's Japan was the cheap offshore manufacturer, with a currency exchange rate of 200+ yen/$.  Arguably poaching US manufacturing jobs, but international trade is not a zero sum game. 

Another interesting example is 'kakusa shakai', which translates as 'society of differences'. It started as a media buzzword, but was picked up and studied extensively by sociologists and economists. The results are soothing in some respects, alarming in others.

Again, I am not interrested in discussing class warfare :
Pretty much how Japan handles it. Coupons and services (but to get them is very difficult here).

Yes, we have similarities but significant differences too. I see few other countries that make a comprehensive model for the US economy.  We are still a relatively young country, and constantly evolving as new populations make their contribution to defining who we are.

JR

 

[Script]

Millions of people in the world are still dealing with more basic [...]

Sure. But sounds a bit like what I like to call "(fatal) relativism", cos it leads away from the initial topic of how to reduce unemployment and precarious working conditions at home.

It almost seems like Amazon has become too big to compete against. Never a good thing.

At the same time, Amazon is also known, at least in Europe, for not treating parts of their employees particularly well. And they are hardly the only company to do so. So what would you suggest?

Europe historically was a place that people left, not immigrated into so they are figuring it out as they go.

True and false.

Many central European countries, as an aftermath of post-WWII labour shortages in the 1960s and 1970s, saw a lot of immigration. People who were invited back then were happy to work for better wages than at home and quite a few of them stayed.

People coming as refugees today is a different situation. While many EU countries know very well what living peacefully together (or side by side) with other cultures means and implies, it is the perceived injustice that refugees get all sorts of benefits (by national/international law), while some domestic people are truly stuggling economically. It is this type of immigration that has made domestic social differences and precarious working conditions, which have been visible before, become more clear.

While the credit collapse may seem iconic, the real factor that changed things (IMO) was rising competitiveness from China.

Hmm. China is a bigger economic threat than most Japanese still might want to admit. The same holds true for the US, in my opinion. The Chinese will overtake us all at some point. Personally, I don't see that as a big problem though.

Anyhow, the situation in Japan today is the outcome not so much of China developing quickly, but rather of the bubble economy bursting, followed by the dotcom bubble and finally the Lehman shock -- which in turn was followed by a long series of political inactivity due to corruption, scandals and Prime Ministers changing every six months in this country...

China, yeah, it sure is a factor like anywhere else, but it is due to Japanese-style QE that social differences have become very clear.

===

Japan has always preferred automation and robots to immigration to tackle labour shortages. And they still do. However, they are also rethinking immigration right now. At the same time, only a few years ago under Abe, Japan has started a process of introducing more and stricter worker protection laws to counteract blatant exploitation.

The situation seems to be different in the US, which appear to have more people working on the brink of poverty, but they still advance automation and robots all the same. As for worker protection laws in the US, I'd really need help by someone filling me in on the details.

 

[JohnRoberts]

Sure. But sounds a bit like what I like to call "(fatal) relativism", cos it leads away from the initial topic of how to reduce unemployment and precarious working conditions at home.
At the same time, Amazon is also known, at least in Europe, for not treating parts of their employees particularly well. And they are hardly the only company to do so. So what would you suggest?

I do not have all the answers, but the first step is to recognize and rank problems for significance.

True and false.

A significant difference is that legal immigrants in the US become "Americans" and full members of society. Many nations use "guest workers" who do not become integrated into the local society but remain distinct subcultures.  We have discussed this in the past.. UK even goes as far as to allow Shariah to be adjudicated in arbitration courts. 

Many central European countries, as an aftermath of post-WWII labour shortages in the 1960s and 1970s, saw a lot of immigration. People who were invited back then were happy to work for better wages than at home and quite a few of them stayed.

There are many guest workers in the middle east, and the most notable abuse right now is North Koreans farmed out to work in foreign countries while the NK state keeps the bulk of their pay.

In the US we have long employed temporary seasonal (immigrant) workers for farm harvesting. As these become less reliable (wrt availability) farmers are turning toward automation even for that classically manual task. 

People coming as refugees today is a different situation. While many EU countries know very well what living peacefully together (or side by side) with other cultures means and implies, it is the perceived injustice that refugees get all sorts of benefits (by national/international law), while some domestic people are truly stuggling economically. It is this type of immigration that has made domestic social differences and precarious working conditions, which have been visible before, become more clear.
Hmm. China is a bigger economic threat than most Japanese still might want to admit. The same holds true for the US, in my opinion. The Chinese will overtake us all at some point. Personally, I don't see that as a big problem though.

