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Not that I necessarily agree with them, but some people would say that your index fund is stealing from the poor in a sense, because corporate profits (distribu

Not that I necessarily agree with them, but some people would say that your index fund is stealing from the poor in a sense, because corporate profits (distributed to you, the shareholder, as dividends) are derived from exploiting the working class, when they could be raising wages instead. This is obviously not the entire story, because the economy certainly has grown historically and continues to grow, and that growth comes from somewhere. But it is plausible that some amount of wealth accumulation does come at the detriment of the poor.

davesmith1983 7y ago
Well labour prices (for whatever the industry is) is driven by market forces. The Salary / Rate has to match the market expectations. If the market rate is artificially inflated (minimum hourly wage) then companies will find a way to automate those jobs away. I am sure people will say that this would have happened anyway with certain unskilled labour jobs but you could argue that this only further incentivises them. I would argue that the UK fast food chains and supermarkets are a good case study to illustrate this. In the UK most of the cashier staff are slowly being removed. Now they normally have 6 - 10 checkouts that are automated and have the customer scan their own items. Tesco (that where I normally go) instead of having 10 checkout staff you can buy 10 machines that are managed by one or two people at most. All the machines in the major supermarkets are using the same vendor for their machines and the software appears to the same for each supermarket but skinned, with the only exception being the german supermarkets. Similarly at the other end of the scale in the UK. A C# .NET + MVC + JS with some SQL Server experience contract rate is about £350-400 a day. In London because developers expect higher rates (and the higher cost of living pushed the rate up by about £100-200 a day.
- twanvl 7y ago
  Raising wages are not the only way to make the poor relatively richer. There is also all kinds of taxation and welfare programs.
- ABCLAW 7y ago
  >Well labour prices (for whatever the industry is) is driven by market forces. [...] If the market rate is artificially inflated [...] First, are all markets just markets? Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true?
  - davesmith1983 7y ago
    > First, are all markets just markets? I am not sure what you mean by this. > Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Regarding artificial depression. Well this is where we get into some somewhat controversial territory. Some will argue that immigration artificially depresses wages as you can artificially increase the supply of labour and thus drive down the prices. Those that are conspiratorially minded would claim that large companies would make efforts to lobby Political parties to have a more open doors policy on immigration. Now there is some evidence of the market rate being depressed due to immigration e.g. construction wages have increased in the UK after the "Leave Vote". https://www.theguardian.com/business/2019/jun/24/construction-pay-rises-as-eu-workers-weigh-up-leaving-uk-survey-brexit https://www.theguardian.com/business/2019/jun/24/constructio... But I remember reading about a Bank of England report which is somewhat recent and this is the published paper: https://www.bankofengland.co.uk/working-paper/2015/the-impact-of-immigration-on-occupational-wages-evidence-from-britain https://www.bankofengland.co.uk/working-paper/2015/the-impac... However the stats themselves go over my head. I have google'd around for a simplified explanation (because I don't trust any of the newspapers to be honest as they will each push their own agenda). It appears that the effect on a native workers on minimum wage would have only lost less than a penny per hour due to immigration. A penny per hour is a rounding error for most people. However that seems to be at Odds at what we have seen recently with construction. So I don't know what to think tbh and I won't claim to be any definitive authority on the matter. > Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true? Sorry it isn't clear what you are asking me to compare.
- qwsxyh 7y ago
  I wonder how people can think "we must let the companies oppress us as hard as possible or else they will fuck us entirely" and not think we live in a literal dystopia.
  - deleted 7y ago
    [deleted]
mLuby 7y ago
Technically yes, but the key difference is that those index funds are equally available to rich and poor, and the returns are the same for everyone (mostly). Contrast that with the plethora of wealth-increasing opportunities that are not available without a large initial investment or the connections or power that comes with existing wealth.
- tasty_freeze 7y ago
  Your claim is the flip side to the joke that goes something like, "The law is blind to class: it is equally illegal for a rich man to sleep under a bridge as it is for the poor man." The point being: a large fraction of the population in the US is living paycheck to paycheck and has no money to spare for investing in an index fund.
  - umvi 7y ago
    And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto (at least my pack-a-day neighbors do). $3k per year in an index fund is certainly not insignificant.
    - gruez 7y ago
      >And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto being poor impairs your cognition[1], so it's not surprising that they are wasting money on stuff like that. [1] random google result: https://www.scientificamerican.com/article/how-poverty-affects-the-brain/ https://www.scientificamerican.com/article/how-poverty-affec...
      - logicprog 7y ago
        I'd imagine that the people they studied in Bangladesh in that article are a lot more poor than basically anyone in the US, especially people with $3k to spare on anything. And if you were to find evidence of poorer people having impaired decision-making skills in the US (and there might be evidence of that), the question becomes, are they as poor as they are because of that poor decision making?

