The rich - poor gap
Discussion
walm said:
900T-R you said nothing in your lifetime had increased the pie.
I gave Moore's Law and the internet as counterexamples.
There are plenty of other examples particularly in areas such as pharma and biotech (little blue pill anyone?).
However you return to saying that aspirational things have to be rare and expensive, which to a certain extent I agree with.
Unfortunately that isn't an argument to suggest that the pie isn't getting bigger, you have just limited a certain part of the pie through definition.
The pie is certainly getting bigger and the reason is productivity which is closely tied to innovation of which there has been plenty in the last 50 years.
The number of Patek Philippe's may be strictly limited but that doesn't mean half of China wouldn't be delighted to be given a Swatch.
1) The internet.I gave Moore's Law and the internet as counterexamples.
There are plenty of other examples particularly in areas such as pharma and biotech (little blue pill anyone?).
However you return to saying that aspirational things have to be rare and expensive, which to a certain extent I agree with.
Unfortunately that isn't an argument to suggest that the pie isn't getting bigger, you have just limited a certain part of the pie through definition.
The pie is certainly getting bigger and the reason is productivity which is closely tied to innovation of which there has been plenty in the last 50 years.
The number of Patek Philippe's may be strictly limited but that doesn't mean half of China wouldn't be delighted to be given a Swatch.
Who actually pays for stuff on the internet?
I've been in the publishing business long enough to say with some authority 'by far, not enough to compensate for the loss in revenue from printed media'.
Same in the music industry. Yes they sell downloads and the situation is not as bad as with selling words and images, but still we're far off the golden days of CD in terms of turnover.
Concert tickets, however, sell as well as ever before at ever higher prices.
2) What I'm saying is that while ever more money is being made 'virtually', mostly in the financial industry, when it comes to being spent the same money is by and large still chasing the same tangible assets as ever, which puts them out of reach for the 'average' earner.
So yes, someone getting richer does mean some others are getting poorer. Look at the state of our town and city centres. Book shops? Gone. Toy shops? Gone. Maccy D's? Now has one or two extra outlets. Poundshops? Loads. Empty windows? Ever more.
A generation or two ago, a 'family car' was a Vectra or Sierra. Now it's an Aygo with four doors. You could finance an 'average' house from an 'average' salary. Try that today.
Mr Will said:
Leaving aside the contractual restrictions on starting his own business, surely the same argument applies to his boss (who is an employee of the company, not the owner) who does get the bonus? It certainly applies to the sales teams who will rake in the commission selling the new widget.
My point is not that he is being exploited (I don't think he is). It is that in my opinion we have a distorted view of who adds value to a business - it's not always the guys at the top. Not everyone who is great is suited to rising through the ranks and leading a team or running a company.
I do get what you're saying, and I'm not here for an arguement (honestly! My point is not that he is being exploited (I don't think he is). It is that in my opinion we have a distorted view of who adds value to a business - it's not always the guys at the top. Not everyone who is great is suited to rising through the ranks and leading a team or running a company.
). However - what makes you think his direct manager will get a bonus, if the employee doesn't? They're both likely to get something if they're adding that much value - the manager may get a little more due to being a higher grade, but then they have the responsibility of working out what the market wants, and taking an educated punt that what the engineer has suggested is a good option (or they've asked the engineer to come up with something to fill a gap in the market they spotted). A few large loss making wrong decisions and the manager's likely to be looking for a new job, whilst the engineer will still be there happily working away.The ultimate company bosses always get paid much more, but the same arguement applies for them as for the engineer's manager. Ultimately the people on higher grades must be paid more than those lower down, or who'd do that job? It might appear that it's just sitting in an office all day and watching the cash roll in, but it really isn't...
PhillipM said:
Simple economics I'm afraid, it's easier to make money if you're rich than it is if you're poor, that's never going to change.
Indeed.Two things make money - time, and money.
The rich already have money, and are generally good at using their time to make more.
The poor don't have much money, so are already on the back-foot, and most are generally not good at using their time to make more.
DanL said:
The ultimate company bosses always get paid much more, but the same arguement applies for them as for the engineer's manager. Ultimately the people on higher grades must be paid more than those lower down, or who'd do that job? It might appear that it's just sitting in an office all day and watching the cash roll in, but it really isn't...
