So I am listening to this on the radio on the way home, and I say to myself:
"Self, this should be essential listening for my AP Econ students, because this helps them understand what I have been trying to get across to them. Their lives will be affected by the dramatic changes in the world economy."
And so it is.
20 comments:
Nice message to yourself. I get the point.
The article does raise an interesting point. How far away are we from experiencing the kinds of radical (and violent?) changes that societies undergo when they have a disillusioned lower class and huge income inequality? We make much less progress in this area than we think we do. Congress just raised the minimum wage. But a lot of people don't realize that the minumum wage got raised for everybody, including CEOs, whose minimum wage is now something like $5 million. Seemingly progressive laws like this don't really do much to help income inequality. The article does make a good point about globalization. Whatever skills one has on a national level are magnified in value on a global level. People should start looking for skills that make them unique and be creative with their human capital. People complain about income inequality, but they have to be willing to take a risk and do something original.
Thank you for getting the message sent.
I am responding to part four concerning if inequality is necessarily a bad thing. Before I even listened to the report, I had the same ideas as the Chicago economist. I thought, “Well inequality can be good or bad, it depends on what kind it is. And I don’t know too much about the current U.S. economy, but from how it seems, it seems like for the most part we have the good kind.” The bad kind is like in pre-revolutionary France (not that the revolution fixed things) where the wealthy are where they are based on family and class and privilege and not on skills. They can even become lazy and inbred and retarded and still keep their power and money, where people in the lower classes, even if they are very smart, have no chance of real success. This kind of inequality is probably still around in many parts of the world, but I do not feel that it is a problem in America. The American inequality seems to come from an inequality in skill, education, or even just luck, but it is not like people are tied down and cannot rise up the ladder. Education is available to those that are motivated, racisms is a quickly eroding factor, and success awaits people who are willing to try, and also have something valuable to contribute. Of course this does not always work out, sometimes fate works against very deserving people, and there are certainly instances of unfairness, but our economy seems to generally operate as our government and society does, individualistically, democratically, and fairly. If income inequality comes from rewarding the people at the top for their higher skills and harder work, then it is a good thing. Firstly, they then deserve it. And secondly, as it said in this report, this shows everyone else that if you work hard and use your human capital to its potential, you get justly rewarded. This keeps the system of economic incentives alive, and helps the entire economy to continue expanding as every person reaches for something higher.
in response to part 5-married with money, it certainly makes sense that the equality and further education of women has contributed to the widening gap between the rich and poor. not too long ago, a majority of mothers/wives stayed at home with no income. they (along with their children) lived solely on the income of their husbands. since women are now able to further their education and therefore get high income paying jobs (as compared to being a housewife with no income)they are not only earning enough money to support themselves as well as a family on their own, but they are also meeting potential husbands with that same level of high income. for the most part, the middle class used to be made up of men with relatively high incomes and their families which they supported. now the middle class is dissappearing. women in the workforce certainly seem to be a major contribution to the widening gap between economic classes.
it is difficult for me to comprehend what makes two people pretty much similar in skill level and basketball ability so different from each other. i guess it's the $4 million plus dollars that separates them financially. Andrew Bogut and Lance Allred were pretty much similar talents on the college basketball scene when they were in competition for the rebounding title. however Bogut is the one who is making all the paper while Allred is making a mere $15,000 a season. it just doesn't make sense. the economics of the NBA are just rediculous when the average annual salary of players is more than $5 million. no wonder why all the ballers are whippin phantoms and sippin cristal. it makes me think that the rich are getting richer while the rest of the world is not. the trend is an inverse relationship and i think it will continue to become more and more skewed as the years go by.
