This page has been archived and commenting is disabled.
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.
***
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.
***
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.
- advertisements -


Not paying taxes, extortion, is smart. "Cheating" is their meme.
Every dollar not pilfered by government, is a dollar enjoyed by the producer of that wealth, and support of the producers that he patronizes. And a dollar denied to the MIC and banksters. It is not "cheating."
Those that own and control the government don't pay taxes. They pay rebates on what the government enabled them to steal.
Flat tax or not, who wants to keep being extorted to pony up to support tyranny at home, and war-crimes abroad?!
An American, not US subject.
Now banksters that kill themselves, do cheat the guillotines.
Can we try to look deeper than just onto the surface?
Inequality is a symptom, not a cause.
"Can we try to look deeper than just onto the surface?" Sure, lets look at trade policy... oh wait no one wants to talk about THAT!
These people are standing on top of the heap and any time someone comes near trying to climb where they are they get kicked in the head.the pile underneath gets bigger and people with headaches keep multiplying which is just a way for the elite to sell more headache medicine. So if you have a headache, what can you really do but spend your money buying the medicine?
Israel got into the U.S. knickers long before Japan and China. Milestones
In 1950s america the average man could provide for his family, vacation, & save. He could do this because we were an industry driven economy.
NOW WE ARE SCUM SUCKING CONSUMERS WHO SOLD OUT TO JAPAN AND THEN CHINA. WE'RE GONNA GET EXACTLY WHAT WE DESERVE.
hey, we got a couple of panda bears from china in the 1970's, they got our manufacturing sector ... who did that? Politicians following orders from their monied masters
"you cannot strengthen the weak by weakening the strong."
- Abraham Lincoln.
Lincoln was a war crimminal.
The government is largely responsible for inequality.
For example, MIT economics professor and former IMF chief economist
Simon Johnson points out that the government created the giant banks, and they were not the product of free market competition.
US law doesn't allow corporate owners, stock holders, to have a controlling vote on compensation; only, a non-binding advisory vote. The government's rules: http://www.investor.gov/news-alerts/investor-bulletins/say-pay-golden-pa...
Using the term "government" is a mistake -- you don't live in a nation of the governed, you live in a nation of corruption surrounded by the spineless, while organized crime Inc is now insulated two generations deep using "government" as the shield and stupidity as the sword. Hidden in plain sight.
The good has been squeezed out of the USA. Pick a meme -- morality, justice, fairness, freedom -- all lies.
Millennials and X'ers will live to see the decimation of inaction.
There is exactly two ways out - decentralized power through State's rights, or burn DC to the ground and kill everyone in a suit.
Wasn't there an article on ZeroHedge recently that showed how much money the average worker gives up hourly to 'pay' the CEO in 25% of his or her pay? Wasn't it something like 1c to 1.5c per hour? (Correct me if I'm wrong.) Not to say this level of (for lack of a beter word) 'inequality' shouldn't be scrutunized but would that small amount make that much difference? And is this something the government should control - as the arguments suggests in a roundable manner?
And doesn't the government really want CEO pay to be concentrated into fewer higher paid people because they end up being in the highest tax brackets (and make those politcal donations!) which the government needs to maximum the tax take?
Consider, too, that when the inevitable crash of grossly inflated assets occurs there will be a lot less 'inequality' and it won't be the 'poor' that paid the price. But there may be a lot less money flowing into the coffers from the rich to the government (natch), to those gettin' the checks.
If the wages were more spread out ie. less Ceo and directors salaries and more of the money paid to the workers more would be spent into the system and the velocity of money would be greater, compared to paying it to the board of directors/Ceo's that either hoard the money or use tax loop holes like Buffet.
Not too mention that the revolving Gov crony would get less reward pay the favour to the Corporation, he would perhaps be less likely to sell out.
"And doesn't the government really want CEO pay to be concentrated into fewer higher paid people because they end up being in the highest tax brackets"
An interesting idea but doesn't play out. From Warren Buffett, who pays a lower % than his secretary (and receives most of his comp in stock, not salary) to others like Romney who gets his IPO shares in an IRA type tax minimizing solution means that they will avoid taxes.
This is not the government issue, the comp plans setup to focus CEOs have resulted in a bunch of pathological predatory misfits who focus only on their pay, to the detriment of their companies....
The obvious question: Who the frick cares that people are not "equal"?!?!?!?! We will NEVER be equal. In the paradise known as Cuba, or Russia, there is extreme inequality. The U.S with it's Constitution, and capitalism, both based in morality has created the most opportunity and equality of any nation in history. The "we need equality" socialists/communists are destroying what opportunity many used to have.