Interesting to see China and Russia holding joint military maneuvers. World geo politics has always been a game of odd man out where US, Russia, and China, play two against one. Russia bats well above their weight in this regard due to energy exports and willingness to intervene militarily to show force.  On a parallel track Alibaba (major chinese internet vendor, just partnered with a russian internet company to expand there).

Anyhow, the situation in Japan today is the outcome not so much of China developing quickly, but rather of the bubble economy bursting, followed by the dotcom bubble and finally the Lehman shock -- which in turn was followed by a long series of political inactivity due to corruption, scandals and Prime Ministers changing every six months in this country...

Japan suffered a deflationary spiral and economic stagnation lasting ten years in the 1990s after the asset price bubble collapsed. They have become the poster boy for what to avoid in central bank policy, but easier said than done.

I have warned about the elephant in the room, reducing our extraordinary liquidity injection over the last decade. We are one of the few, maybe only central bank tightening credit. Since all this liquidity is fungible and doesn't stop at borders, the emerging markets and rest of the world is suffering from this withdrawal of liquidity. Pundits want to blame President Trump's trade posturing for this global softening, but this tide of liquidity going out is the real issue (IMO).

China, yeah, it sure is a factor like anywhere else, but it is due to Japanese-style QE that social differences have become very clear.

===

Japan has always preferred automation and robots to immigration to tackle labour shortages. And they still do. However, they are also rethinking immigration right now. At the same time, only a few years ago under Abe, Japan has started a process of introducing more and stricter worker protection laws to counteract blatant exploitation.

The situation seems to be different in the US, which appear to have more people working on the brink of poverty, but they still advance automation and robots all the same. As for worker protection laws in the US, I'd really need help by someone filling me in on the details.

How do you define poverty...

In US for a family of 4, poverty line is considered $24,500.....  world wide more than 2B people live on less than $3.10 a day... In fact both populations are improving but not fast enough for some.  I am more worried about the billions worldwide barely scraping by, than all those lusting for a new $1,000+ Iphone.  Rule of law is still sadly lacking in too much of the world. Without rule of law, it is hard to grow economic opportunity.

JR 

 

[Script]

I do not have all the answers, but the first step is to recognize and rank problems for significance.

Good idea. How about we stick to domestic 'wealth inequality'.

How do you define poverty...

In US for a family of 4, poverty line is considered $24,500.....  world wide more than 2B people live on less than $3.10 a day...

The US can hardly be the standard for the world

Have defined 'poverty' several times above already, even differentiating between 'factual' poverty and 'perceived' poverty.

OK, as for 'wealth':
Wealth of an individual is defined as net worth, exposed as: wealth = assets − liabilities
(I think we had this definition before.)

And I'd suggest we look at 'relative poverty' with 'poverty thresholds' defined on national levels. Interesting tidbits on the history:

https://en.wikipedia.org/wiki/Poverty_threshold#History_of_the_concept_of_relative_poverty

The term 'customary' is problematic of course, cos while owning a iPhone for $1000+ might seem customary these days, there sure are cheaper alternatives. But I'd definitely say that 'owning a mobile phone' is customary these days.

Rule of law is still sadly lacking in too much of the world. Without rule of law, it is hard to grow economic opportunity.

Interesting, cos the US sure has 'rule of law', but it also has the widest disparities in income and wealth among all developed countries. Sorry for being this provocative

===

BTW, I loved reading about what you did for your brother. He sure was lucky. I tried to do something comparable for my brother just a couple of years ago. Unfortunately, he's more of the moaning type ??? :

 

[desol]

I have a simple answer. Compassion.


Edit:
I also have a definition of what it means, for those that do not know.

Compassion
[kuh m-pash-uh n]
See more synonyms for compassion on Thesaurus.com
noun

  a feeling of deep sympathy and sorrow for another who is stricken by misfortune, accompanied by a strong desire to alleviate the suffering.

 

[Script]

1+

... solidarity.

 

[JohnRoberts]

Good idea. How about we stick to domestic 'wealth inequality'.

it seems like a worldwide phenomenon

The US can hardly be the standard for the world

indeed  the world wide definition for poverty is in dollars per day, not dollars per hour.

Have defined 'poverty' several times above already, even differentiating between 'factual' poverty and 'perceived' poverty.

wrt perceived poverty, the central bank easing after 2009 credit collapse targeted asset inflation to stimulate the "wealth effect" , when people feel wealthier they spend more growing the economy... This seems like smoke and mirrors to me, but was openly discussed and pursued.

OK, as for 'wealth':
Wealth of an individual is defined as net worth, exposed as: wealth = assets − liabilities
(I think we had this definition before.)

