12 ms·

When work doesn't pay for the middle class

100 points by viggity 17y ago

bediger 17y ago
Isn't this just another example of Forbes pandering to the ultra-rich? You know: "Any improvement of services/policies towards the riff-raff will bring down the Country!" Forbes: Crypto-fascist puppet of the Imperialistic Elite since 1955!
- dgordon 17y ago
  Did you actually say something, or just toss out a bunch of epithets that have nearly lost all meaning? I'll address one: 120k/year is a long, long way from "ultra-rich."
deleted 17y ago
[deleted]
- nazgulnarsil 17y ago
  the only thing that consistently makes people happy (as opposed to just content, food, shelter etc.) is having higher status than their peers. thus human happiness has a zero-sum component.
  - lmkg 17y ago
    The only thing that consistently makes people happy is dopamine. People get that from a lot of things. Some people even get it from helping other people, rather than ruling them. Hell, some people get it from having a lower status than other people (and a ball gag).
    - nazgulnarsil 17y ago
      sure, at the margins. if we're talking about social science we're always talking about correlation, trends, etc.
  - lukifer 17y ago
    Status is often context-specific to a given social environment, meaning it's not necessarily zero-sum. Mom can have the highest status in her church group, Dad can have the highest status of the household by being breadwinner, and Junior can be subordinate to both while holding the highest status in his World of Warcraft guild. Nearly everybody has a high status in at least one arena and a low status in another.
    - nazgulnarsil 17y ago
      this is interesting enough to follow up on. thanks for the lead.
nazgulnarsil 17y ago
the disincentive to work is very real, it is not a bogeyman of the free market advocates. that said, it's also a common mistake of free marketers to think of a work disincentive as inherently bad. people would do well to remember that economic statements in themselves are value free: If you do X, Y will happen. it says nothing about whether Y is good or bad. That is up to the people Y affects to decide for themselves.
- access_denied 17y ago
  Good comment. Going to "work" is not the only way an individual can be beneficial to society.
  - watmough 17y ago
    If you're dis-incented to work, that may allow you to lead a better life on less, say one partner earning instead of both, whilst someone who needs a primary income will take that higher paying job. Don't underestimate the beneficial effect of one person being able to stay home, look after a house, cook fresh food, save on childcare, consume less fuel etc etc.
    - CWuestefeld 17y ago
      That sounds like the broken window fallacy to me.
      - nostrademons 17y ago
        Having a parent at home is a broken window?
        CWuestefeld 17y ago
        See http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window In a nutshell, it's the story of kids playing baseball and accidentally hitting a ball through someone's window. The fallacy is that by breaking the window, they've helped out the economy. The homeowner will now pay the glazier to fix it, whose wife will now have money to buy a new dress, etc. It's a fallacy because it ignores the productivity that the money would have resulted in had it been used for its original intent. Perhaps his car needs new tires, or whatever -- but there was something that the homeowner would have preferred but for the necessity created by the ball. By analogy, perhaps the hypothetical second parent, who is now staying home, might instead be a doctor helping people, or a teacher, or even a garbage collector. Whatever, it's something that we would have gotten had it not been for this disruption.
ajross 17y ago
I'm not following some of this. It's true that the marginal benefits of salary changes for wealthy[1] parents with children in private (US) colleges who also are applying for a mortgage payment reduction on homes they can't afford is very small. And for these folks, it may be very tempting to take a part time position[2] instead of working harder. But needless to say, that's a rather small population. The article is cherry picking this small population[3] of kinda-sorta-unfortunates (they're still making $120k a year!) and using it to argue against a bunch of government programs that provide real benefits to people with a fraction of their income. Could things be tuned better? Yeah. Benefits programs are filled with this kind of unintended side effect. But to write this kind of blanket argument cautioning against them seems awfully partisan to me. It's a fairly typical right-wing Forbes editorial in journalism clothing. [1] $120k per year is in the top 10th percentile or thereabouts -- it's at the very edge of what most people would consider "middle class". [2] NOT simply a lower paying one, as the article implies. A lower paying position is still full time work, after all. The contention that making less is "bad for the economy" isn't really sound. Downward wage pressure in high-paying jobs is a good thing for the export economy and a good thing for profits (companies are paying historically high fractions to their most highly compensated employees). [3] That is: gate the income to a small range just big enough to be affected by the loss of financial and mortgage aid, but not so big that it dillutes back to the overall tax rate of ~38%. Then pick out only the people who actually need that tuition and mortgage aid: parents with both underwater mortgages and privately-school children in the right 4-year age range. If this isn't cooking the books, I don't know what qualifies.
- wmf 17y ago
  A lower paying position is still full time work, after all. There's 9-to-5 full time and there's chained-to-your-Blackberry, I'm-going-to-need-you-to-come-in-on-Sunday full time.
  - ajross 17y ago
    Either or both of which might be true of the $60k or $120k position. That's another problem with the article (and your response): it's making the assumption that salary correlates directly with hours worked. Clearly it doesn't, as we all know from experience. There are "easy" six-figure jobs out there, and some folks burning out in $30k office work. The point is that it's a big world with lots and lots of variation. This particular woman has a financial incentive to work less. But to argue that we need to drop (or "reconsider the effects of", as the article euphemizes) assistance programs like financial aid or mortgage relief based on her particular situation is ridiculous.
