The Disturbing Distribution of Wealth

Discussion in '2005 Archive' started by gb93433, May 19, 2005.

  1. gb93433

    gb93433
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    Up until 1973 the distribution of wealth was fairly equal in 20 percent increments. For example 20 percent of the US income went to the top 20 percent and those who were in the bottom 20 percent of wage earners received 20 percent of the US income.

    Today the bottom 20 percent earn 5 percent of the US income and the top 20 percent receive 45 percent of the US income. The most prosperous 1/10th of the population in the US receive 29 percent of the total US income.

    The average pay of a CEO in a major corporation was 11.9 million in 2000. Today 17 percent of the families in the US fall below the poverty line. The ratio between the typical rich and poor faimilies in the US is 600:1. The point is that the rich are making 600 times more than the working poor are who are making the rich richer.

    It has been figured that for today the best would be about 8:1.

    Is 600:1 ethical?

    (Moral Issues in Business, Shaw, W.H., Berry, V. 2004, p. 131-132)
     
  2. StefanM

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    No, it isn't.
     
  3. Gold Dragon

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    The math isn't making sense here. How can the top 20 percent and the bottom 20 percent both be making 20 percent of US income?
     
  4. just-want-peace

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    Sorry, but I read this to say that in '73 that everybody made the same. Surely this is not what you meant?!

    Example:
    Total income in '73 = $100,000,000.
    A.-"For example 20 percent of the US income went to the top 20 percent--" therefore $20,000,000 went to 20% of the population giving each percentage $1,000,000!?
    B.-"---and those who were in the bottom 20 percent of wage earners received 20 percent of the US income." therefore $20,000,000 went to 20% of the population giving each percentage $1,000,000
    C.- That leaves 60%, or $60,000,000 to go to 60% of the population, or once again, $1,000,000 per percentage point!

    This would be the socialists greatest achievements if truly doable!

    Unless you are on the gov't dole, your working is also making someone richer; and if that someone decided to shut down whatever service/mfg/production that you are thusly employed in, then you would no longer be making him richer, NOR would you be earning a salary!

    If you are self-employed, your customers are making you richer.

    This is the problem with the nanny mindset in todays society;
    "Whats yours is mine & I'm counting on Govt to give me my part of your labors!"


    Not to deny there's a gross inequity, but gov't cures are usually worse than the disease, so changing man's heart is the ONLY adequate way to solve the problem
     
  5. Gold Dragon

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    The divide has definitely grown.
     
  6. Scott J

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    As JWP alluded to, this isn't mathematically possible.
     
  7. Scott J

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    The divide has definitely grown. </font>[/QUOTE]Actually, that is remarkably stable- especially considering that the pie to be divided is much, much larger today than in 1967.

    Using 1996 dollars as the standard, the GNP in 1967 was $3632.1 billion. In 2003, it was $9985.4 billion.

    This in conjunction with your data suggests that the bottom 20% are roughly 2.5 times more wealthy than the bottom 20% in 1967.

    http://www.usc.edu/schools/sppd/research/casden/research/data_folder/us_gnp96.pdf.pdf
     
  8. Gold Dragon

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  9. Scott J

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    This smells of bias. What is a "typical" family in either category? What constitutes a "family"?

    Who says 8:1 is the best ratio... and based on what? If by squelching the investor class you were able to bring that ratio to 8:1 would you be satisfied considering that in all likelihood it would result in less wealth for the poor due to a lower GNP? In fact, we could see real poverty as in people starving in the streets.

    Your example by the way works out something like this: If the "typical" poor family earned $15,000 per year then the "typical" wealthy family would earn $9,000,000. That sounds unreasonable.

    Of course it depends on what you call "typical"... and what your agenda is.
     
  10. Scott J

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    Are inflation and cost of living factored in? </font>[/QUOTE]Yes. The statistics are derived in 1996 dollars.

    This is also supported by the fact that nearly half of those living under the American poverty level own their own home (46%). Also:
    http://www.heritage.org/Research/Welfare/bg1713.cfm

    In many respects, poor today is richer than middle class in '67.
     
  11. Joseph_Botwinick

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    What do you think we should do? I think it is ethical for those who risk their money to start their own business, provide a service to the public, and provide jobs, health care, and other benifits to others to pay people whatever they think their service is worth and for those who work for them to do the best job they can and to accept or reject the job based on what they think their service is worth.

    Joseph Botwinick
     
  12. Gold Dragon

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    Are inflation and cost of living factored in? </font>[/QUOTE]Yes. The statistics are derived in 1996 dollars. </font>[/QUOTE]Are you saying that the aggregate income of the bottom fifth is 2.5 times larger? Did you divide by the number of households in each quintile?
     
  13. Scott J

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    See my edit for further info.

    It isn't necessary to divide the number of incomes... the division into 20% sectors makes it unnecessary.
     
  14. Gold Dragon

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    It does matter because the GNP and quintile numbers are aggregates while you are making a statement about a single household.
     
  15. Scott J

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    Yes. If they take the risks, they deserve the rewards... especially when they bring wealth to those who work for them that they wouldn't have had otherwise.
     
  16. Gold Dragon

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    Why don't we just use the U.S. Census numbers who do all the calculations for us. I selected the numbers adjusted to the 2003 dollar and the Consumer Price Index.

     
  17. Scott J

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    It does matter because the GNP and quintile numbers are aggregates while you are making a statement about a single household. </font>[/QUOTE]The bottom 20% possesses 2.5 times more wealth. The data gives us no way of determining any single household.
     
  18. Gold Dragon

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    As a whole.

    Which makes statement like this decieving.

     
  19. Scott J

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    </font>[/QUOTE]According to that link, the top 5% average income was $253,239. The resulting ratio is about 25:1, not 600:1.

    Also, gb's contention wasn't built on the lowest and highest fifths but rather 20% blocks.

    Also, the ratio in 67 was 17.6:1.

    Finally, there is no indication of whether those bottom 5% figures represent the working young or not, ie. college students that have other sources of support.
     
  20. Scott J

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    As a whole.

    Which makes statement like this decieving.

    </font>[/QUOTE]It isn't deceiving at all. You might have not understood but that doesn't make me deceptive.

    "the bottom 20%" is an aggregate is it not? My statement was about a group, right?
     

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