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Election 2020 Issues: Economic Inequality

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Leon On December 05, 2019




San Diego, California
#1New Post! Jul 08, 2019 @ 15:09:11
If you were President, and had a House majority and Senate supermajority on your side, how would you address economic inequality in our nation, and, if cost is involved, how would you pay for it?

For a summary of the issue, read below.

The last few decades of the 19th century and the first couple of decades of the 20th century saw a period of rapid economic expansion due to the emerging Industrial Age in the US, from which a group “robber barons” emerged, such as the likes of John Rockefeller and Andrew Carnegie, that accumulated huge sums of wealth and capital. By the end of the 1920s, the top 1% of earners were taking in 18% of the total population earnings, much at the expense of the poor and working class, as poverty was more widespread during and before this time than it is today.

However, after the Great Depression of the 1930s hit, when the supply of money fell sharply by 30% from 1929 to 1933 and unemployment skyrocketed to 25%, a “Great Compression” occurred where the income inequality from the previous few decades fell dramatically. This was due to the New Deal and its taxation and the strengthening of unions, which saw the income of the poor and working class rise from 1937 to 1947 and the income of top earners decrease. During the next 30 years, from World War II to the early 1970s, Americans saw a steady period of relatively low level of wage inequality. American manufacturing jobs were abundant with little foreign competition, unions remained strong, and taxation of top earners were high at a marginal 90% rate. The poverty rate shrunk in half during this time and was 12-13% by 1970. Average household income was up to $50,000 per year, in today’s dollars, by 1970.

However, afterwards, income inequality started expanding again. From the early 1970s until today, average wages remained stagnant for a number of reasons, while productivity doubled, providing top income earners with greater capital. This widening gap was further exacerbated when tax cuts under President Reagan, President George W Bush, and President Trump reduced the marginal rate of top earners to under 40% today, as well as the shift of huge numbers of manufacturing jobs overseas for cheaper non-US labor.

The period from the early 1970s to today, however, saw a greater increase of women in the workforce, up by 50%, contributing to an increase in household income despite the wage stagnation. Both spouses were working in over 70% of households by 2008, up from 47% before 1970, and the total number of work hours in households increased by 50% over that span. As a result, average household income increased from $50,000 per year to $60,000 per year in today’s dollars.

However, average wages have remained stagnant at approximately $22 per hour in today’s dollars over this time span. This has been attributed to this influx of women in the workforce, shift of manufacturing jobs overseas, and increased benefits such as medical insurance, among other reasons. US minimum wage for a single worker was at 99% of the poverty level in 1968 for a family of four, but is now at 60%. In terms of living wage, which is higher than the poverty level and is defined as the earnings needed to sustain the basic cost of needs such as food, basic clothing, shelter, and utilities, today’s minimum wage for a single worker would only cover 25% of living wage for a family of four and 50% if both parents were working. The US minimum wage today is $7.25 an hour.

Furthermore, working hours have begun to decline since the Great Recession of 2007-2009, down 10% since its height before the Great Recession. And, while unemployment is at a low 4% today after 10% during the Great Recession, this figure is only based on those actively seeking work, as the employment to population ratio is down to 59% today after being at a peak of 62-65% during the decade before the Great Recession.

Top earners have enjoyed increasing earnings and accumulated wealth since the early 1970s due to this wage stagnation, a shift to cheaper overseas manufacturing, increased productivity and resulting capital, automation, and tax cuts that weighed in their favor. While the inflation adjusted median household income has grown 10% since 1967, it has grown 50% for the top 10% of earners and doubled for the top 5% of earners. The overall US share of income for bottom half of US earners declined from 20% to 12% from 1980-2014, while the overall US share of income for the top 1% of earners grew from 12% to 24%, far exceeding what it was in the 1920s before the Great Depression or any other time in our history. Today, the combined 1% of earners make 81 times more than the combined bottom 50%.

As a result, today, the top 1% of wealthiest families in the US own 40% of nation’s wealth and the top 10% own 80%, the latter having increased from 67% in 1990, while the wealth of the next 40% has decreased from 33% of the nation’s wealth to 20%, and bottom 50% continues to own only 1% of the nation’s wealth. 95% of all economic gains during the past decade went to top 1% of wealth owners. Today, the combined net worth of US households and nonprofits is $94.7 trillion, which would amount to or $760,000 per household if spread evenly, but, in actuality, the bottom 50% of households average only $11,000 in worth per household.

The poverty rate does remain at 12-13%, consistent with the rate in 1970, and the rate of homelessness is at .17% of the US population. The latter amounts to roughly 550,000 homeless individuals, and has largely been the same in the past decade, since the Great Recession. The homeless population tends to disproportionally accumulate around large US cities, however, such as Los Angeles and New York, exacerbating the situation for these cities.

