Low information voters (and their enablers) continually grouse about income inequality. For example, this article from Detroit’s more liberal paper tries to make the case that occupations such as nurses and ‘government employees’ should receive higher wages.
The remainder of occupations fall somewhere in between the lowest and highest earners. While the rest of these jobs are paid higher than minimum wage, many occupations deserve higher pay when you compare each worker’s salary to the pay received by the boss. Certain occupations, however, stand out as especially deserving of a higher paycheck. These are occupations that involve a high level of education, training, skills, or tenacity. The abilities and responsibilities of these workers are not at all reflected in their paychecks.
Low information voters will casually glance at this article and nod in agreement. The problem is both the low information voter, and the article’s author, miss the point.
The point is an individual’s compensation in a given occupation is based on the amount of revenue he or she generates for their employer (or themselves, if self employed). It doesn’t matter how much education, training, skills, or tenacity a person has. The amount of money you generate for your employer determines your wages, just as if you are self employed. It’s the free market at work.
For example you could attain a Master’s Degree in Puppetry, spend years training at the art, be a skilled puppeteer and work extremely hard at the craft. However, at the end of the day, your compensation as a freelancer (or working for whoever hires a puppeteer) will be based solely how much money people are willing to pay to watch your performance and nothing more.
Another argument populist politicians and their liberal activist supporters use to justify wage increases is that “income inequality” is rampant today and higher taxes are required on high wage earners so it can be redistributed it to lower earners. Just as a Socialist Democrat / Liberal makes a terrible economists, they also are terrible historians. Take a look at this list of the 30 wealthiest Americans of all time (adjusted for inflation).
#30: James C. Flood – Net Worth $34 Billion
#29: Peter AB Widener – Net Worth $35 Billion
#28: Collis Potter Huntington – Net Worth $36 Billion
#27: George Pullman – Net Worth $37 Billion
#26: Henry C. Frick – Net Worth $39.3 Billion
#25: Oliver H Payne – Net Worth $40.4 Billion
#24: JP Morgan – Net Worth $41.5 Billion
#23: Henry Huttleston Rogers – Net Worth $42.6 Billion
#22: Edward Henry Harriman – Net Worth $42.7 Billion
#21: John I Blair – Net Worth $47 Billion
#20: Russell Sage – Net Worth $47 Billion
#19: Moses Taylor – Net Worth $48.1 Billion
#18: William Weightman – Net Worth $48.1 Billion
#17: James G. Fair – Net Worth $49.2 Billion
#16: Andrew W. Mellon – Net Worth $50.5 Billion
#15: Richard B. Mellon – Net Worth $50.5 Billion
#14: Henry Ford – Net Worth $54 Billion
#13: Warren Buffett – Net Worth $64 Billion
#12: Sam Walton – Net Worth $65 Billion
#11: Marshall Field – Net Worth $66 Billion
#10: Stephen Van Rensselaer – Net Worth $68 Billion
#9: Jay Gould – Net Worth $71 Billion
#8: Friedrich Weyerhauser – Net Worth $80 Billion
#7: A.T. Stewart – Net Wort $90 Billion
#6: Stephen Girard – Net Worth $105 Billion
#5: John Jacob Astor – Net Worth $121 Billion
#4: Bill Gates – Net Worth $136 Billion
#3: Cornelius Vanderbilt – Net Worth $185 Billion
#2: Andrew Carnegie – Net Worth $310 Billion
#1: John D. Rockefeller – Net Worth $340 Billion
Note that combining the fortunes of Bill Gates and Warren Buffett, the duo only finish a distant third on the list.
Rockefeller was worth a staggering 1.53% of the total United States economy while Bill Gates, at the peak of the dot-com bubble, was worth 0.58% of the U.S. GNP. Looking at this list (with only two of the all-time wealthiest individuals alive today) it’s hard to believe that income inequality is worse today than it was at the turn of the last century.
Circling back to today, ignoring the left’s incessant drumbeat of “income inequality” and focusing on reality, due to economic growth today’s average Americans live like millionaires of the 1950′s.
Of course, all the drivel about “income inequality” is simply a ruse by leftist to vote into office even more hard-core leftists politicians into office and redistribute more income. If liberal activists were serious about workers earning more money, they would push getting the government off everyone’s back by cutting taxes (50% of workers income is consumed by taxation) effectively giving everyone a healthy net raise.
You know that won’t happen.