yardie 17y ago
Seems like not a lot has changed since I went to school. It seems like universities cater for the very poor and the very rich. The middle class is left to carry the brunt of education costs. Also, welfare isn't indefinite. Most states require you to take a job, any job, or they reduce your benefits. This is the legislation that came out of the Clinton era (when Gingrich was claiming welfare queens were living it up by having 7-10 kids). I'm glad that I'm still young and healthy. It's one thing to drop COBRA in your 20s, quite another to do it in your 40s.
- jbooth 17y ago
  It's not specific to universities. Go take a look at a chart of middle class salaries over the last 30 years, adjusted for inflation. Looks awfully flat, right?
  - smokinn 17y ago
    Elizabeth Warren wrote an excellent article about that last year: http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html http://www.huffingtonpost.com/elizabeth-warren/america-witho...
    - gruseom 17y ago
      That is a good article, thanks. Every time I hear/read something by Elizabeth Warren I come away thinking that she is a voice of unusual sanity. Pity that her oversight work isn't amounting to anything.
- barrkel 17y ago
  The middle class generally pays the brunt of taxes everywhere. The poor don't have enough money, while the rich are too powerful and too mobile, besides having wealth locked up in capital structures that would also hurt businesses to tax.
fortes 17y ago
> How did a middle-class single mom wind up with a 79% marginal tax rate? At $120,000 she would pay $16,500 a year more in federal and state taxes, wouldn't qualify for the five-year $12,000-a-year cut in her mortgage payments she's applying for and would be eligible for $19,000 a year less in need-based college financial aid. It's a bit disingenuous to include lack of financial aid as a "tax" on her income .I assume the college is private? Regardless, she's not paying another $19,000 to the government, just not getting it in aid from another institution. Without the financial aid "tax", her marginal tax rate is 47.5% for that $60,000. Not great, but not absurdly high considering it includes federal and state taxes (which in NY are quite high). > Work isn't the only middle-class virtue that is getting punished. The system penalizes savings, too--not just through taxes, but also through programs that reward debtors, the profligate and college families that show up at the financial aid office with empty pockets. Yet another series of tax and benefit rules penalizes marriage. As a non-homeowner and big saver, I agree :) I think the real issue here is that tax code is far too complex, filled with favors and subsidies left and right that complicate matters (think spaghetti code).
araneae 17y ago
My mother didn't bother working at all when she lost her job and I was in college, for exactly this reason.
idm 17y ago
Ugh... Since Forbes can probably make this argument based only on the facts, why did they have to invent a "79% tax rate" for this person? It's simply not true. Paying college tuition is not tax, and student financial aid usually does not take the form of a tax rebate. Therefore, including this in their "79% bogeyman" is inaccurate. Furthermore, paying your home mortgage is not a tax, and relief on your mortgages may or may not take the form of a tax rebate. Again, it is inaccurate to lump this into the so-called 79% tax rate. Forbes made this even worse by applying these expenses to the top 60,000 of the person's 120,000 income, and calling the entire thing the "marginal tax rate." By my calculations, we're talking about a 27.5% marginal tax rate on the top 60k of her income, and then whatever the tax rate would be on her lower 60k of income. I'm going to estimate the tax rate is something like 20%, which is far less horrifying than 79%. It's still true that income differences will affect financial aid and mortgage payments, so Forbes should point that out, but it's totally irresponsible to call this a 79% tax rate.
- marvin 17y ago
  Semantics. The effect of the incentive rules quoted in the article is that by taking the higher-paying job, the woman will end up with 20% more money while working twice as hard. I see the same thing in Norway: If you are able to hold a great-paying job (equivalent to 200,000 USD a year, for instance, typical for a hard-working oil industry consultant), the marginal tax greatly reduces the value you get from your extra effort. (Typical numbers here are 35% tax on everything up to 50000 USD, increasing to 55% for everything above 130000 USD). Given that you invariably work your ass off in jobs like these, the prospect doesn't seem very tempting. Why work twice as hard when you only get 50% more money? You can't even work hard one year and slack the next, because it doesn't pay. The problem is that you want as many people as possible to do the best work they can do. The effect of tax/incentive rules such as these is that the government is telling people capable of holding high-paying jobs to start slacking. This is bad on many levels.
  - skorgu 17y ago
    > ... 20% more money while working twice as hard. The idea that there's such a correlation between pre-tax income and expended effort is...profoundly difficult to accept without substantial evidence.
nopinsight 17y ago