davesmith1983 7y ago

Well labour prices (for whatever the industry is) is driven by market forces. The Salary / Rate has to match the market expectations. If the market rate is artificially inflated (minimum hourly wage) then companies will find a way to automate those jobs away. I am sure people will say that this would have happened anyway with certain unskilled labour jobs but you could argue that this only further incentivises them. I would argue that the UK fast food chains and supermarkets are a good case study to illustrate this. In the UK most of the cashier staff are slowly being removed. Now they normally have 6 - 10 checkouts that are automated and have the customer scan their own items. Tesco (that where I normally go) instead of having 10 checkout staff you can buy 10 machines that are managed by one or two people at most. All the machines in the major supermarkets are using the same vendor for their machines and the software appears to the same for each supermarket but skinned, with the only exception being the german supermarkets. Similarly at the other end of the scale in the UK. A C# .NET + MVC + JS with some SQL Server experience contract rate is about £350-400 a day. In London because developers expect higher rates (and the higher cost of living pushed the rate up by about £100-200 a day.

twanvl 7y ago
Raising wages are not the only way to make the poor relatively richer. There is also all kinds of taxation and welfare programs.
ABCLAW 7y ago
>Well labour prices (for whatever the industry is) is driven by market forces. [...] If the market rate is artificially inflated [...] First, are all markets just markets? Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true?
- davesmith1983 7y ago
  > First, are all markets just markets? I am not sure what you mean by this. > Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Regarding artificial depression. Well this is where we get into some somewhat controversial territory. Some will argue that immigration artificially depresses wages as you can artificially increase the supply of labour and thus drive down the prices. Those that are conspiratorially minded would claim that large companies would make efforts to lobby Political parties to have a more open doors policy on immigration. Now there is some evidence of the market rate being depressed due to immigration e.g. construction wages have increased in the UK after the "Leave Vote". https://www.theguardian.com/business/2019/jun/24/construction-pay-rises-as-eu-workers-weigh-up-leaving-uk-survey-brexit https://www.theguardian.com/business/2019/jun/24/constructio... But I remember reading about a Bank of England report which is somewhat recent and this is the published paper: https://www.bankofengland.co.uk/working-paper/2015/the-impact-of-immigration-on-occupational-wages-evidence-from-britain https://www.bankofengland.co.uk/working-paper/2015/the-impac... However the stats themselves go over my head. I have google'd around for a simplified explanation (because I don't trust any of the newspapers to be honest as they will each push their own agenda). It appears that the effect on a native workers on minimum wage would have only lost less than a penny per hour due to immigration. A penny per hour is a rounding error for most people. However that seems to be at Odds at what we have seen recently with construction. So I don't know what to think tbh and I won't claim to be any definitive authority on the matter. > Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true? Sorry it isn't clear what you are asking me to compare.
qwsxyh 7y ago
I wonder how people can think "we must let the companies oppress us as hard as possible or else they will fuck us entirely" and not think we live in a literal dystopia.
- deleted 7y ago
  [deleted]

mLuby 7y ago

Technically yes, but the key difference is that those index funds are equally available to rich and poor, and the returns are the same for everyone (mostly). Contrast that with the plethora of wealth-increasing opportunities that are not available without a large initial investment or the connections or power that comes with existing wealth.

tasty_freeze 7y ago
Your claim is the flip side to the joke that goes something like, "The law is blind to class: it is equally illegal for a rich man to sleep under a bridge as it is for the poor man." The point being: a large fraction of the population in the US is living paycheck to paycheck and has no money to spare for investing in an index fund.
- umvi 7y ago
  And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto (at least my pack-a-day neighbors do). $3k per year in an index fund is certainly not insignificant.
  - gruez 7y ago
    >And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto being poor impairs your cognition[1], so it's not surprising that they are wasting money on stuff like that. [1] random google result: https://www.scientificamerican.com/article/how-poverty-affects-the-brain/ https://www.scientificamerican.com/article/how-poverty-affec...
    - logicprog 7y ago
      I'd imagine that the people they studied in Bangladesh in that article are a lot more poor than basically anyone in the US, especially people with $3k to spare on anything. And if you were to find evidence of poorer people having impaired decision-making skills in the US (and there might be evidence of that), the question becomes, are they as poor as they are because of that poor decision making?