Time to start weighing track stars down with sand bags becasue all runners are not equal. Morons. Complete, ignorant, morons.
You are aware of the Monroe Doctrine? US Military used to put down protests & Strikes in South America & Caribbean, US Covert Actions to Topple Democratically Elected Governments, Jim Crow Laws, You are aware that you have Workers Rights today only because of 100 Plus years of Activism & Striker which lead to Massacres and terrible Oppression of US Citizens, The New York Triangle Fire, US False Flag Attacks or False Reasons for Going to War which lead to not only American Deaths, but Millions in Refugees, Disease, Rape, Murder, loss of family, businesses, homes, culture, and utter Economic Destruction... Not to mention over 100 years of Bombing of Civilians in Northern & Southern Watch in Iraq prior to the Iraqi War.
- Yeah, things will always be unfair.
- But the US American Ideal was supposed to be Sovereignty for all people. Liberty, Freedom, Equality, and Justice.
- Look at NDAA & Patriot Act that allows Torture, Kidnapping, Secret Prisons, transferring people to foreign prisons for Torture, and all the NSA Spying... All of this is taking Sovereignty away from Real People... and it comes back to US Citizens as the Corruption has grown from 1945 National Security Act
If you accept the Corruption of USA, Don't see the COUP that has taken place in the USA... Well maybe you should study what Activists have been saying for 100 years.
When in the hell did anyone that has any sort of brain think life or anything we do in life would be "fair".
Anyone who preaches fairness just wants it for them and NOT you. You are all morons. Fair does NOT exist in any capitalist society. EVER. Never EVER will.
YOU PEOPLE MAKE ME SICK. ALL SOUND LIKE LIBERALS.....
FAIR IS FOR FAIRIES.
So you support:
- Trashing the US Constitution
- Systemic Wall Street Fraud
- Systemic Fraudulent Financial Ratings
- Jon Corzine Trading with Segregated Customer Funds
- Naked Short Selling, HFT, ALgo Trading, No Investigation of 9-11 Airlines Trade worth Billions
- Sub-Prime Mortgage Fraud, Ninja Loans, Sub-Prime AAA Rated Derivative Tranches with No Investigation
- US Labor Competing with Slave Labor overseas
- US Capital Flight from USA, 40% of Working Age Labor Force Not working and Not Consuming
- Your Older Relatives have to rely on MEDICARE & Social Security as they Lost a $1 Trillion in Pensions & Retirement Savings
Okay, man. I guess you are doing well. Keep your doors locked when you drive and when at home.
When in the hell did anyone that has any sort of brain think life or anything we do in life would be "fair".
In preschool. Progtards that whine about wealth inequality are just mad they didn't choose the correct tribe to associate with.
When in the hell did anyone that has any sort of brain think life or anything we do in life would be "fair".
Anyone who preaches fairness just wants it for them and NOT you. You are all morons. Fair does NOT exist in any capitalist society. EVER. Never EVER will.
YOU PEOPLE MAKE ME SICK. ALL SOUND LIKE LIBERALS.....
FAIR IS FOR FAIRIES.
Welcome:
Here, I'll help you out (for free as an olive branch toward your goal of equality). The part of my profile that you couldn't figure out how to post:
One creepy ass cracker. BSEE, MSEE, Rocket Scientist. Part-time real estate investor. Actually works for a living. Does not hate others who work for a living. Understands that people are very capable. Get the government the hell out of the way so that people can prosper.
Rocket Scientist...
As an Electrical Engineer you may be employed by an Aerodynamics Corporation. You may work on electrical systems for Rockets.
What Rocket is your total design? Have you ever been responsible for the complete design of a Rocket? Any Rocket? Even a Hobbyist Rocket?
Since a Rocket has a Center of Gravity and a Center of Pressure, just where is the ideal location for the Center of Gravity for stable flight?
Since you are so arrogant please do tell me that location.
Otherwise I will tell you a location of the whereabouts to put that Rocket and it is straight up your ass, cowboy.
LOL!!! Thanks for that!
BTW - Hate never fed a starving child, cowgirl.
Thank you for posting my information. Have you ever considered thinking - maybe using a readable font that fits on the page, oh bright one?
So this is the best argument that you have for "equality." LOL! Much appreciated.
There is no way any single worker can be valued at a rate of over 300:1 versus another employee at the company. If the employee representing 1 were really worth so little it would not pay to keep them. This is how things are in the world we live because we do not have equal application of our laws to ALL. Do that and you will see the ratio drop much lower. Even hardcore Republicans think a CEO should only make 12x the an unskilled worker in the same company.