If the parameters are set right, this could potentially increase the overall happiness of the society. Anyone ever wonders why we earn so much more than our parents and grandparents, yet we're not any happier? Data shows that inter-generational happiness stays the same, despite the fact that within the same society during the same time period, richer people are actually happier on average. My hypothesis is that greater material wealth in the recent past comes with serious human toll. Higher competition at all levels. Larger and larger gaps between the rich and the poor, the skilled and the unskilled, the well-connected and the commoner. These effects offset the materials comfort we gain from all these fantastic technological innovations. Focus on and competition for material wealth does shift us away from certain communal bonds & feelings. To experience an extreme case, try visit a middle- or lower-end shopping mall in China, you can feel the intense greed and competitiveness between sellers. That's hyper-competition at work. We feel it a bit more abstractly in a developed country. But it's certainly there. I bet many people who has watched Avatar actually want to live as a Navi'. Their lack of material wealth and powerful technologies are more than compensated for by community bonds, closeness to the beauty of nature, and minimal competition for status. Such a community actually exists. Many of them can be found in a more remote part of the world. Bhutan and certain communities of Buddhist monks, for example, come to mind. For more on this, I recommend this TED talk by Matthieu Ricard on the habits of happiness: http://www.ted.com/talks/lang/eng/matthieu_ricard_on_the_habits_of_happiness.html http://www.ted.com/talks/lang/eng/matthieu_ricard_on_the_hab... and the book Happiness: Lessons from a New Science by a noted British economist Richard Layard http://www.amazon.com/Happiness-Lessons-Science-Richard-Layard/dp/0143037013/ http://www.amazon.com/Happiness-Lessons-Science-Richard-Laya...
- 100k 17y ago
  Rather than increased competition, I think the reason we are not happier is that wealth levels have risen for all classes[1]. Materially we are better off than our ancestors but relatively speaking we are the same. Most people would prefer to have higher status than higher wealth. For details, I recommend the excellent book "Choosing the Right Pond: Human Behavior and the Quest for Status" by economist Robert H. Frank. http://www.amazon.com/Choosing-Right-Pond-Behavior-Status/dp/0195049454 http://www.amazon.com/Choosing-Right-Pond-Behavior-Status/dp... [1] There is no question that we are all materially better off than previous generations. However considering the 30 years of stagnating middle class incomes, whether this will be true in the future is up for debate. If the middle class starts declining relative to the super-rich expect major unhappiness.
jsz0 17y ago
I don't really understand some of the assumptions made here. It sounds like someone making $60k a year is simply not eligible for programs designed to help people making say $35k a year. Is that wrong? $60k/year is a pretty good amount of money. Opting out of a better job to avoid paying taxes on your increased income is a really bad career choice. All of the tax rates level out. So maybe $100k isn't a great spot to be in but you're not going to get to $150k by opting for the $60k/year job are you? This article just spews out entitlement. I can't stomach people making $60k+ year crying about how hard their life is. Try living on $20k/year and see how that works out for you.
- onoj 17y ago
  I think what the article was trying to say is that someone earning 120K is worse off or the same as someone earning 60K - so there is no benefit in earning more money in some cases - you will get no real benefit from that money, you will just have to pay it out for things that others get for free. I think (again) that the issue was that really high earners 300k plus have real benefits from the money but everyone from 150k down is screwed. But i could be wrong.
- fburnaby 17y ago
  >> Try living on $20k/year and see how that works out for you. Granted, I'm single and don't have kids, but even living on $20,000/yr right now isn't bad. I can't have a car, but other than that, I can make any small (<$500) purchase I want without any real worry. Tell me I only get $14,000 and I'll start to worry.
deleted 17y ago
[deleted]
Virax 17y ago
Holy cow - when you read this article right after this one: http://reason.com/archives/2006/03/01/why-poor-countries-are-poor/print http://reason.com/archives/2006/03/01/why-poor-countries-are... it really blows your mind. I think the nay-sayers are missing the point of this article - it doesn't matter if you are sympathetic to the family. You have to remember that the higher paying job isn't creating 2x the economic output - her choice to take the lower paying job means that: There is one fewer position making $120K There is one more position making $60K Now consider this: the $120K position is much more likely to be a management position, which, if done well, could create several $60K positions, lets say 3. This means that for the economy as a whole, there is one less $120K position and TWO fewer $60K positions. In my opinion this is very scary.
- Pahalial 17y ago
  Well this is just plain wrong. She has two positions available to her; her choosing the $60k one does not wink the $120k position out of existence, and there will certainly be someone else trying for that. Perhaps one of the many people who do not fall in the narrow description of "parent with a mortgage, two kids, one in college" that would make it such a seemingly terrible deal.
  - fburnaby 17y ago
    >> and there will certainly be someone else trying for that That deserves an award for understatement of the year. You could probably set up a five man brawl to the death for that job right now.
- gnosis 17y ago
  "Now consider this: the $120K position is much more likely to be a management position, which, if done well, could create several $60K positions, lets say 3." This does not follow. The task of the higher paid position might be to fire people, not hire them (especially in this economy).
- AlisdairO 17y ago
  This seems backwards to me. Traditionally, aren't managers appointed when there is a need to manage people doing work? You don't (generally) appoint a manager and then wait for them to somehow create the work that people would do.
galactus 17y ago
I have a problem with this part: "Given a choice between a part-time or easy job paying $60,000 and a demanding, stress-ridden job paying $120,000, Lederman would be wise to take the former" So, people making 60k a year have either part-time or "easy jobs" and those making 120k are working hard and contributing to the economy, right?

