Inequality: Should the government be concerned about it?

[doubtingmerle]

Conservatives want to tackle the problem from the business end, improving commerce, and thus helping people earn more money. Liberals want to tackle the problem by social programs and particular business regulations pertaining to mandatory pay levels.

So only conservatives care about improving commerce? That's odd. I would have thought everybody wanted that.

In fact, when I check out liberal sites, they strongly support improving commerce. Have you read any liberal sites lately?

The difference is whether we should support a range of social programs. Conservatives often oppose many social programs. But many conservatives also accept a wide range of social programs. Minimum wage laws and Social Security, for instance, have strong support among many conservatives. In spite of the fact that Republicans won the last election, five states voted to increase minimum wage.

GOP wave can't wash away minimum wage increases | MSNBC

Election Pay Day: Five States Vote to Raise Minimum Wage - Corporate Intelligence - WSJ .

So there must be a lot of people out there voting republican while disagreeing with them on the issues. Go figure.

 

[doubtingmerle]

If a family can't afford a cell phone per person and can't afford 3 flat screen TV's, we view them as "struggling".

No sir, this thread has nothing to do with providing financial aid to those "struggling" families that have two flat screen TVs and can already pay for all their essential needs without any government help. If the poorest families in America, could get an education for their children, had a secure access to food, were sure they could get medical care and other essential needs met, and could do this without going helplessly into debt, all while owning two TV's and two cell phones, and all without a single government program to help them, then nobody would be here arguing that we need government programs to help.

 

[doubtingmerle]

Conservatives want to tackle the problem from the business end, improving commerce, and thus helping people earn more money.

If increases in the economy helped every family alike, then many social programs could be eliminated. However in terms of real wealth, the upper 5% has had a huge increase since 1979, but the lowest 20% has had a net drop.

http://inequality.org/income-inequality/

This is the problem with saying we can grow our way out of the problem.

 

[Viren]

The government should be concerned because government polices are largely the cause of it. When you raise taxes on the self employed by 50% and cut taxes on the rich by 50% inequality increases.

 

[doubtingmerle]

The government should be concerned because government polices are largely the cause of it. When you raise taxes on the self employed by 50% and cut taxes on the rich by 50% inequality increases.

Actually you appear to be saying the lack of government action causes it. For many here want to eliminate any trace of higher taxes on people with higher incomes. You are recommending a policy of progressive income tax, which has been a fundamental policy to limit inequality in America for a century. But now the angry populace with pitchforks are screaming that they no longer want the government to give them a break on taxes compared to the rich. It used to be that the populace band pleaded for populace causes, now they echo the words that they hear from the rich.

 

[ChristsSoldier115]

They definitely need to overhaul the tax program. Tax refunds shouldn't exist. You shouldn't be giving back money because your system's math is bad. It shouldn't be gone to begin with.

 

[ThatRobGuy]

No sir, this thread has nothing to do with providing financial aid to those "struggling" families that have two flat screen TVs and can already pay for all their essential needs without any government help. If the poorest families in America, could get an education for their children, had a secure access to food, were sure they could get medical care and other essential needs met, and could do this without going helplessly into debt, all while owning two TV's and two cell phones, and all without a single government program to help them, then nobody would be here arguing that we need government programs to help.

My post was in reply to "the middle class is getting worse off" post.

But in regards to your post,
The problem with saying that "a person's minimum needs should have to be met regardless of their situation" is that for a large number of people, that would remove their motivation to work.

There are plenty of people who would be content to collect a check every month to cover the minimum essentials, and do nothing more.

I have no problem with the concept of helping people out, I would just like to see more accountability for starters.

In a report out of Washington DC (covered by the Washington Post):
...found that 9.6 percent of people in families receiving some type of government assistance reported recent drug use

Only about one in five D.C. welfare recipients able to work did the necessary job searching required by law to be eligible for government payments in fiscal year 2012, according to Mayor Vincent Gray's budget proposal.