Whatever the ratio would be we do not know because our laws have been destroyed and we no longer have a free market that would allow such discovery. Odds are, no company would pay a single person so much if that person did not have open door$ in government by which to garner an unfair advantage.
That is the argument for equality.
No one cares about inequality ... well, except that it DID cause the Great Depression, the current financial crisis … and the fall of the Roman Empire.
And conservatives shouldn't care at all, because bad government policy – which favors the fatcats at the expense of the average American – is largely responsible for our runaway inequality. And conservatives LOVE stupid policy by big government!
Um....currency debasement, in an attempt to buy loyalty (wars included), caused TGD 1.0, 2.0, and the Fall of Rome.
I thought that the artificial wheat prices kept up after WW1 brought a bunch of suitcase farmers from NYC and Chicago to buy up the (soon to be dustbowl) farmland.
These artificial wheat prices (Canada had them as well, but dropped them after WW1) and loose lending got everyone in debt. Then the wheat floor was removed and the lending tightened up. The last remaining farmers couldn't service their debt and lost the farm.
Not related but the farmers tried to plant more and more to make up for the lower price. Drought stuck at an inopportune time and... dustbowl.
Anyway, it may have been inequality, but I am putting my money on good old CORRUPTION.
For some more info on the late 19th and early 20th century USA, a great read is "Ditches Across the Desert". The corruption was just as bad then.
I sorta like the Spartan model.
No fatcats. No deadbeats.
Yes, YES!!! Inequality also causes men to go bald and women to get fat. Oh... and inequality causes tornadoes, earthquakes, and hurricanes as well. You know... inequality even causes AIDS!!! Aaack!!!
LOL! Get a grip. The U.S. is one of the few countries where one can buy a lawn mower for $200 then turn that into a $100K/year business within a few years. If you hate it that someone earns a lot of money compared to you then don't work for that person or don't do business with their orginazation.
Please tell me how to do this. I actually have $300 in start-up capital. How soon can I expect to be making it rain?
I completely understand your ignorance regarding earning a living. Please print this out, take it to someone who can read, and have them read it to you over and over until you understand:
Purchase the lawn mower.
Take a shower, brush your teeth and hair, and clean yourself up in general. I know... the horrors!!!
Go door to door to homes, churches, businesses, etc., with lawns asking them if they'd like their lawn cut. Give them a reasonable price (no, your genius isn't worth $200/hour while cutting lawns)
As you add more lawns to cut (lets say at an average of $50/mowing - homes and businesses) hire people to work for you mowing said lawns. Earn $10/lawn from each of those people (at 10 lawns cut per day that's an additional $100/day of income). For the math challenged I'll spell it out for you: if you cut lawns once per week during a 25 week growing season that comes to $10 * 25weeks *5work days/week * 10 lawns per day = $12,500. Have ten people productively working for you and that comes to 10 * $12,500 = $125,000/year. Yes, Dear Leader and his government will try to take most of that from you but that's what you voted for.
Repeat hiring people (yes, you'd be the **evil** company president so don't tell your friends) until you are making the income that you desire. Or, mock hard working people, yell about not being paid enough for your brilliance (if people only knew!), and remain a failure.
So I can make $125k per year if I convince ten people to make $10k per year each. I'll have a think about it. Hell, I'll even apologize for being a negative ninny for arguing the finer details while the general concept is sound.
I gotta admit, it worked for Jim.
Your math is off by a factor of five. You have to convince ten people to each make $50,000 per year for working less than half of the year - with weekends off. That would be the easy part. You'll have to get people to agree to hire you first, before you can start hiring others.
You won't be able to do math like that and successfully run your business. The long solution to the correct answer is below:
From the example, above, each lawn gets cut for $50. You take your $10 share for putting your capital at risk and employing people. That leaves $40 per lawn per person. Using the same formula as above, (25 weeks of cutting season) the person can make: $40/lawn * 10 lawns per day * 5 days per week * 25 weeks = $50,000 per year. That, of course, is for working 25 out of 52 weeks in a year. Now you'll have to reduce your employee's salary because you will buy her a premium health care policy where she pays nothing into it. You'll pay his Social Security tax, etc.
If you'd like to make more money, in the off season plow driveways and parking lots to increase your income and/or your employee's income. Or, lounge around for 27 weeks marketing, reading up on landscaping/gardening, and getting ready for next season.
If you don't get many taking your initial offer for lawn cutting be creative. Offer the first two cuttings for half price. Do an exceptional job (sweep up, trim, even get rid of the weeds growing out of the sidewalk). Always do an exceptional job, always employ people who do an exceptional job, and you'll do well. Be better than your competition (that whole capitalism thing!).
