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Americans Still Have NO CLUE About How Much Inequality We Have
Even years after the Occupy protests (hate 'em or love 'em, they focused everyone's attention on inequality), Americans are still clueless about how much inequality we really have in our country.
As we noted in 2011:
Dan Ariely of Duke University and Michael I. Norton of Harvard Business School demonstrate– Americans consistently underestimate the amount of inequality in our nation.
As William Alden wrote last September:
Americans vastly underestimate the degree of wealth inequality in America, and we believe that the distribution should be far more equitable than it actually is, according to a new study.
Or, as the study’s authors put it: “All demographic groups — even those not usually associated with wealth redistribution such as Republicans and the wealthy — desired a more equal distribution of wealth than the status quo.”
The report … “Building a Better America — One Wealth Quintile At A Time” by Dan Ariely of Duke University and Michael I. Norton of Harvard Business School … shows that across ideological, economic and gender groups, Americans thought the richest 20 percent of our society controlled about 59 percent of the wealth, while the real number is closer to 84 percent.
(Indeed, even those who assume they're educated about inequality may not realize that we're at lord and serf levels.)
Ariely subsequently explained that both Republicans and Democrats are passionately opposed to the degree of inequality we have in the U.S. ... but that politicians may be trying to make us think we’re more equal than we really are (The media and Wall Street are also trying to hide the size of the gap).
Les Leopold reports today on a new study which confirms how clueless Americans are about inequality:
A[n] important study ("How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay") by Sorapop Kiatpongsan and Michael I. Norton provides insight on why Americans aren't more upset about rising inequality: It shows we are clueless about how bad it really is. Their analysis of a 2009 international survey of 55,187 people from 40 countries, found that when it comes to understanding the severity of inequality, we're the most clueless of all.
Americans are virtually blind to the growing gap between CEO pay and the pay of the average worker. As the chart below shows that gap has increased dramatically. In 1965, for every dollar earned by the average worker, CEOs earned 20 dollars. By 2012, that gap mushroomed to 354 to one.
But, when asked in the survey, Americans grossly underestimated this gap. Instead of 354 to 1, the Americans in representative survey think it is only 30 to 1. When asked what the ideal pay gap should be, Americans say that a fair gap would be about 7 to 1.
More amazing still, the survey results, combined for all countries, show that the misconception of inequality doesn't significantly vary by age, gender, income, political leanings or education.
To see if these finding also hold for the U.S., I waded into the database: Does political affiliation and education impact how the 1,581 Americans in the survey estimated the wage gap? (The data comes from the International Social Survey Programme: Social Inequality IV - ISSP 2009 on the website Gesis. )
As the chart above shows, "Strong Democrats" estimated that the actual ratio between a CEO of a large corporation and an unskilled factory worker was about 36 to 1. "Strong Republicans" said it was 40 to 1. A difference without a distinction.
When it comes to offering opinions about what the wage gap should be, the Strong Democrats thought 5 to 1 was about right, while the Strong Republicans thought it should be about 12 to 1. The two political extremes obviously are much closer to each other than to the current reality of 354 to 1.
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When it comes to our ignorance of the pay gap, there are no blue states, no red states -- only misinformed states of mind. We're the Know-Nothings of inequality.
Why are we so blind to inequality?
Most of us have no idea that our golden land of opportunity is the runaway leader among developed nations when it comes to inequality, (see chart below.) This dubious distinction runs counter to American Dream that we've been indoctrinated with since birth. As a result, we reflexively think that America is epitome of democracy -- the fairest most just and most upwardly mobile country in history. That makes it hard for us to account for why we are more unequal than all these other countries. So, I suspect many of us just tune out the data. It's too jarring to the deep-seated doctrines that comprise our national identity.
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We may still be living with this cultural hangover and operating from a societal self-image from yesteryear. We are likely to cling to it for quite awhile, in part, because it's comforting as new economic insecurities take hold. As workers from other nations pass us by, we look in the mirror and still hope we are the fairest of them all.
And see this.
Postscript: Occupy organizer David DeGraw says that - if people knew how much inequality we really have - they would revolt. He may be right.