And I'd suggest we look at 'relative poverty' with 'poverty thresholds' defined on national levels. Interesting tidbits on the history:

There has always been an uneven distribution of wealth, and probably always will.

Since we are sharing opinions, what do you think is the ideal distribution of wealth?

https://en.wikipedia.org/wiki/Poverty_threshold#History_of_the_concept_of_relative_poverty

The term 'customary' is problematic of course, cos while owning a iPhone for $1000+ might seem customary these days, there sure are cheaper alternatives. But I'd definitely say that 'owning a mobile phone' is customary these days.

I don't own a mobile phone. I cancelled mine after I stopped attending out of town trade shows where I found a mobile phone useful for keeping in contact when out of town.

Interesting, cos the US sure has 'rule of law', but it also has the widest disparities in income and wealth among all developed countries. Sorry for being this provocative

Rule of law helps reduce poverty, it doesn't prevent wealth. Perhaps because US has better economic opportunity for people to become wealthy.  I won't insult you with examples of countries where poverty is evenly distributed.

JR

PS: Ironically perhaps my brother bought and owned his own house a decade before I did. The house I shared with him was rented. When I was running my own small business my capital was tied up in inventory, and I was not considered a good mortgage risk by bankers. 

 

[desol]

"Perhaps because US has better economic opportunity for people to become wealthy.  I won't insult you with examples of countries where poverty is evenly distributed.

JR"

In all my travels the poverty stricken were the most giving, friendly and accommodating. They also exhibited a healthier example of community. By contrast North America is cold and partial...in all it's wealth. In the US, you better have a gun to protect your wealth and 'happiness'.

 

[JohnRoberts]

"Perhaps because US has better economic opportunity for people to become wealthy.  I won't insult you with examples of countries where poverty is evenly distributed.

JR"

In all my travels the poverty stricken were the most giving, friendly and accommodating. They also exhibited a healthier example of community. By contrast North America is cold and partial...in all it's wealth. In the US, you better have a gun to protect your wealth and 'happiness'.

Then why do the poverty stricken want to come to America?

The united states is compassionate and generous, that is not the topic or answer. IMO

JR

PS: I have made a handful of charitable contributions to Hurricane relief after recent storms. It started when I had relatives in one storm hit area, then I felt guilty so donated to others. I have relatives in the Florence path so the cycle will probably repeat.

 

[desol]

Then why do the poverty stricken want to come to America?

The united states is compassionate and generous, that is not the topic or answer. IMO

JR

PS: I have made a handful of charitable contributions to Hurricane relief after recent storms. It started when I had relatives in one storm hit area, then I felt guilty so donated to others. I have relatives in the Florence path so the cycle will probably repeat.

That's a good point, however...it doesn't change what I've observed. I'm guessing people are fleeing gang violence, thugs, drug cartels, etc. Fleeing the worst possible conditions and places.

IMo, lack of compassion and selfishness is the heart of wealth inequality. It's dog eat dog... F.U. -  what's mine is mine...what's yours is your fault. If you don't like it...I have a gun waiting for you. Racism, hidden agenda's, partialities, payoffs, old boy clubs, etc...you name it. Is that freedom? Is that unbiased opportunity?  I think this drive to get ahead isn't nearly such a problem in places where they have a lot less and are forced to have a sense of community. This equals more happiness despite the lessened living conditions. .02

 

[cyrano]

Automation won't go away. That means unenployment will only get worse. We have to prepare for a future where people will be paid for doing what they like to do. Make music, write poems, care for the elderly or kids...

Hoping that companies will provide education is a pipe dream. It's simply against a company's interest. I mean, you train someone and that person quits to go work for a competitior?

And, no, contracts with obligatory duration to fulfill a training aren't the answer either. It leads to trainees without motivation, just fulfilling their obligation. The military is a clear example of that. I've met far too many pilots who are just hanging around until they can go and fly for a private company.

Another problem is that multinationals have grown far too powerful. They don't pay taxes, or at least, avoid the major part. And there's no govt that's independent enough to make 'em pay those taxes. There will always be another country offering a better proposition.

There's an American economist who put forward the perfect solution: abolish all income tax, replace it with a rise in VAT. I'm sorry, the name escapes me. He worked it all out and the numbers work. Companies also pay VAT and they can't avoid this kind of taxation.

Another side effect is that people who lead a simple life, are no longer obliged to work hard to pay all kinds of small taxation. And people who have the money to lead a luxurious life, pay more taxes.

It also leads to more motivated staff for companies. Those who want to work, don't need as much motivation, do they?