100 points by viggity 17y ago

Isn't this just another example of Forbes pandering to the ultra-rich? You know: "Any improvement of services/policies towards the riff-raff will bring down the Country!" Forbes: Crypto-fascist puppet of the Imperialistic Elite since 1955!

dgordon 17y ago
Did you actually say something, or just toss out a bunch of epithets that have nearly lost all meaning? I'll address one: 120k/year is a long, long way from "ultra-rich."

deleted 17y ago

[deleted]

nazgulnarsil 17y ago
the only thing that consistently makes people happy (as opposed to just content, food, shelter etc.) is having higher status than their peers. thus human happiness has a zero-sum component.
- lmkg 17y ago
  The only thing that consistently makes people happy is dopamine. People get that from a lot of things. Some people even get it from helping other people, rather than ruling them. Hell, some people get it from having a lower status than other people (and a ball gag).
  - nazgulnarsil 17y ago
    sure, at the margins. if we're talking about social science we're always talking about correlation, trends, etc.
- lukifer 17y ago
  Status is often context-specific to a given social environment, meaning it's not necessarily zero-sum. Mom can have the highest status in her church group, Dad can have the highest status of the household by being breadwinner, and Junior can be subordinate to both while holding the highest status in his World of Warcraft guild. Nearly everybody has a high status in at least one arena and a low status in another.
  - nazgulnarsil 17y ago
    this is interesting enough to follow up on. thanks for the lead.

nazgulnarsil 17y ago

the disincentive to work is very real, it is not a bogeyman of the free market advocates. that said, it's also a common mistake of free marketers to think of a work disincentive as inherently bad. people would do well to remember that economic statements in themselves are value free: If you do X, Y will happen. it says nothing about whether Y is good or bad. That is up to the people Y affects to decide for themselves.