But why is the person who manages value creation 'higher' up the scale than the person who creates value? If I was the manager of a Premiership footballer or a well known music artist, wouldn't it be weird if I were calling the shots and earned ten times as much as the professional whose skills I make a living off? The function of a manager is the same either way - making sure the professional can apply their skills to the best effect... why should they be allowed to serve themselves first, the entrepreneur whose b*lls are actually on the line second, and the people who deliver the actual added value a distant third? The thing is that the corporate world has become some sort of pyramid scheme where a largely parasitic class has been allowed to grow, ultimately beyond what the added value that their 'subordinates' can provide supports - which is by and large where we are now as a society. A professional woh excels at his/her job will only improve on their position by becoming a mediocre manager (few are passionate about the actual managerial tasks because they're mostly not that exciting or fulfilling - it's the perks, the job status and a sense of responsibility/loyalty towards the employer that makes us do it) - how much earning power is being wasted this way?
DanL said:
Mr Will said:
Leaving aside the contractual restrictions on starting his own business, surely the same argument applies to his boss (who is an employee of the company, not the owner) who does get the bonus? It certainly applies to the sales teams who will rake in the commission selling the new widget.
My point is not that he is being exploited (I don't think he is). It is that in my opinion we have a distorted view of who adds value to a business - it's not always the guys at the top. Not everyone who is great is suited to rising through the ranks and leading a team or running a company.
I do get what you're saying, and I'm not here for an arguement (honestly! My point is not that he is being exploited (I don't think he is). It is that in my opinion we have a distorted view of who adds value to a business - it's not always the guys at the top. Not everyone who is great is suited to rising through the ranks and leading a team or running a company.
). However - what makes you think his direct manager will get a bonus, if the employee doesn't? They're both likely to get something if they're adding that much value - the manager may get a little more due to being a higher grade, but then they have the responsibility of working out what the market wants, and taking an educated punt that what the engineer has suggested is a good option (or they've asked the engineer to come up with something to fill a gap in the market they spotted). A few large loss making wrong decisions and the manager's likely to be looking for a new job, whilst the engineer will still be there happily working away.The ultimate company bosses always get paid much more, but the same arguement applies for them as for the engineer's manager. Ultimately the people on higher grades must be paid more than those lower down, or who'd do that job? It might appear that it's just sitting in an office all day and watching the cash roll in, but it really isn't...
I'm not claiming that they have an easy job, or don't deserve rewards, just that perhaps they get too much credit these days. When a whole team pulls together and achieves something it is not just because their manager inspired them, the individuals themselves have put the extra in as well.
Anyway, I think we are getting off topic and I'm not even quite sure where I was going with that anymore!
oOTomOo said:
Sonic said:
The rich already have money, and are generally good at using their time to make money.
The poordon't have much money, so are already on the back-foot, and most are generally not good at using their time to make money.
I fixed that for you..The poor
I have no problem with some people earning more than me,what does concern me is the widening gap between the rich and poor.
It cannot be good for a society when the differential is so huge,it breeds discontentment and unrest.
When short term results are encouraged,at the expense of stability of company growth,and there are few repercussions for greed and reckless behaviour then we end up where we are now.
Years ago an ordinary Joe was able to believe that if he worked hard by middle age he would have a house ,a good standard of living and a decent pension,not nowadays.
I have done fairly well,working 10/12 hour days ,6 days a week for many years but I an concerned about the future for my adult children.
It cannot be good for a society when the differential is so huge,it breeds discontentment and unrest.
When short term results are encouraged,at the expense of stability of company growth,and there are few repercussions for greed and reckless behaviour then we end up where we are now.
Years ago an ordinary Joe was able to believe that if he worked hard by middle age he would have a house ,a good standard of living and a decent pension,not nowadays.
I have done fairly well,working 10/12 hour days ,6 days a week for many years but I an concerned about the future for my adult children.
avinalarf said:
I have no problem with some people earning more than me,what does concern me is the widening gap between the rich and poor.
How does that work? To illustrate my point let's keep this from getting personal and consider two earners, A and B.Keep lifestyle and outgoings as very similar or identical for these people A and B.
A earns more than B.
The wealth gap between A and B will increase purely because A earns more. It's inevitable.
How can there be a problem with the result but not the cause?
Apart from that, there's no acceptable universal definition of rich and poor in any case.
If the poor are getting wealthier, whatever poor means, it doesn't matter whether the rich are getting richer faster, except as a point of envy.
If it matters, due to some real or imaginary threat of social unrest, this basically excuses unlawful behaviour predicated on jealousy. For the vast majority of people there are always going to be others earning more and increasing the wealth gap. It's just 'so what'.