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There were many who argued that Ground Zero for OCCUPY should have been D.C. but I think the movement focused peoples attention, or should have focused, to the fact that it's Wall Street's ability to buy the politicians that is the main monkey business. Increasing inequality is one of the stunning symptoms of the disease.
Plato stated that 'no man is worth more than three times another man', but the oligarchs were never educated appropriately and neither were their
employees. Investment Banking has always been a predatory business and
will engage in violent behaviour if their turf is threatened. Occupy Wall Street protestors were targeted by the FBI/CIA/MIC and these Police State
entities even went as far as considering assassination of the Occupy Wall Street activists at the behest of Wall Street Investment Bankers. Furthermore, the public education system does their level best to discourage knowledge of mathematics by conditioning students in society
to give up on a career in math if they are not scoring A+ on math exams. Mathematics is puposely made difficult to learn so that few individuals in society can grasp the more complicated structures and processes that the Investment Banking industry depends on to conceal their criminality and oppressive monopolistic practices from the masses.
Marxists uncover the structure of economic oppression and the Roman Catholic Church, Western Governments, and Primary/Secondary Education ensure that the masses are kept ignorant through elitest programming in education that serves elite interests above and beyond
the interests of the masses. The masses must be kept ignorant through media, education, religion, government, and secret schemes to undermine information attainment through a lack of funding on the part of central planners in the administration of education. In brief, follow the money and you will see who the system invests in and who the system chooses not to invest in over time. Over the last 50 years in
America, the government has chosen to invest in primarily young white males as opposed to any other particular cohort in society. And this results in a system wide skew towards the Investment Banking cohort
that we see today with all their requisite inequality over numerous dimensions of demographic interests that are under-represented in the discourse of the problems we face as a collective plurality.
Don't like CEO pay? Don't buy stocks. Save your money after-tax. Screw the funds. Screw the finance industry. Screw you crybabies.
Dood, the major purchaser of stocks these last several years have been the corporations and banks, thanks to QEI, II, III . . .
I wonder, since this refers to "Wage Gap" if CEO/Mgnt Bonus Pay is included, because its not included as far as Corp Tax goes.
This began in the Clinton years when Bonus Pay became the real"Income" maker...one examle I'll paste:
How America's CEOs Are Getting Rich Off TaxpayersAccording to a recent Public Citizen report, the top 20 highest-paid CEOs received salaries totaling $28 million, but had deductible performance-based compensation bonus totaling over $738 million. Assuming a 35 percent tax rate, that’s a $235 million unpaid tax bill. The Institute for Policy Studies calculated that during the past two years, the CEOs of the top six publicly held fast food chains “pocketed more than $183 million in performance pay, lowering their companies’ IRS bills by an estimated $64 million.”
Half a Billion $$$ to Bill gross and El Erian should give the Peeples a clue how magnificent the inequality is between those --athletes, Hollywood, Wall Street--- and the average Joe.
We need to smoke the right 1000 people
Inequality is not the same as injustice.
When the rich are rich through extreme cleverness, luck, or hard work, more power to them!
When the rich are rich through fraud and theft, they belong in prison.
For what it's worth, I'd put Wall Street and our whole Financial Sector (led by the central bankers) in the latter category.
Some years back, TV/home icon, Martha Stewart, was convicted under 18 U.S. Code 1001 and sent to jail.
Now, after the latest article by Matt Taibbi in the Rolling Stone, it has become obvious that Jamie Dimon, CEO of JPMorgan Chase ("Chase"), under testimony before the Financial Crisis Inquiry Commission, also violated this law.
Also from Chase, William Buell, during testimony before the FCIC, likewise violated that law.
Yet, we have seen nothing in the news about the FBI arresting either of these two banksters?
(You said: When the rich are rich through extreme cleverness, luck, or hard work, more power to them! With the exception of the lady who found Spanx, you must show us who these clever rich are sometime?)
Under the conditions of actual liberty any economic inequality would be the result of an individual helping others more successfully. Creating wealth and gathering assets would be fairly easy. In our world this is not the case. Using the power of the government's gun thugs who follow orders, cunning predators create systems of control which keep the masses in poverty, focused on the lowest tier of Maslow's heirarchy - pure survival. As Rockefeller said, "Competition is a sin."