access_denied 17y ago
Good comment. Going to "work" is not the only way an individual can be beneficial to society.
- watmough 17y ago
  If you're dis-incented to work, that may allow you to lead a better life on less, say one partner earning instead of both, whilst someone who needs a primary income will take that higher paying job. Don't underestimate the beneficial effect of one person being able to stay home, look after a house, cook fresh food, save on childcare, consume less fuel etc etc.
  - CWuestefeld 17y ago
    That sounds like the broken window fallacy to me.
    - nostrademons 17y ago
      Having a parent at home is a broken window?
      - CWuestefeld 17y ago
        See http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window In a nutshell, it's the story of kids playing baseball and accidentally hitting a ball through someone's window. The fallacy is that by breaking the window, they've helped out the economy. The homeowner will now pay the glazier to fix it, whose wife will now have money to buy a new dress, etc. It's a fallacy because it ignores the productivity that the money would have resulted in had it been used for its original intent. Perhaps his car needs new tires, or whatever -- but there was something that the homeowner would have preferred but for the necessity created by the ball. By analogy, perhaps the hypothetical second parent, who is now staying home, might instead be a doctor helping people, or a teacher, or even a garbage collector. Whatever, it's something that we would have gotten had it not been for this disruption.

ajross 17y ago

I'm not following some of this. It's true that the marginal benefits of salary changes for wealthy[1] parents with children in private (US) colleges who also are applying for a mortgage payment reduction on homes they can't afford is very small. And for these folks, it may be very tempting to take a part time position[2] instead of working harder. But needless to say, that's a rather small population. The article is cherry picking this small population[3] of kinda-sorta-unfortunates (they're still making $120k a year!) and using it to argue against a bunch of government programs that provide real benefits to people with a fraction of their income. Could things be tuned better? Yeah. Benefits programs are filled with this kind of unintended side effect. But to write this kind of blanket argument cautioning against them seems awfully partisan to me. It's a fairly typical right-wing Forbes editorial in journalism clothing. [1] $120k per year is in the top 10th percentile or thereabouts -- it's at the very edge of what most people would consider "middle class". [2] NOT simply a lower paying one, as the article implies. A lower paying position is still full time work, after all. The contention that making less is "bad for the economy" isn't really sound. Downward wage pressure in high-paying jobs is a good thing for the export economy and a good thing for profits (companies are paying historically high fractions to their most highly compensated employees). [3] That is: gate the income to a small range just big enough to be affected by the loss of financial and mortgage aid, but not so big that it dillutes back to the overall tax rate of ~38%. Then pick out only the people who actually need that tuition and mortgage aid: parents with both underwater mortgages and privately-school children in the right 4-year age range. If this isn't cooking the books, I don't know what qualifies.

wmf 17y ago
A lower paying position is still full time work, after all. There's 9-to-5 full time and there's chained-to-your-Blackberry, I'm-going-to-need-you-to-come-in-on-Sunday full time.
- ajross 17y ago
  Either or both of which might be true of the $60k or $120k position. That's another problem with the article (and your response): it's making the assumption that salary correlates directly with hours worked. Clearly it doesn't, as we all know from experience. There are "easy" six-figure jobs out there, and some folks burning out in $30k office work. The point is that it's a big world with lots and lots of variation. This particular woman has a financial incentive to work less. But to argue that we need to drop (or "reconsider the effects of", as the article euphemizes) assistance programs like financial aid or mortgage relief based on her particular situation is ridiculous.

yardie 17y ago

Seems like not a lot has changed since I went to school. It seems like universities cater for the very poor and the very rich. The middle class is left to carry the brunt of education costs. Also, welfare isn't indefinite. Most states require you to take a job, any job, or they reduce your benefits. This is the legislation that came out of the Clinton era (when Gingrich was claiming welfare queens were living it up by having 7-10 kids). I'm glad that I'm still young and healthy. It's one thing to drop COBRA in your 20s, quite another to do it in your 40s.

jbooth 17y ago
It's not specific to universities. Go take a look at a chart of middle class salaries over the last 30 years, adjusted for inflation. Looks awfully flat, right?
- smokinn 17y ago
  Elizabeth Warren wrote an excellent article about that last year: http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html http://www.huffingtonpost.com/elizabeth-warren/america-witho...
  - gruseom 17y ago
    That is a good article, thanks. Every time I hear/read something by Elizabeth Warren I come away thinking that she is a voice of unusual sanity. Pity that her oversight work isn't amounting to anything.
barrkel 17y ago
The middle class generally pays the brunt of taxes everywhere. The poor don't have enough money, while the rich are too powerful and too mobile, besides having wealth locked up in capital structures that would also hurt businesses to tax.