What's clear is that the income and wealth of other people is irrelevant to one subgroup in society, this is definitely the case as I'm in that subgroup and have read posts from other PHers saying the same, whereas what other people earn and possess gets another subgroup into a hyper-aggravated state.
The rage subgroup tends to contain socialists to one degree or another but that's another thread.
turbobloke said:
If the poor are getting wealthier, whatever poor means, it doesn't matter whether the rich are getting richer faster, except as a point of envy.
If it matters, due to some real or imaginary threat of social unrest, this basically excuses unlawful behaviour predicated on jealousy. For the vast majority of people there are always going to be others earning more and increasing the wealth gap. It's just 'so what'.
Absolutely.If it matters, due to some real or imaginary threat of social unrest, this basically excuses unlawful behaviour predicated on jealousy. For the vast majority of people there are always going to be others earning more and increasing the wealth gap. It's just 'so what'.
Having a dogmatic rule such as "widening gap = bad" is absurd.
If the poor are better off with a wider gap than narrower you would have to be Marx to prefer the latter.
turbobloke said:
If it matters, due to some real or imaginary threat of social unrest, this basically excuses unlawful behaviour predicated on jealousy. For the vast majority of people there are always going to be others earning more and increasing the wealth gap. It's just 'so what'.
Erm, what?I don't think you've understood what the gap is actually about.
Landlords are a good example, although you can substitute in mortgage lender or property developer if you feel particularly aggrieved by it. Oversimplified, but you typically and inherently only become a landlord by having wealth, and then you use that wealth to make profit from those who have less wealth. Scale that up to a whole system and society, and money flows from poor to rich without rich putting in any real effort. That's a widening wealth gap, not the fact that A earns X and B earns Y.
trashbat said:
rm, what?
I don't think you've understood what the gap is actually about.
Landlords are a good example, although you can substitute in mortgage lender or property developer if you feel particularly aggrieved by it. Oversimplified, but you typically and inherently only become a landlord by having wealth, and then you use that wealth to make profit from those who have less wealth. Scale that up to a whole system and society, and money flows from poor to rich without rich putting in any real effort. That's a widening wealth gap, not the fact that A earns X and B earns Y.
Many landlords start out with a deposit less than an ordinary car. I don't think you've understood what the gap is actually about.
Landlords are a good example, although you can substitute in mortgage lender or property developer if you feel particularly aggrieved by it. Oversimplified, but you typically and inherently only become a landlord by having wealth, and then you use that wealth to make profit from those who have less wealth. Scale that up to a whole system and society, and money flows from poor to rich without rich putting in any real effort. That's a widening wealth gap, not the fact that A earns X and B earns Y.
And of course, they take on no risk whatsoever, and you never hear of them going bust.
trashbat said:
rm, what?
I don't think you've understood what the gap is actually about.
Landlords are a good example, although you can substitute in mortgage lender or property developer if you feel particularly aggrieved by it. Oversimplified, but you typically and inherently only become a landlord by having wealth, and then you use that wealth to make profit from those who have less wealth. Scale that up to a whole system and society, and money flows from poor to rich without rich putting in any real effort. That's a widening wealth gap, not the fact that A earns X and B earns Y.
What in the good lord's name are you talking about??I don't think you've understood what the gap is actually about.
Landlords are a good example, although you can substitute in mortgage lender or property developer if you feel particularly aggrieved by it. Oversimplified, but you typically and inherently only become a landlord by having wealth, and then you use that wealth to make profit from those who have less wealth. Scale that up to a whole system and society, and money flows from poor to rich without rich putting in any real effort. That's a widening wealth gap, not the fact that A earns X and B earns Y.
Making income on an investment is a fundamental necessity for any functioning society (with a level of sophistication beyond cavemen).
You should phone up the founders of Facebook, Twitter, eBay, Amazon and Google and tell them they would be better off without any start-up funding.
Don't forget to let that new restaurant owner know that he has to shut down because the bank won't lend him any money now.
You are mad!!
Justayellowbadge said:
Many landlords start out with a deposit less than an ordinary car.
And of course, they take on no risk whatsoever, and you never hear of them going bust.
I don't know what ordinary cars you buy And of course, they take on no risk whatsoever, and you never hear of them going bust.
A house deposit is wealth. I didn't say it was risk-free (what is?) but it's not an opportunity afforded to those who live hand-to-mouth, and really the point is not where the divide lies, merely that it increases it.