Those requirements can include job training classes or participating in community service activities.

Just 22 percent of welfare recipients whose cases are managed by private vendors -- a majority of those receiving federal funding in the District who have been determined eligible to work, according to the D.C. Fiscal Policy Institute -- met federal guidelines. That's even lower than the District's 26 percent target...



We were discussing earlier whether or not programs are failures...I think the information above is very telling.

So we give free money to people, all we ask in return is that you don't do drugs, and you fill out 1-2 job applications per month (or go to a 2 hour training session or do community service 1 weekend a month)...and only 22% of the people follow those rules. (and 10% of them actively use drugs).

What's even sadder is that the target goal is 26%

How can a program be considered even remotely successful when the standards are that low?

Would we consider our fire department "a success" if they only answered the phone 1 out of 4 times when called?

 

[doubtingmerle]

So we give free money to people, all we ask in return is that you don't do drugs, and you fill out 1-2 job applications per month (or go to a 2 hour training session or do community service 1 weekend a month)...and only 22% of the people follow those rules. (and 10% of them actively use drugs).

I understand that the welfare system is a mess with no easy answers. On the one hand you have people taking the free handouts without giving back to society, and on the other hand there are children being raised in poverty through no fault of their own that need our help. So how do we help the suffering children, without pandering to the desires of the lazy? There is no easy solution.

No program is easy. Kids use their free public schooling as a place to buy drugs. Unions take advantage of their position, and disrupt industry with needless rules. There are times when a person is in training and minimum wage does not make sense. Nobody said these solutions are easy. We cannot solve the problems by simply throwing money at them. But we can help, and with effort, we can improve the effectiveness of what we do.

The rich get richer and the poor get poorer. At least they have since 1979 in America, and they had in the early 1900's. But from 1945-1979 the opposite occurred. All classes had rising incomes in those days, with the incomes of the bottom 20% rising slightly faster than the top 20%. If the rich had always been getting richer, and the poor always poorer, where would we be today? The success of that period did not just happen without government intervention.

So I think we need a variety of programs, as we had from 1945-1979, and yes, it takes a lot of scrutiny to make sure we get the most bang for the buck. But it can be done.

 

[ThatRobGuy]

So I think we need a variety of programs, as we had from 1945-1979, and yes, it takes a lot of scrutiny to make sure we get the most bang for the buck. But it can be done.

...but does the government have the kind of resources to provide the kind of scrutiny that really needs to be in place to make programs like that efficient?
(that's not a knock on government, that's just purely a matter of sheer numbers)

As of the end of 2012, there are 109,631,000 people living in households that are receiving welfare benefits. There's literally not enough government case workers to handle that kind of load...and if there were, we'd be paying so many cases workers that we negate any progress made by weeding out the welfare abusers. It's a catch-22.

This problem, like many other problems, first involves making sure that we're asking the right questions.

When faced with the problem of "we have too many poor people, how do we fix it?", we shouldn't be considering inequality, we should be considering ways to get the poor in a position where they can make more money.
(IE: the reason people are poor isn't because some other people are "too rich")

Clinton was starting to hit on that a little in the late part of his presidency with some of his educational programs (that happened to coincide with the welfare expenditures dropping).

The best way to "take" money from a rich man and "give" it to a poor man is to give that poor man the right job skills that puts him in a position where that rich man wants to pay him $60k to come work for him...not by tinkering with tax brackets. Redistribution via taxation is an endless cycle because it's not solving the root problem...that problem being "the poor man doesn't have the right qualifications to earn a good living". I'd much rather see a program in which assistance is paid out after the conditions are met instead of before.

Right now, a person collects the check first, and then gives society the finger when it comes time to go out and get the job training, but that doesn't stop the check from coming next month.

I'd rather see it operate like this.
Attend the job training class, take a test to make sure you were actually participating, and if your test grade comes back okay, then you get your check.