fortes 17y ago

> How did a middle-class single mom wind up with a 79% marginal tax rate? At $120,000 she would pay $16,500 a year more in federal and state taxes, wouldn't qualify for the five-year $12,000-a-year cut in her mortgage payments she's applying for and would be eligible for $19,000 a year less in need-based college financial aid. It's a bit disingenuous to include lack of financial aid as a "tax" on her income .I assume the college is private? Regardless, she's not paying another $19,000 to the government, just not getting it in aid from another institution. Without the financial aid "tax", her marginal tax rate is 47.5% for that $60,000. Not great, but not absurdly high considering it includes federal and state taxes (which in NY are quite high). > Work isn't the only middle-class virtue that is getting punished. The system penalizes savings, too--not just through taxes, but also through programs that reward debtors, the profligate and college families that show up at the financial aid office with empty pockets. Yet another series of tax and benefit rules penalizes marriage. As a non-homeowner and big saver, I agree :) I think the real issue here is that tax code is far too complex, filled with favors and subsidies left and right that complicate matters (think spaghetti code).

araneae 17y ago

My mother didn't bother working at all when she lost her job and I was in college, for exactly this reason.

idm 17y ago

Ugh... Since Forbes can probably make this argument based only on the facts, why did they have to invent a "79% tax rate" for this person? It's simply not true. Paying college tuition is not tax, and student financial aid usually does not take the form of a tax rebate. Therefore, including this in their "79% bogeyman" is inaccurate. Furthermore, paying your home mortgage is not a tax, and relief on your mortgages may or may not take the form of a tax rebate. Again, it is inaccurate to lump this into the so-called 79% tax rate. Forbes made this even worse by applying these expenses to the top 60,000 of the person's 120,000 income, and calling the entire thing the "marginal tax rate." By my calculations, we're talking about a 27.5% marginal tax rate on the top 60k of her income, and then whatever the tax rate would be on her lower 60k of income. I'm going to estimate the tax rate is something like 20%, which is far less horrifying than 79%. It's still true that income differences will affect financial aid and mortgage payments, so Forbes should point that out, but it's totally irresponsible to call this a 79% tax rate.

marvin 17y ago
Semantics. The effect of the incentive rules quoted in the article is that by taking the higher-paying job, the woman will end up with 20% more money while working twice as hard. I see the same thing in Norway: If you are able to hold a great-paying job (equivalent to 200,000 USD a year, for instance, typical for a hard-working oil industry consultant), the marginal tax greatly reduces the value you get from your extra effort. (Typical numbers here are 35% tax on everything up to 50000 USD, increasing to 55% for everything above 130000 USD). Given that you invariably work your ass off in jobs like these, the prospect doesn't seem very tempting. Why work twice as hard when you only get 50% more money? You can't even work hard one year and slack the next, because it doesn't pay. The problem is that you want as many people as possible to do the best work they can do. The effect of tax/incentive rules such as these is that the government is telling people capable of holding high-paying jobs to start slacking. This is bad on many levels.
- skorgu 17y ago
  > ... 20% more money while working twice as hard. The idea that there's such a correlation between pre-tax income and expended effort is...profoundly difficult to accept without substantial evidence.

nopinsight 17y ago

If the parameters are set right, this could potentially increase the overall happiness of the society. Anyone ever wonders why we earn so much more than our parents and grandparents, yet we're not any happier? Data shows that inter-generational happiness stays the same, despite the fact that within the same society during the same time period, richer people are actually happier on average. My hypothesis is that greater material wealth in the recent past comes with serious human toll. Higher competition at all levels. Larger and larger gaps between the rich and the poor, the skilled and the unskilled, the well-connected and the commoner. These effects offset the materials comfort we gain from all these fantastic technological innovations. Focus on and competition for material wealth does shift us away from certain communal bonds & feelings. To experience an extreme case, try visit a middle- or lower-end shopping mall in China, you can feel the intense greed and competitiveness between sellers. That's hyper-competition at work. We feel it a bit more abstractly in a developed country. But it's certainly there. I bet many people who has watched Avatar actually want to live as a Navi'. Their lack of material wealth and powerful technologies are more than compensated for by community bonds, closeness to the beauty of nature, and minimal competition for status. Such a community actually exists. Many of them can be found in a more remote part of the world. Bhutan and certain communities of Buddhist monks, for example, come to mind. For more on this, I recommend this TED talk by Matthieu Ricard on the habits of happiness: http://www.ted.com/talks/lang/eng/matthieu_ricard_on_the_habits_of_happiness.html http://www.ted.com/talks/lang/eng/matthieu_ricard_on_the_hab... and the book Happiness: Lessons from a New Science by a noted British economist Richard Layard http://www.amazon.com/Happiness-Lessons-Science-Richard-Layard/dp/0143037013/ http://www.amazon.com/Happiness-Lessons-Science-Richard-Laya...