Unfortunately, just mentioning VAT is enough to make some people foam at the mouth from madness. And the idea of some people not working, is so alien to some that they even won't think about it.

When I read his proposal, I tried to evaluate the numbers. And they seem to work. I've also ran it by a number of people who teach economics. All of them who ran the numbers, came to the same conclusion. Unfortunately, the majority outright condemned the idea without even thinking about it, let alone, run the numbers.

Our bias will kill us, one day.

 

[JohnRoberts]

Automation won't go away. That means unenployment will only get worse. We have to prepare for a future where people will be paid for doing what they like to do. Make music, write poems, care for the elderly or kids...

Bummer getting paid for what we like to do...

I have been temporarily optimistic about several promises of really cheap energy... First nuclear energy but several missteps have dissipated momentum for next generation technology.  Even cold fusion sounded good momentarily. Almost free energy would change the game, but alas no free lunch yet.

Automation is good, but IMO minimum wage entry level jobs are also good... people need to learn how to work, by working. Learn to show up on time, do what supervisors tell them, give a sh__ about the customer, etc. 

Hoping that companies will provide education is a pipe dream. It's simply against a company's interest. I mean, you train someone and that person quits to go work for a competitior?

In fact companies are already doing it because they can hire enough skilled workers. Retaining employees is the business equivalent of a personal problem (personnel?)

And, no, contracts with obligatory duration to fulfill a training aren't the answer either. It leads to trainees without motivation, just fulfilling their obligation. The military is a clear example of that. I've met far too many pilots who are just hanging around until they can go and fly for a private company.

I was drafted into the army with no quid for my quo.....I picked the longest school to burn time stateside to avoid going to viet nam, but instead of sending me to the long school they just awarded me the MOS, and sent me to Ft Riley to repair tank computers. 

Another problem is that multinationals have grown far too powerful. They don't pay taxes, or at least, avoid the major part. And there's no govt that's independent enough to make 'em pay those taxes. There will always be another country offering a better proposition.

governments can normalize taxation, being optimistic I believe it can happen.

There's an American economist who put forward the perfect solution: abolish all income tax, replace it with a rise in VAT. I'm sorry, the name escapes me. He worked it all out and the numbers work. Companies also pay VAT and they can't avoid this kind of taxation.

VAT (a variant sales tax) has been floated but not sure what it solves. My concern is that I don't trust the government to create a new tax , without eliminating the old one, so we might end up with tax on top of tax.

If you think about it sales tax is the more regressive tax of all... Poor people spend a larger fraction of their income than rich people.

Another side effect is that people who lead a simple life, are no longer obliged to work hard to pay all kinds of small taxation. And people who have the money to lead a luxurious life, pay more taxes.

huh... by simple life do you mean off grid, under the table?

It also leads to more motivated staff for companies. Those who want to work, don't need as much motivation, do they?

Unfortunately, just mentioning VAT is enough to make some people foam at the mouth from madness. And the idea of some people not working, is so alien to some that they even won't think about it.

VAT and not working are not somehow linked... just another tax. (Is my foam showing?).

When I read his proposal, I tried to evaluate the numbers. And they seem to work. I've also ran it by a number of people who teach economics. All of them who ran the numbers, came to the same conclusion. Unfortunately, the majority outright condemned the idea without even thinking about it, let alone, run the numbers.

Our bias will kill us, one day.

Father time will kill us all...

JR

 

[Script]

I don't own a mobile phone.

You retired, no? Almost all jobs these days require you to have one. You don't have no phone, you can't do no work. Not fully true, but mostly.

Since we are sharing opinions, what do you think is the ideal distribution of wealth?

There is not ideal, at least not for me. And I'm fine with differences. That's why I pointed to kakusa shakai (society of differences). People are different after all.


It's not about redistributing for redistribution's sake. It's indeed about opportunity. To believe that we run systems right now that do guarantee equal opportunities to all (or let's say a huge majority) is simply negating reality. And equal opportunity does not mean that anybody can do or become absolutely anything. Nor does it mean that everybody will end up being equal. People are not and will likely never be (in all aspects and with all respects).

In the worst case scenario, it's about helping those who really want to make things work but can't -- due to illness, misfortune, layoffs etc etc etc etc. And for those who can make things work, help them make things work even better. And yes, we should not forget and add that tiny minority of people who are indeed weak, lazy, impertinent, dilusional, resistant -- but some of these people might need a bit more help than just that.