The US government provides cash assistance for the needy primarily via food stamps and welfare. Individual and household earners who make less than 130% of poverty level typically qualify for food stamps, and the payout averages roughly $130 a month, a figure which has not kept up with inflation since the Great Recession. Qualification for welfare is typically held to earners making less than 50% of the poverty level, and is limited to those who have children. Since 1996 legislation, welfare is also usually paired with work requirements. Welfare payouts average roughly $150 a month, which also hasn’t kept up with inflation, as recipients were receiving roughly the equivalent of $230 a month in today’s dollars in the 1970s.
chaski On about 5 hours ago
Stalker





Tree at Floydgirrl's Window,
#2New Post! Jul 08, 2019 @ 15:28:23
On the one hand "we" are in the longest period of economic expansion in U.S. history, which started in late 2009/early 2010.

This is reflected in part by the fact that "Homeownership rates in the U.S. have increased steadily since the height of the 2007-2010 housing crisis."

On the other hand the USA presently has a record 7 million Americans who are 90 days behind on their auto loan payments. Is this a problem? Does it suggest that economy isn't as strong as some thing? Does it suggest that people are spending beyond their limits? Is that a sort of consumer bubble that will soon burst?

Leon On December 05, 2019




San Diego, California
#3New Post! Jul 08, 2019 @ 15:35:38
@chaski Said

On the one hand "we" are in the longest period of economic expansion in U.S. history, which started in late 2009/early 2010.

This is reflected in part by the fact that "Homeownership rates in the U.S. have increased steadily since the height of the 2007-2010 housing crisis."

On the other hand the USA presently has a record 7 million Americans who are 90 days behind on their auto loan payments. Is this a problem? Does it suggest that economy isn't as strong as some thing? Does it suggest that people are spending beyond their limits? Is that a sort of consumer bubble that will soon burst?



While things certainly are better than it was during the Great Recession, as illustrated above, a lot of this economic growth is being funneled to the rich. Of course, this rich includes Trump and much of Congress, so it’s hard for them to see it. Trump doesn’t even know how people buy groceries.

‘This doesn’t look like the best economy ever’: 40% of Americans say they still struggle to pay bills
gakINGKONG On about 6 hours ago




, Florida
#4New Post! Jul 08, 2019 @ 16:01:51
The president feels the way we all feel. Everyone agrees that a person who does a job should be paid the same regardless of the immutable characteristic of that person be it North America or South America or France.

And that's a cause for celebration.
mrmhead On about 2 hours ago




NE, Ohio
#5New Post! Jul 08, 2019 @ 16:15:12
@gakINGKONG Said

The president feels the way we all feel. Everyone agrees that a person who does a job should be paid the same regardless of the immutable characteristic of that person be it North America or South America or France.

And that's a cause for celebration.


You have a good point there.

If everyone In The World were paid equally for the same job, the cost of labor would no longer be an incentive to move manufacturing, assembly, textile work over seas.

.. or tech support, call centers, etc.

But "Equal Pay" is not the topic.
gakINGKONG On about 6 hours ago




, Florida
#6New Post! Jul 08, 2019 @ 16:19:37
@Leon Said

While things certainly are better than it was during the Great Recession, as illustrated above, a lot of this economic growth is being funneled to the rich. Of course, this rich includes Trump and much of Congress, so it’s hard for them to see it. Trump doesn’t even know how people buy groceries.

‘This doesn’t look like the best economy ever’: 40% of Americans say they still struggle to pay bills


I think we're all set up for a great presidential campaign for 2020.

The most important fact to remember here is that for better or worse, Trump cannot depend upon the main stream press to carry his water. If he gets re-elected it will be because enough voters decided that he earned the chance to do another four years. It won't be because of the glowing reviews by international leaders, international press, or American celebrity culture.
gakINGKONG On about 6 hours ago




, Florida
#7New Post! Jul 08, 2019 @ 16:24:28
@mrmhead Said

You have a good point there.

If everyone In The World were paid equally for the same job, the cost of labor would no longer be an incentive to move manufacturing, assembly, textile work over seas.

.. or tech support, call centers, etc.

But "Equal Pay" is not the topic.


Anytime is good time to bring it back home to that.

I growed up a ways back and learned back then that there are rich people and there are poor people. The poor will always be with us and that's just the way it is. And while the love of money is indeed the root of all evil, simply having money surely cannot be a sin.
Leon On December 05, 2019




San Diego, California
#8New Post! Jul 08, 2019 @ 17:22:09
From the OP:

95% of all economic gains during the past decade went to top 1% of wealth owners.

While elections in the past have usually been about the economy, I’m not so sure it will be that cut and dry this time.
gakINGKONG On about 6 hours ago




, Florida
#9New Post! Jul 08, 2019 @ 18:55:00
@Leon Said

From the OP:

95% of all economic gains during the past decade went to top 1% of wealth owners.

While elections in the past have usually been about the economy, I’m not so sure it will be that cut and dry this time.



Trump won the election because he edged out support in the rust bowl.

Do you really think middle-class/working-class voters will hinge their support for the president on something other than the economy?

Pain is the motivator. Okay so let's pretend there's only a few polar icecaps left and all the others are climated-changed out. Rustbowlers aren't in Venice Italy getting drowned by rising sea level.