Suppose instead that this wannabe landlord sets up a factory making some new widget, creating thousands of well paid jobs. That has the potential to narrow the gap between rich and poor, although of course it may not.
turbobloke said:
How does that work? To illustrate my point let's keep this from getting personal and consider two earners, A and B.
Keep lifestyle and outgoings as very similar or identical for these people A and B.
A earns more than B.
The wealth gap between A and B will increase purely because A earns more. It's inevitable.
How can there be a problem with the result but not the cause?
What about when A and B start from different places - A is born rich and B is born poor.Keep lifestyle and outgoings as very similar or identical for these people A and B.
A earns more than B.
The wealth gap between A and B will increase purely because A earns more. It's inevitable.
How can there be a problem with the result but not the cause?
A coasts through life whereas B is a grafter who works harder than anyone else in an attempt to get ahead.
What should happen (IMHO) is that B is rewarded for his efforts and will one day equal or surpass A.
The problem comes if A's lower outgoings and greater assets allow him to continue to increase his wealth without effort at a rate that B can never match however hard he works. That is unfair (again IMHO) and worse than that, it removes the incentive for B to work hard for the future. Not the fault of A, but the fault of the society that sets the rules in such a way that this can occur.
trashbat said:
don't know what ordinary cars you buy
A house deposit is wealth. I didn't say it was risk-free (what is?) but it's not an opportunity afforded to those who live hand-to-mouth, and really the point is not where the divide lies, merely that it increases it.
Suppose instead that this wannabe landlord sets up a factory making some new widget, creating thousands of well paid jobs. That has the potential to narrow the gap between rich and poor, although of course it may not.
http://www.rightmove.co.uk/property-for-sale/prope...A house deposit is wealth. I didn't say it was risk-free (what is?) but it's not an opportunity afforded to those who live hand-to-mouth, and really the point is not where the divide lies, merely that it increases it.
Suppose instead that this wannabe landlord sets up a factory making some new widget, creating thousands of well paid jobs. That has the potential to narrow the gap between rich and poor, although of course it may not.
Deposit on this would be the same as the very cheapest new car, a Dacha Sandero.
Edited by Justayellowbadge on Thursday 17th April 15:20
walm said:
What in the good lord's name are you talking about??
Making income on an investment is a fundamental necessity for any functioning society (with a level of sophistication beyond cavemen).
You should phone up the founders of Facebook, Twitter, eBay, Amazon and Google and tell them they would be better off without any start-up funding.
Don't forget to let that new restaurant owner know that he has to shut down because the bank won't lend him any money now.
You are mad!!
As far as I'm able to self-determine such a thing, I'm not mad, no.Making income on an investment is a fundamental necessity for any functioning society (with a level of sophistication beyond cavemen).
You should phone up the founders of Facebook, Twitter, eBay, Amazon and Google and tell them they would be better off without any start-up funding.
Don't forget to let that new restaurant owner know that he has to shut down because the bank won't lend him any money now.
You are mad!!
Are you drunk?
If not then perhaps you can just re-familiarise yourself with the title of the thread, then explain to what degree Facebook widens the gap between rich and poor?
Justayellowbadge said:
http://www.rightmove.co.uk/property-for-sale/prope...
Deposit on this would be the same as the very cheapest new car, a Dacha Sandero.
A comparative rip-off; you can buy some Liverpudlian housing stock for £1. Deposit on this would be the same as the very cheapest new car, a Dacha Sandero.
Do you suppose that the renting tenants of Dewsbury Road can afford to buy? I don't know, maybe they can.
Mr Will said:
That is unfair (again IMHO) and worse than that, it removes the incentive for B to work hard for the future.
Rubbish.Unless B is some green-eyed loon he doesn't particularly give a flying f
k how wealthy A is.What he cares about is whether he can put food on the table, keep a roof over his head etc... etc...
This is simply astonishing that you should even think this let alone post it with sincerity.
Just because Bill Gates and Warren Buffet earn more than my wildest dreams of avarice has NOTHING - ABSOLUTELY NOTHING to do with my incentive to work very very hard indeed to provide for my family.
"Boo hoo the lord of the manor is more wealthy than me... I am not going to bother even going to work..."
"But darling, the children will starve."
"I don't care. Unless I can earn as much as the lord of the manor why would I bother getting up in the morning..."
Mental. Just mental.
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