Occupy organizer David DeGraw says that - if people knew how much inequality we really have - they would revolt.
Of course he says that - it's all he knows. Move from one purpose-less revolt to the next - all in the name of a John Connor type glory seek.
Millionaires and Billionaires, a term often used by President Obama, screams "I have an agenda", the way he uses the term is both offensive and a simplification. Only a crazy person or someone with very little knowledge of money or wealth would think that linking, comparing, and putting the two into the same class has merit.
Across America and the world there are millions of working class millionaires. They do not have private planes or servants, they worry about their financial survival and many work far more hours then the average American worker. More in the article below concerning why anyone with a million dollars, or even several million dollars is not in the same league or class as someone with a hundred or several thousand times as much wealth.
http://brucewilds.blogspot.com/2013/02/millionaires-and-billionaires.html
Great point. And the anarchists' agenda is to highlight any such differences in order to spark the revolution they so desperately seek.
Jack Nicklaus had a great quote when once asked why he nearly always beat Arnold Palmer in match play:
Arnold Palmer is focused on beating Jack Nicklaus, while Jack Nicklaus is focused on playing good golf."
A million dollars ain't what it used to be. 20 years ago it was ten good houses. Now it is one, maybe two if you're lucky.
Did you mean houses, or members of the house?
Using your latter metric, you can't even buy one "good" house!
A twenty spot is better than no twenty spot especially if the boss-man acknowledges us out on the floor.
They run the company and should get paid 357 more times than us.
The boss took the risk, we are looking for a wage.
Pleather boots don’t taste THAT bad, try it.
It's all good because some enterprising entrepreneur is gonna come along and be CEO for 356 times the rest of us and then he'll undercut the other CEOs and steal all the marketshare and the 357xCEOs will all go broke and life will be fair again. Good ol' fwee markits to the rescue.
And if it doesn't happen it's 'coz the 357xCEO iz worth it 'coz he worked 30 000 hours per week and took on huge risks with his own-someone-else's munny and only got bailed out when the gummint forced him to take all that munny which he did out of the goodness of his heart becoz he wanted to save the mericn jawbs which woz only possible if he gave paycuts to his workers becoz the unions are too powerful and then sent the jobs to Mexico becoz he had to stay competitive and he had to keep getting bigger bonuses becoz he iz a management genius and the world could not possibly live without him becoz of hiz geniussness and he needs the munny to keep him incentivized 'coz otherwise he might not share his geniussness with the world no moar.
Now does I get a treat?
The biggest inequality in America is between the intelligent and the stupid, ie this "George Washington" socialist propagandist.
SIC- long time no see. I agree there is a difference between the intelligent and the stupid but I would not include George in the latter. In my opinion the article is not saying there should be no difference in pay- it is trying to highlight how absurd this difference has become.
I think the problem is that the financially intelligent are shooting themselves in the foot by destroying the very system that they have profitted from. SIC, can't even a tiny part of you admit that the growing inequality could manifest into something ugly if the "stupid" are pushed too far. What about the system? If another Depression occurs and all the indicators are present- rich getting richer, investing turns to specultion, soaring market credit, lagging business investment- do you think the U.S. will be able to recover its place in the world? Or do you think China will be annointed as the model? There is a vast difference in the level of financial sophistication in the world today as compared to Great Depression times. There still are a great many "stupid" people out there but the internet is easy to use. Communication is instantaneous and numbers matter.
I can't speak for George, but I myself feel it is time for the financially intelligent crowd to re-evaluate the situation-ease up a notch and throw the "stupid" people some slack. Either their wages have to go up or the top's wages have to go down. Balance it out or the system will go down. You know I don't mean even steven. I am no socialist.
Peanut allergies?
I got teached an American never does consider himself as poor, just not be a millionaire actually.
All but not this that anyone dedects the real pleasure behind the mirror I'm rich.
To tell the people the heat of inequality that makes the beans jumping higher that got roasted over the fire and not back green as maybe assumed.
A real, not a moral subject.
How many hours per week must you work in order to simply have some land on which you are allowed to sleep?