 

[doubtingmerle]

...but does the government have the kind of resources to provide the kind of scrutiny that really needs to be in place to make programs like that efficient?
(that's not a knock on government, that's just purely a matter of sheer numbers)

As of the end of 2012, there are 109,631,000 people living in households that are receiving welfare benefits.

You seem to have a broad definition of "Welfare". Traditionally it has meant only what is called "Temporary Assistance for Needy Families", which averages less than 5 million people on the rolls for any given month. You may also be including Social Security Income and Medicaid recipients, but I don't think their total comes anywhere close to your figures. So the problem is much more manageable then you define.

When faced with the problem of "we have too many poor people, how do we fix it?", we shouldn't be considering inequality, we should be considering ways to get the poor in a position where they can make more money.
(IE: the reason people are poor isn't because some other people are "too rich")

Making more money does nothing to increase the number of goods and services to spend it on. So how is getting the poor to make more money going to fix the problem unless it increase the supply of goods and services the same amount?

So if there is no increase in goods, and if the rich have an ever increasing percent of the available money to bid on the available goods, then yes, income inequality is a problem. And in our finite world, with a limited amount of raw materials available, significantly increasing that total number of goods may not be possible. Many agree with me that we are at or near a point of "peak prosperity" which means the total GDP of the world will never get a whole lot better in terms of real value. At best, we could increase the amount of goods by several percent a year.

We have been trying to increase the GDP for centuries, and it is what it is. If you suggest that if only we put your policies in place the GDP would skyrocket, then don't be surprised if some people are skeptical.

The best way to "take" money from a rich man and "give" it to a poor man is to give that poor man the right job skills that puts him in a position where that rich man wants to pay him $60k to come work for him.

They are going to pay dishwashers and hotel room cleaners $60K? I don't think so. Somebody needs to do all those low-income jobs. And as long as they pay wages below poverty level, the problem persists.

not by tinkering with tax brackets. Redistribution via taxation is an endless cycle because it's not solving the root problem...that problem being "the poor man doesn't have the right qualifications to earn a good living".

"Tinkering with the tax brackets" and other fixes allowed the poor to enjoy the same percentage gain in income as the rich from 1945 - 1979. As we abandoned many of those policies, the poor started losing real income as the income of the rich simultaneously skyrocketed. It is difficult to see how anything you suggest would give us the results we had seen before 1979.

 

[whatbogsends]

The best way to "take" money from a rich man and "give" it to a poor man is to give that poor man the right job skills that puts him in a position where that rich man wants to pay him $60k to come work for him...not by tinkering with tax brackets. Redistribution via taxation is an endless cycle because it's not solving the root problem...that problem being "the poor man doesn't have the right qualifications to earn a good living". I'd much rather see a program in which assistance is paid out after the conditions are met instead of before.

The "rich man" (business owners) want to pay as few people $60K+ as possible, and wants to keep labor wages down (and have been successfully doing so).

If everyone has "the right skills" to qualify for a job which now pays $60K/year, what you'll see is that job is now only worth $30K, because they have more than enough people able and willing to do that job. It's supply and demand, and if the supply of good workers increases, the wages for those workers will decrease. Basic economics.

 

[ThatRobGuy]

The "rich man" (business owners) want to pay as few people $60K+ as possible, and wants to keep labor wages down (and have been successfully doing so).

If everyone has "the right skills" to qualify for a job which now pays $60K/year, what you'll see is that job is now only worth $30K, because they have more than enough people able and willing to do that job. It's supply and demand, and if the supply of good workers increases, the wages for those workers will decrease. Basic economics.

Okay, so what do you propose as the fix? If getting people at the bottom end of the pay scale additional training is viewed as a negative (because that means they'll provide competition for the $60k jobs), then what exactly are you wanting to happen? Do you want to just keep them in unskilled positions and keep patronizing them with minimal wage increases? "Give the hamsters an additional carrot every once in a while to keep them content with living in the cage" sort of thing???