The financial gap between the social elite and the middle class seems, to over time, get greater and greater. We see more and more money become allocated to the top 5% of the economy. We already see people being forced out of their homes due to rising housing prices in an area where only the wealthy can afford to live such as East Hampton. I think if this trend does keep occuring then soon the idea of a medium of exchange is going to be put into jeorpdy. If this top 5% of the economy accumulates all of the money supply people will not want to work or trust the standard by which it is valued.
im responding to part 3, involving the basketball players. this is a perfect example of the giant gap between the rich and middle class because of minimal differences. the minor league players who work just as hard and even harder in order to prove themselves to the NBA may not deserve the same amount of money but it's rediculous to think 15,000 a year is nearly enough. Our society is overally focused on sports but must be creating lots of revenue in order to pay a Kobe Bryant who had a rape charge or a Bogut who is from Australia. the sad part is people would still play in the minors for no money, just to pursue their dream and will make millions less having the same ability just because they didn't catch one rebound, missed one shot, or made one too many turnovers.
Response to Part 5 Married with money.
In a way it makes sense for all these couples to be in the same field of work. All the examples of people that were given in the report were people who met their spouse at school. Depending on what you choose for you career depends on how much your income will be, if you and your spouse have low paying jobs then yeah you will be making less then a 2 doctors or 2 lawyers. The article makes sense now that women aren’t just staying at home and are getting jobs similar to their husbands their household income is increasing.
in response to part 3. the difference between the two player's pay checks is crazy. as m rod said, it shows how the rich are getting richer while the poor, poorer. I guess the money really is in the NBA and not alternate leagues, and since those players are the ones bringing in the majority of the money for the NBA i can understand that they would make a higher wage, but a differene of over 4.75 million is unreasonable.
meh. the rich get richer and the poor well stay poor. the American dream is to get rich and live a well off life. but that isn't happening for most Americans just the top 5% or so. but this deals with much more political views and personal beliefs. but then again i think differently then most of the people i am around. and don't think it is entirely fair to punish people who make more money. since we all want to make more money.
I listened to part 5 and well not to much to say about it. It makes sense that you have a good chance to end up marrying someone that has the same income as you from going to the same school as them or just from being around them at where ever you may work. And it makes sense that this is the reason the income gap is expanding because when you meet someone that has the same income as you and marry them you are eithier doubleing your income by a large amount or a not so large amount this is causeing the gap to incrase.
In response to Part 2: Ivy Tower, Blue Collar.
Inequality is something that unfortunately everyone has to face at some point in his life, but schools like Amherst College are trying their best to level the playing field. It is especially hard to attract students from all economic backgrounds to apply to college because of the outrageous sticker price and the fact that less priveleged students may not have access to an education that prepares them for higher education or even helps them learn how to apply for college. This can be extremely discouraging and is one of the main reasons that most colleges have predominately upper-upper-class student bodies. And although top schools have generous financial aid programs (for those who qualify), the truth is that there is a huge difference in the experiences and education that someone who goes to Dalton has and someone who goes to an inner-city public school. The former person will likely be much more prepared for higher education and will know many more things they need to know to be at an elite school than the latter person would which makes addressing social differences difficult. Amherst does its best to give oppurtunities to everyone by having need-blind admissions and doing such things as buying their students suits for job interviews and offering special tutoring programs to students who need them, but not all schools are capable of this. Amherst can take care of its students so well because of its multi-billion dollar endowment for less than 2,000 students. Most other schools do not have this kind of money and are not as able to ensure equality for everyone. Closing the social gap may be hard at Amherst, but it is much harder at colleges that do not have the resources to take care of everyone so well.
responding to part 2
Skyrocketing college prices are a major issue challenging american values. Nobody ever said everyone in america had to have an equal economic standing, the point is that everyone has an equal opportunity. Providing free public school through 12th grade used to satisfy this creed, but it no longer does. Back in the old days, when most poeple didn't attend college, graduating high school allowed you to legitamately compete for jobs. Now, the bar has been raised, and college is expected. Now that the minimum expectation is an expensive college education, we need to seriously consider if we are still providing equal opportunity for everyone.
It is comforting to know that althought the gap between the rich and poor/middle class is growing larger, we are all moving up as a unit. It is hard to picture this since much of the new technology is replacing many jobs the lower classes would have taken. So what are these people doing? I would venture to say that aside from us creating new jobs for ourselves, the rich's prosperity must cycle itself back to the lower classes through investment and such. Thus, for the most part we continue to advance.