How many hours per week must you work in order to eliminate the hunger in your belly?
How many hours per week must you work in order to provide for the other overheads of life - health, clothing, warmth?
How many hours per week must you work in order to meet the minimum of society's standards of "acceptability"? (Yes, yes, this one is a judgement call as some will insist that they have to keep up with all the latest fads in order to "fit in" but the bottom line is that if you show up anywhere filthy, ungroomed and naked then people are going to give you a hard time, no matter how "tolerant" they claim to be.)
HOW MANY HOURS PER WEEK DO YOU SPEND INVESTING IN "HUMAN PROFIT" AS OPPOSED TO SIMPLY SORTING OUT THE OVERHEADS OF LIFE????????
I don't care whether you spend your free time surfing, skating, dancing, painting, building new flying machines, acting or whatever. You work, but do you create? Do you enjoy? Do you have a "profit" to justify your existence? Or are you just the walking dead?
Yes, who cares if everyone else is a billionaire or trillionaire and you are only a millionaire AS LONG AS YOU HAVE THE HOBBIES AND FUN ALONG THE WAY. And yes, if you're happy bush-walking or sleeping in your spare time then that is good too.
So yes there does come a point where inequality doesn't matter, but I don't see that point anywhere in the world I live. I see a lot of productive people working their guts out and getting stress and misery in return. I see factories full of people working very hard and scratching to provide the basics for themselves, even though they operate machinery that lets them produce the work of a hundred men.
You will know when inequality no longer matters. The poorest workers will still have the time and the resources to have fun.
'Historical cycles: Are we doomed to repeat the past?' http://bit.ly/1wQgKqN
^^^^^^^^^^^^^ THIS ONE !!!!!!!!!!!
I've seen that message before but that vid is an excellent presentation of it.
" if people knew how much inequality we really have - they would revolt"
what do you mean, "would"?
people are already revolting.
Very, very few people care about wealth inequality - the evidence of that is the real insight of GW's "article". They are focused on their own lives. Only when anarchists parachute in and rev them up - always with the same antidote (revolt) - do they get in a bunch about such things.
Where ? EBT card keeps the lowest 20% too fat to revolt... and the 20-40% just hang in there as things get worse. I don't see the revolting of people (yet), but it will come. Someday, somewhere it will start and spread like a bush fire across the land. But it's not time yet, IMHO.
Best way revolt is to buy silver (fizz only). It's cheap, easy, and peaceful. Is that what you meant?
Anyone who wants to determine how much is the "fair" amount to pay anyone has a big problem. Any ratio, be it 12:1 or 354:1 should simply reflect supply and demand. When those two curve intersect, that is the fair price for either labor or goods. That's true of what the fair price of a gallon of milk is, or the price of money (the interest rate). The only problem that occurs is when a monopoly supported by force (the government) suppresses competition and forbids price discovery (e.g. our current equity and bond markets). Our favorite example on ZH is the FED which is a cartel suppressing both banking competition and competition for money by setting arbitrary (i.e. non-market) interest rates.
How much should Lebron James be paid? Exactly what he is paid since if he felt underpaid he would offer his services to some other team, and if some other team felt he could add value to their basketball entertainment product they would offer him more. Actual ratios are quite meaningless and completely arbitrary-even a 2000:1 ratio in a fair market competition is perfectly OK. Even the most poor person today is living better than aristocrats did 200 years ago. That's due solely to science and technology-actually impeded by government interference. Remember that each time you don't have to go outside to take a crap.
I've heard you before; when you spew forth publicly, you have this extremely low-class twang, right?
Good boy. Now Sit! Roll over! Lay Down! Beg!
Pay no attention to the tent cities. Those people chose to live that way. They deserve it. Besides, their clothes are still nicer than 100 years ago.
Yep. They didn't have empty 55 gallon drums left over at construction sites to take and burn stuff to heat some water and warm their hands in under nice solid concrete bridges back then and they do now... so there.
They Live, movie gives a better picture of today's amerika than any I know of...see it here
https://www.youtube.com/playlist?list=PL3C83EBD77B550B04
354:1 = 35400% = 3540000bps
Is "money" the only measure.