I'd much rather have those guys get quality training and compete for my job, thus removing much of the need for welfare and thus lowering taxes. (and in the long run, lowering prices)

 

[whatbogsends]

Okay, so what do you propose as the fix? If getting people at the bottom end of the pay scale additional training is viewed as a negative (because that means they'll provide competition for the $60k jobs), then what exactly are you wanting to happen? Do you want to just keep them in unskilled positions and keep patronizing them with minimal wage increases? "Give the hamsters an additional carrot every once in a while to keep them content with living in the cage" sort of thing???

I'd much rather have those guys get quality training and compete for my job, thus removing much of the need for welfare and thus lowering taxes. (and in the long run, lowering prices)

I absolutely think we should be working to train and employ more people. That being said, most of the people who receive government aid are working, but they aren't earning enough to live off of. That being said, improving the skills of 1 person increases that person relative to the market and increases their earning potential. Improving the skills of every person doesn't improve their position relative to the market, and we see the increased productivity of the worker being claimed by the owners/CEOs of that company. This has been precisely what has happened over the last 30 years.

Wage structures only changed in the US when there were A) strong, minimally corrupt unions and B) the government supported change through measures such as minimum wage laws. With an international economy, large corporations (who are the worst offenders of paying people significantly less than they produce) are able to circumvent these efforts by shipping labor to other markets where worker protections are less and expected compensation is less.

I don't know what the solution is, other than eliminating loopholes that allow corporations to escape their tax burden. In any situation where the vast majority capital is owned by very few, capital can be leveraged in bargaining. This has borne itself out throughout history.


While wages have stagnated (or regressed in terms of real value) for the average worker, wages have skyrocketed for those at the top.

It had been that the US was paying their CEOs 100-300X the wages of their workers, while Japanese & European CEOs were paying their CEOs 8-15x the wages of their workers, although over the last decade, Japan and Europe have been "catching up" to US wage structures, due, in part, to the globalization of markets.

"The average worker earned $41,861, while the average CEO made $10.9 million, or 262 times that of the average worker.

From 1992 to 2005, the average CEO saw his or her pay rise by 186.2%, while the median worker saw wages rise by 7.2%.

The ratio of total CEO compensation to average worker pay rose from 24:1 in 1965 to 262:1 in 2005

CEOs in the U.S. earn more than two times the average of CEOs in other wealthy countries. But other countries are catching up: Since 1988, CEO pay in many countries rose as fast as or faster than in the United States."

Facts & Figures: Executive Pay . NOW | PBS

Related:

U.S. Corporate Executives Aren't the Only Ones Making Tons of Money - The Atlantic

 

[doubtingmerle]

If getting people at the bottom end of the pay scale additional training is viewed as a negative (because that means they'll provide competition for the $60k jobs), then what exactly are you wanting to happen? Do you want to just keep them in unskilled positions and keep patronizing them with minimal wage increases?

Assistance in job training is good, and is just one way that the government can help.

It looks to me like you put too much confidence in job training, while practically eliminating other government measures like Social Security, Medicare, Medicaid, Unemployment Insurance, effective unions, progressive income tax, and minimum wage. If a little job training could eliminate the need for all those programs, that would be great, but in the past we have seen that fighting gross income inequality requires effort on many fronts.

 

[Viren]

Actually you appear to be saying the lack of government action causes it. For many here want to eliminate any trace of higher taxes on people with higher incomes. You are recommending a policy of progressive income tax, which has been a fundamental policy to limit inequality in America for a century. But now the angry populace with pitchforks are screaming that they no longer want the government to give them a break on taxes compared to the rich. It used to be that the populace band pleaded for populace causes, now they echo the words that they hear from the rich.

Yeah, progressive taxes would help the inequality and government debt issue. I think there are plenty of people banding together to support it, but the politicians aren't really working for the majority of people. Just look at how they're trying so hard to push through bank bailouts and the keystone pipeline. Things are going to have to get a lot worse, before we see any real change imo.