The View from the Top: wouldn’t it be nice to see everything from way up there in a 20 million dollar jet. id go for it. Mr Rood, i think you have a hard job and should be able to travel "unhindered by security lines". There are a lot of people out there who work very hard just to make enough to live but some other guy has his mind occupied with what color the interior of his jet should be. the sales of these jets are rising at 30% so either they weren’t selling before or more people are outstandingly wealthy? I hope you haven’t taught us the solution to the distribution of salary because i don’t know it.
So what understand is that the rich are getting richer while the middle class is getting screwed by having to pay for health insurance, which their employer should be giving them as benefits. Now due to the decrease in unions the middle class, blue collar worker isnt even getting represented for what they want. Also in reponse to Part 2: Ivy Tower, Blue Collar, now college bound students have to either come from a wealthy family or get a scholarship to even think about attending a private, nationally recognized school, which would enable them to excel in the corporate world. To me this is just keeping the working class divided from the corporate world, yeah the kids going to the less recognized schools will get a great education and do well, but maybe not as well as the students attending the elite colleges getting offers from wall street. And this is all because of the insanely high priced tuitions. I think the government needs to start at the source of the problem instead of trying to patch it up.
in response to part 5- married with money
This part is interesting because it presents a subject that I hadn't really thought of before. The shift in the views of women in the work force has played a major part in increasing income inequality, which is something that I hadn't thought of - it would seem that it would somehow bring equality. In the past, having a wife who didn't work was a sign of wealth, but now having two doctors, or two lawyers, is a sign of even more wealth, and more importantly talent. As for the question if income inequality is good or bad, I think that it is good in the situation that we have it. Wealth is, for the most part, based on individual talents, skills, and the ability to look ahead and climb the 'ladder of success,' to be cliché. I like this idea, not only because it encourages competition and therefore improvements, but also because I like the idea that with work, I have the possibility of someday joining the people who are making the income gap sky rocket.
part 3 respomse: its crazy how the monety destribution within proffesional sports is given out. player with equal ability are receving greatly substantual diffrences within their pay checks. exactly how the economy is dividing as the rich top 5% get richer and richer and the middle and lower class aren't. Though due to a 1 point, rebound, ect...... less average per game perfessional basketball players are receiving great diffrences wihtin their pay checks
It seems to be that the rich are getting wealthier while all the while the middle class is getting hurt by having to pay for health insurance; which their employer should be giving them as benefits. Now as a result of the diminishing unions the middle class, the proletariat does not have representation. Also in response to Part 2: Ivy Tower, Blue Collar, now college bound students have to either come from a well-to-do background or get a scholarship to even contemplate about attending a private, nationally recognized school. This is now necessary in order to excel in the corporate world. To me this is just keeping the working class divided from the corporate world, yeah the adolescent going to the less acknowledged institution will get an education and possibly do well, but then again not as well as the students attending the elite colleges getting come-on’s from wall street. And this is all because of the exceptionally high priced tuitions. I believe the government needs to begin at the source of the problem instead of trying to cover over the already damaged areas.
part 3:
Am I supposed to feel bad for this gut because he wasn't good enough for the NBA. Yeah, they make alot of money and you don't, but thats because they possess very rare human capital that experts in this area (nba scouts) have decided you do not possess. NBA players make the most money out of professional athletes because there are less pro basketball players than any other sport due to the five man teams. Maybe your life wouldn't suck if you decided to take the time to learn something in college besides play basketball. Consider yourself lucky that you make $15,000 a year to PLAY A GAME! Most people have to get real jobs. If you are so strapped for cash, maybe next time you are gonna play basketball video games on your huge TV with your friends, go get another freaking job. America is capitalist economy. There is no demand for you so you don't get paid. Do you think the government should subsidize you a special salary because you're almost good enough? The forces that get pros millions are the same forces that keep your salary so low. Bottom line: you're good at basketball, just not good enough right now. Get over it.
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