Who-ever decides it come next election will base their decision on the level of discomfort they are experiencing. Less pain Trump wins more pain Trump loses.
chaski On about 5 hours ago
Stalker





Tree at Floydgirrl's Window,
#10New Post! Jul 08, 2019 @ 19:57:09
@gakINGKONG Said

Who-ever decides it come next election will base their decision on the level of discomfort they are experiencing. Less pain Trump wins more pain Trump loses.


A bit over simplified, but yes.


@gakINGKONG Said

Okay so let's pretend there's only a few polar icecaps left....



How many "polar icecaps" do you think there are on planet earth?
Leon On December 05, 2019




San Diego, California
#11New Post! Jul 08, 2019 @ 20:04:54
What I mean is that the incumbent party won’t necessarily win just because the economy is doing well, as was usually the case in the past. When only 1% are the primary beneficiaries of the booming economy, the incumbent may still lose. So it isn’t as black and white as: the economy is doing well = the incumbent wins. Heck, otherwise a Dem would be sitting in the Oval Office now.
chaski On about 5 hours ago
Stalker





Tree at Floydgirrl's Window,
#12New Post! Jul 08, 2019 @ 20:10:36
@gakINGKONG Said

Trump won the election because he edged out support in the rust bowl.


Trump actually won because a significant number of people who tend to lean Democrat did not trust and/or hated Hillary and/or were pissed off that Bernie was not selected as the candidate for the Democrat party.

@Leon Said

...it isn’t as black and white as: the economy is doing well = the incumbent wins. Heck, otherwise a Dem would be sitting in the Oval Office now.


Correct.

In fact, while I actually think Trump is going to win, if Trump loses it will not be about the economy... unless the economy tanks pretty heavily in the next 12 months +/-.

If the people who turned on Hillary or failed to show up do vote this time around, Trump could lose in much the way Hillary lost... by electoral college vote. Though it is more likely that if a Democrat wins it will be by both popular vote & electoral college vote.
Leon On December 05, 2019




San Diego, California
#13New Post! Jul 12, 2019 @ 03:22:27
This might be one issue where you would find me leaning right more than left on, or at least more centrist than other issues. I don’t think a basic guaranteed income is the answer, or increased welfare, etc. At least until automation completely takes over and we have no choice.. I think work requirements are a good thing. And living in less than ideal conditions or working a job that doesn’t meet basic needs should be an incentive to climb rather than complain.

I do believe that we need to tax the rich more, however, and we need to stop aggravating the situation for the impoverished, such as the war on drugs. We also need to provide more for those who cannot help themselves, such as better services for the homeless, many of who are in need of mental services, drug rehabilitation, and other forms of counseling.
mrmhead On about 2 hours ago




NE, Ohio
#14New Post! Jul 17, 2019 @ 12:02:24

Abigail Disney said she decided to check out Disneyland's worker conditions after a worker sent her a Facebook message. She said every employee delivered a similar message to her: "I don't know how I can maintain this face of joy and warmth when I have to go home and forage for food in other people's garbage."
...
Iger earned $66 million last year. The median salary of a Disney employee is $46,127, the company reported.
...
"We need to change the way we understand and practice capitalism."


Disparity

Part of the issue is the drive to produce profits in the short term for the shareholders.
If you don't produce profits, you'll be out of a job.

I mentioned somewhere else about finding a formula for executive pay that takes into account number of employees and their salaries. But then that wouldn't necessarily be free capitalism.
The only thing a gov't could do in this case is tax the rich and give it to the poor - which obviously rubs a lot of people the wrong way - and it doesn't necessarily make it to the right people.
We shouldn't punish (tax) the successful (rich) people just because they are good at what they do, but again - the one of the driving culprits is wringing out profits to please the shareholders.

I work for a privately held company, and they make decisions for the long term, for sustainability, not for this year's bottom line.
Of course the CEO is still a rich MF'r and I'm driving a Chevy s***box, but hey - it could be worse
chaski On about 5 hours ago
Stalker





Tree at Floydgirrl's Window,
#15New Post! Jul 17, 2019 @ 16:25:28
I would set up a system to allow/entice illegal aliens to pay Federal taxes. They could apply for a tax number that was much like a U.S. citizen's social security number.

The illegal aliens would then use that number, let's call it an ITIN (Individual Taxpayer Identification Number) to file their federal & state taxes. Of course They wouldn't get tax refunds, write-offs, deductibles, etc...

They would pay federal & state income taxes and (of course) all sales taxes.

That way illegal aliens would not be leaching off of "our" social programs.

Oh... WAIT!

That system is already in place!!!

In fact, research reviewed by the nonpartisan Congressional Budget Office indicates that between 50 percent and 75 percent of unauthorized immigrants pay federal, state, and local taxes. Illegal immigrants are estimated to pay in about $7 billion per year into Social Security.

(Side note: Only about 56% of U.S. citizens pay income tax... as compared to the 50% to 75% of illegal aliens.)

I guess that doesn't help economic inequality anyway.
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