 

[doubtingmerle]

Things are going to have to get a lot worse, before we see any real change imo.

I think you are right. People have forgotten how much government was needed in the past. The popular notion is that if we get the government small enough to drown in a bathtub then all will be well. If only people would realize these things do not happen by themselves.

 

[ThatRobGuy]

Assistance in job training is good, and is just one way that the government can help.

It looks to me like you put too much confidence in job training, while practically eliminating other government measures like Social Security, Medicare, Medicaid, Unemployment Insurance, effective unions, progressive income tax, and minimum wage. If a little job training could eliminate the need for all those programs, that would be great, but in the past we have seen that fighting gross income inequality requires effort on many fronts.

It's not that I'm putting too much confidence in job training...In my opinion, I'd say that people put too little confidence in their fellow citizen to utilize that job training. When I say training, I'm not talking about a weekend vocational course, I'm talking about something that can give people real job skills.

For example, training for the IT field, if a person did 1-2 years of tech training in any field of tech they choose (networking, software, etc...), I'm confident that they could walk out and land a job in the tech field, earning a living wage, within 4-6 months of completion (if they live in a market like Akron which is where I work), even sooner...there are recruiters for companies actually going to tech vocational places and colleges and cherry picking kids before they even graduate.

Another aspect of the problem that has yet to be discussed are the vast number of people, who do have an education, but in something that's not a practical job skill (IE: majoring in art, philosophy, etc...). Many of these folks don't land jobs in the field they trained for, and thus, end up in the realm of people competing over retail jobs and thus saturating the unskilled labor market, which in turn will lower in the pay for anyone going for those jobs.

You mention effective unions...the problem I've always had with unions is that a union that is powerful enough to be "effective" is also a union powerful enough to abuse the system...not saying all unions do this, but I think we can agree that there are a large number that do.

 

[doubtingmerle]

For example, training for the IT field, if a person did 1-2 years of tech training in any field of tech they choose (networking, software, etc...), I'm confident that they could walk out and land a job in the tech field, earning a living wage, within 4-6 months of completion (if they live in a market like Akron which is where I work), even sooner...there are recruiters for companies actually going to tech vocational places and colleges and cherry picking kids before they even graduate.

There may well be many opportunities for people with the right training. But if millions trained and applied? Pay would surely come down. If the goal is to eliminate most of the poverty, and eliminate most of the programs discussed here, while leaving all with much higher wealth, then this surely cannot do all of that. But yes, accessible training is a big part of the solution.

Anyway, it is good that we can agree on the value of the government helping people to get training that can lead to better jobs.

 

[doubtingmerle]

I didn't ask if the Constitution enumerates those powers. What I asked is: why is it that people write something on a piece of paper, call themselves "government", and suddenly it's ethical for them to do what they could not ethically do before. After all, a 'constitution' is just a piece of paper where I've written down "I get to do these things"; no different from my government badge example that you called silly. Your response was to say "Well the Constitution says a,b,c.." I never asked what the Constitution says.

Interesting. I never thought I would get a response like that out of conservatives. But yes, to support the view that governments may not tax people to do things to promote the general welfare, one needs to demote the constitution to a meaningless document that gives no authority to the government that is based on it.

We live under a constitution. Most of us think it is best to continue to live under that constitution, with the right to amend it as needed. And so it is valid, because we choose to make it valid.

Do you too choose to keep it valid?

So unless you are willing to throw out all the constitutional right to tax, including the right to tax to fund an army, or to build roads, then one cannot just pick one use of tax and call that "stealing". If it is stealing to take tax money to give grandma a room and warm meal, then it is stealing to take tax money to bomb ISIS. I contend that neither of these acts is stealing.

The only way folks can make their point that taxing for a purpose they disagree with is stealing is to resort to shredding the constitution. Interesting.