Instead, however, what our systems all to often do is help those for who it is going very well and outstandingly well -- and we help them in a way that their things are going even better and supremely well. -- But what do we do for those, where things are not going so well or even downright bad? Are we really doing enough? A happy worker (better income, maybe?) is a more productive worker, and if not, a happier person, at least  But instead we (well, 'you', the US) are handing out spliffs on presciption now. Is that gonna cut it?

Anyhow, I think that if income and wealth gaps are too wide or growing 'out of proportion', it's no good for a country and its people as a whole.

I won't insult you with examples of countries where poverty is evenly distributed.

Can't really and don't need to, cos those countries are all too often an insult in and by themselves -- but mainly an insult to their own suppressed and exploited populaces.

=========

BTW, just read that Mr. Bezos donated a tiny fraction of his money to help homeless people etc. -- Good. But are we expected to applaud now? Why doesn't he also take another, bigger fraction of his money and pay better wages? Then I might at least consider raising my hands.

Buffet has suggested many things over the years that would have counted as 'progressive', to say the least, if realized. One that comes to mind, in 2005 it was, I think, was raising the tax base to $90,000 -- what an idea, downright 'outlandish'! Even more outlandish and radical than raising income tax progressively for high incomers and capital gains tax accordingly for high cap gain incomers.

And I have no reason to doubt Mr. Buffet's judgement, cos I think this guy really knows how to run a company. And honestly, if that statement of his was motivated by him trying to prevent others from rising to his 'status', then sorry, but he's known to be a bit jolly -- and anyway I really couldn't care less

 

[JohnRoberts]

You retired, no? Almost all jobs these days require you to have one. You don't have no phone, you can't do no work. Not fully true, but mostly.

:  My boss is pretty accommodating since I own the business....

There is not ideal, at least not for me. And I'm fine with differences. That's why I pointed to kakusa shakai (society of differences). People are different after all.


It's not about redistributing for redistribution's sake. It's indeed about opportunity. To believe that we run systems right now that do guarantee equal opportunities to all (or let's say a huge majority) is simply negating reality. And equal opportunity does not mean that anybody can do or become absolutely anything. Nor does it mean that everybody will end up being equal. People are not and will likely never be (in all aspects and with all respects).

In the worst case scenario, it's about helping those who really want to make things work but can't -- due to illness, misfortune, layoffs etc etc etc etc. And for those who can make things work, help them make things work even better. And yes, we should not forget and add that tiny minority of people who are indeed weak, lazy, impertinent, dilusional, resistant -- but some of these people might need a bit more help than just that.

Instead, however, what our systems all to often do is help those for who it is going very well and outstandingly well -- and we help them in a way that their things are going even better and supremely well. -- But what do we do for those, where things are not going so well or even downright bad? Are we really doing enough? A happy worker (better income, maybe?) is a more productive worker, and if not, a happier person, at least  But instead we (well, 'you', the US) are handing out spliffs on presciption now. Is that gonna cut it?

Anyhow, I think that if income and wealth gaps are too wide or growing 'out of proportion', it's no good for a country and its people as a whole.
Can't really and don't need to, cos those countries are all too often an insult in and by themselves -- but mainly an insult to their own suppressed and exploited populaces.

=========

BTW, just read that Mr. Bezos donated a tiny fraction of his money to help homeless people etc. -- Good. But are we expected to applaud now? Why doesn't he also take another, bigger fraction of his money and pay better wages? Then I might at least consider raising my hands.

Buffet has suggested many things over the years that would have counted as 'progressive', to say the least, if realized. One that comes to mind, in 2005 it was, I think, was raising the tax base to $90,000 -- what an idea, downright 'outlandish'! Even more outlandish and radical than raising income tax progressively for high incomers and capital gains tax accordingly for high cap gain incomers.

And I have no reason to doubt Mr. Buffet's judgement, cos I think this guy really knows how to run a company. And honestly, if that statement of his was motivated by him trying to prevent others from rising to his 'status', then sorry, but he's known to be a bit jolly -- and anyway I really couldn't care less

I still hold a major stock position in Berkshire Hathaway so I trust his investment chops, despite my declining attraction to common stocks (I'm old, but bonds suck more)..

Listening to rich people talk about tax rates can be deceiving, they already earned more money than they can spend in a lifetime, so raising taxes on other people's incomes makes their wealth harder to catch up to.

I don't begrudge Bezos just getting started with his charitable spending (and his charities look pretty decent). I suspect he has political ambitions so needs to build a track record of giving before going under the media microscope, while his investment in that Washington newspaper gives him some leverage with media coverage (at least indirectly).

Ask any of the self-made super rich how they feel about giving their wealth to government to spend for them.. .Rhetorical, we know the answer to that one already.

JR