100k 17y ago
Rather than increased competition, I think the reason we are not happier is that wealth levels have risen for all classes[1]. Materially we are better off than our ancestors but relatively speaking we are the same. Most people would prefer to have higher status than higher wealth. For details, I recommend the excellent book "Choosing the Right Pond: Human Behavior and the Quest for Status" by economist Robert H. Frank. http://www.amazon.com/Choosing-Right-Pond-Behavior-Status/dp/0195049454 http://www.amazon.com/Choosing-Right-Pond-Behavior-Status/dp... [1] There is no question that we are all materially better off than previous generations. However considering the 30 years of stagnating middle class incomes, whether this will be true in the future is up for debate. If the middle class starts declining relative to the super-rich expect major unhappiness.

jsz0 17y ago

I don't really understand some of the assumptions made here. It sounds like someone making $60k a year is simply not eligible for programs designed to help people making say $35k a year. Is that wrong? $60k/year is a pretty good amount of money. Opting out of a better job to avoid paying taxes on your increased income is a really bad career choice. All of the tax rates level out. So maybe $100k isn't a great spot to be in but you're not going to get to $150k by opting for the $60k/year job are you? This article just spews out entitlement. I can't stomach people making $60k+ year crying about how hard their life is. Try living on $20k/year and see how that works out for you.

onoj 17y ago
I think what the article was trying to say is that someone earning 120K is worse off or the same as someone earning 60K - so there is no benefit in earning more money in some cases - you will get no real benefit from that money, you will just have to pay it out for things that others get for free. I think (again) that the issue was that really high earners 300k plus have real benefits from the money but everyone from 150k down is screwed. But i could be wrong.
fburnaby 17y ago
>> Try living on $20k/year and see how that works out for you. Granted, I'm single and don't have kids, but even living on $20,000/yr right now isn't bad. I can't have a car, but other than that, I can make any small (<$500) purchase I want without any real worry. Tell me I only get $14,000 and I'll start to worry.

deleted 17y ago

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Virax 17y ago

Holy cow - when you read this article right after this one: http://reason.com/archives/2006/03/01/why-poor-countries-are-poor/print http://reason.com/archives/2006/03/01/why-poor-countries-are... it really blows your mind. I think the nay-sayers are missing the point of this article - it doesn't matter if you are sympathetic to the family. You have to remember that the higher paying job isn't creating 2x the economic output - her choice to take the lower paying job means that: There is one fewer position making $120K There is one more position making $60K Now consider this: the $120K position is much more likely to be a management position, which, if done well, could create several $60K positions, lets say 3. This means that for the economy as a whole, there is one less $120K position and TWO fewer $60K positions. In my opinion this is very scary.

Pahalial 17y ago
Well this is just plain wrong. She has two positions available to her; her choosing the $60k one does not wink the $120k position out of existence, and there will certainly be someone else trying for that. Perhaps one of the many people who do not fall in the narrow description of "parent with a mortgage, two kids, one in college" that would make it such a seemingly terrible deal.
- fburnaby 17y ago
  >> and there will certainly be someone else trying for that That deserves an award for understatement of the year. You could probably set up a five man brawl to the death for that job right now.
gnosis 17y ago
"Now consider this: the $120K position is much more likely to be a management position, which, if done well, could create several $60K positions, lets say 3." This does not follow. The task of the higher paid position might be to fire people, not hire them (especially in this economy).
AlisdairO 17y ago
This seems backwards to me. Traditionally, aren't managers appointed when there is a need to manage people doing work? You don't (generally) appoint a manager and then wait for them to somehow create the work that people would do.

galactus 17y ago

I have a problem with this part: "Given a choice between a part-time or easy job paying $60,000 and a demanding, stress-ridden job paying $120,000, Lederman would be wise to take the former" So, people making 60k a year have either part-time or "easy jobs" and those making 120k are working hard and contributing to the economy, right?