Pick another occupation that takes little start-up capital and try that instead if you'd like. For example: car detailing, gutter cleaning, deck power washing/restoring/treating, power washing in general, bake incredibly good cookies and sell them at 7-11's and grocery stores, 4 for $2.50. The list goes on and on. It takes energy and initiative. Although you have to remember - any business that doesn't take a specialized skill leaves the door wide open to competition from many perfectly capable of mowing lawns, or similar, so it might not be easy.
Shit! You're right! I fucked up the math. I really hate that. Go an' hang me head in shame. Gemmeself a red arrow for being a moron at the wrong moment.
Yes, if only it were so easy. Some of us have gone door to door to door looking for work. It takes quite a while before you get a job out of it. Mind you, I still wish the unemployed would do more of it, just to spell out how big the problem really is.
I understand how hard it is. I did it. Although I only had one person working for me at the time and I was having fun doing it while in college. I didn't need the income in order to eat or pay rent so there was no real pressure. I could have kept expanding the business and would have done well, potentially making a career of it. But, in the end, my passion is engineering/rocket science so I took that career path instead.
I wish the unemployed would go door-to-door so we could see the re-appearance of this:
http://images.businessweek.com/ss/07/04/0426_dow/image/2_great_depressio...
Then there would be one less pretence.
That must be some lawn mower.
"That must be some lawn mower."
No doubt. But the key is to have a rational, hard working, thinking, person running the business. I'm sorry that you don't qualify. Now go outside and yell about not being paid enough and see where that gets you.
That must be some lawn mower.
And that is some funny shiite
No. Someone in Australia did that exact same thing. But I've heard that he pinched the idea from someone else.
His name is Jim.
made in China, naturally
Reminds me of the US Bank Memes
Started way back, but just going back to like 1880:
- Silver Certificates are no good, say the bankers
- Gold Certificates are no good, say the bankers
- US needs Central bank to keep the government from spending too much, moral hazard
- 1913 Federal Reserve Central Bank Created
- Stock Market is good, US Industry can rise forever
- After Crash and Depression, banks say the economy is not good, can't invest
- Public Banking is bad, Private Banking is the way out of Depression
- Government should stay out of banking
- Only Private Bankers have the skill to rate businesses
- Only Private Banks have the Skills needed to determine money policy for the people
- US needs a Fiat Currency
- Only Prime Dealers are Smart enough to handle Federal Government Business
Haha. We know how that all worked out in 2008 Financial Crisis. Boom & Bust. But the damage is no longer even transparent with non-standard accounting & non-standard financial instruments... and financial ratings firms are not reliable.
Private Bankers & Central Bankers were schemers from the 1900s. Today people are smart enough that many people can judge how to assess their own taxes and look at their own business accounting data.
Solution: Shift 2 million people out of Private Banks into Public Banks. This will help create downward pressure on private banking executive salaries... through downsizing their functions, their processes, and their purpose on Wall Street & London. Then break them down with Glass-Steagal Act and Anti-Trust Law. Then End the Fed.
Americans have been propagandised to believe that anyone can get to the 'top'.
All they have to do is be a totally selfish arsehole and they can have all the money they want.
It's not true, mostly. The right parents are much more important, oh yes, and psychopathy.
It is very heavily used as an excuse by selfish arseholes, however.
"Occupy organizer David DeGraw says that - if people knew how much inequality we really have - they would revolt. He may be right."
If people knew a LOT of things they would revolt. So the real question is....why don't people 'know' these things in the first place and why do people have little to no curiosity to 'know' these things?
Oftentimes 'knowing' alarming or dangerous 'knowledge' or information implies direct responsibility to do something about it. And for many that is the LAST thing they want.
As always GW, thank you for your constant efforts in bringing this 'knowledge' to light.
Waiting like a frog in a pot over the fire ... No it is not hot yet..
I try to enlighten people all the time, sending them emails to links from this site in an attemp to awaken the dead, Lots of people say " there is nothing I can do, I am not going to go and protest".
Well protesting is not really the expectation, knowledge is the key. If these people can slowly be educated into knowing the crimes of the CB's/Gov's about fiat currency, it will get people talking. I want people on the street talking about this stuff all the time, at coffee shops, grocerie stores, when people pass on the street. I want conversations of this corruption and waste on the tips of everyones tongue, the more we talk the more we learn. the more we learn the more people talk, you cannot expect people to put aside everything that they thought they knew was wrong too quickly.
It will be a long slow transistion of learning. Once the Gov overhears us talking on every street corner and coffee shop, and realizes that we are not the same sheeple we once were, it may make them think and put some fear into them, knowing that the cat is out of the bag their days may be numbered.
I have lots of people in my travels that are starting to open their eyes.
It's a start.