My Cuz JC would say NO.
Let's change that, and everything else.
That means responsibility, that means US.
Oops!
In any economy, society, there will be those at the top, and those at the bottom.
If an economy is expanding in line with population growth and also increasing productivity, ALL "boats" will rise. Even if you dig ditches and implement no productivity increases, you will find your pay going further due to falling prices because of more goods and services being produced per supply of money.
If some are "printing," stealing, they destroy the returns on capital and labor, and only they, those receiving, or those closest, to the counterfeiting will see their "boats" rise.
So it is NOT "inequality," but the symptoms of plunder that we are seeing--it is only "inequality' if one considers the positions of various groups near the "printed" lucre.
An American, not US subject.
Or, to phrase it another way, in EVERY jobless recovery over the past few decades (we are officially in the fourth, but really the fifth or sixth), each time ONE-FIFTH OF THE U.S. WORK FORCE is laid off.
Amazing, such precision in layoffs, huh?
Good Explanation.
Not counting the homeless, who are either mentally ill or such assholes that everyone else in their family refuses to deal with them, the bottom quintile have access to clean water, a roof over their head, air conditioning, central heat, color cable TV, cell phones, and access to more cigarettes and alcohol than the wealthiest slave owner. Their number one health issue is obesity.
200 years ago, stupidity was fatal. today it still is, only delayed enough that most still seem to pass on their genes before expiring prematurely.
Want for that which one cannot afford makes you a) a miserable son-of-a-bith and b) a victim of Madison Avenue. People all over the world strive to become American. Within 10 years of arrival, the lose that spark that made them exceptional as an individual ans within three generations, their offspring can no longer function in the absence of air conditioning.
You are so full of shit and out of touch, keloid, you must be a chatbot or mentally deranged!
Read the Census Bureau's numbers sometime, assuming you can read?
Inequality in America today is twice as bad as in ancient Rome, worse than it was in Tsarist Russia, Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America.
Thanks for playing.
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Bravo!
•J•
V-V
Not counting the homeless, who are either mentally ill or such assholes that everyone else in their family refuses to deal with them, the bottom quintile have access to clean water, a roof over their head, air conditioning, central heat, color cable TV, cell phones, and access to more cigarettes and alcohol than the wealthiest slave owner. Their number one health issue is obesity.
200 years ago, stupidity was fatal. today it still is, only delayed enough that most still seem to pass on their genes before expiring prematurely.
Want for that which one cannot afford makes you a) a miserable son-of-a-bith and b) a victim of Madison Avenue. People all over the world strive to become American. Within 10 years of arrival, the lose that spark that made them exceptional as an individual ans within three generations, their offspring can no longer function in the absence of air conditioning.
We have been grubered
We have been "Zionist-ed."
An American, not US subject.
"Not all Zionists are Jews."
Because in amurka, financialization is king, all money all the time, tanks that catch fire, rules made to be ignored by the wealthy, constant propaganda about our exceptional flag-waving, indian-genocidal, world polluting, racist 19th century false god justifying, city on a hill. we are that darwinian survivor that calls evil in everything done by anyone else, but can't concieve of our own history being other than pure.
I hope, from a selfish point of view, that when we goad the russians into a real mans war, that the nukes come quick. This american built world is quite disgusting in nearly every detail.
CEO pay is not a sign of inequality - the signs appear when you see inequality in action. I am more upset that big banks manipulate and lie, then go unpunished, than I am the amount of pay a CEO gets. I am upset at airports where TSA - a government agency - has special 'short lines' for flyers with the right connections. I am upset when Buffett brags about paying less income tax than his secretary - then sets up plans so he shelters his wealth from taxes when he dies, and helps companies like Burger King dodge taxes.
These things - legal (I suppose) - but wrong nonetheless - are where inequality shows a much uglier side than just pay.
When corruption gets especially bad, people throw their arms up and accept a flat tax, only because they will be raped a little less than those progressive solutions that were designed to help them.
We probably spent 10-15% of our GNP avoiding taxes. This is unsustainable as a country.
Countries like Slovakia switched to a flat tax not because they are good but because they are harder for the .1% rich to cheat. They are working better than what we have...