10 ms·

Ask HN: About Financial Inequity

31 points by parentheses 6y ago

If you are one who makes way more than the average or one who makes less (enough to scrounge) how do you feel about that? More, how do you think about it and approach others knowing where they are in the continuum? Do you feel you have empathy for the "opposite" end?

logicslave 6y ago
As an above average income earner, there is zero reason to feel any guilt, and any attempt to gin up guilt in people who make between 250-750k a year is completely misguided. The extreme wealth inequality does not come from the professional class, it is a result of the federal government and their monetary policy. When they print money, financial assets go through the roof making everyone who does not hold assets poor. This is not the fault of middle upper class Americans, and the idea that it is needs to stop.
- efrank02 6y ago
  How does printing money benefit the wealthy? It should devalue the money that they already have, benefitting the poor
  - st1x7 6y ago
    That's not always the case. In the last couple of big printing cycles, the newly created money ended up in financial assets (like stocks) that are predominantly owned by people on the top end of the wealth distribution.
  - logicslave 6y ago
    The wealthy almost never have their money in cash. They have it in assets. Real estate, stocks, bonds, derivatives, etc. It's poor people who have their money in cash
    - NetOpWibby 6y ago
      This just blew my mind.
      - tempmakesalot 6y ago
        It's much worse. Poor people have their money financed in depreciating assets.
        jklein11 6y ago
        Wouldn't inflation help these people? The depreciating assets may lose value less slowly. Sure, high inflation usually means higher interest rates, but that certainly hasn't been the case in the current environment. Also, you will be paying off the debt with the inflated salary.
        AnimalMuppet 6y ago
        In theory yes, in practice no. The problem is that, for these people, inflation comes first to their costs, and only second to their wages. Sure they get to pay back their car loan with cheaper money. But they also have to buy groceries, and the groceries went up. Meanwhile, the number of dollars they owe on their car didn't go down. Sometime later their wages will go up, but until then, they're hurting.
  - zanny 6y ago
    When the federal reserve prints money you, as a commoner, don't see a dime of it. The federal reserve only transacts new capital (because its not just raw bank notes, its financial securities in general) into a select cartel of national banks. Those banks, being private enterprise, are owned largely by the same class that owns everything else. If you own shares of the S&P 500 you own pieces of about ~two dozen banks. These are largely the banks that get treasury money which they then loan out at rates often fixed by the federal reserve in exchange for basically free money. And the trick with that money is that the bank isn't lending philanthropically, its lending to make a profit. So using the current environment as an example you aren't getting favorable bailout loan conditions from Bank of America just because the treasury gave them a hundred billion dollars to doll out, major corporations that want to use that nigh-free money to buy back stock or buy out competition get it. There are several branches on this tree of money flows but the economics of the last 50 years and particularly this depression from the botched COVID response only point towards the disconnect between the economy of the working poor and the economy of the owner class that gets to see the stock market hit all time record highs while the fed finally agrees to $600 stimulus checks when 50 million people are 6 months behind on rent. And if you want to see this mechanism in action in simplest terms, the fed bought 3 trillion in securities and the stock market recovered at about 30% rates to hit all time highs again after crashing in March. That kind of recovery is unprecedented and unheard of, but because of direct constant cash flow out of the fed all the investment panic dried up because free capital was flooding investors coffers to keep buying back in with. The dozen richest men all collectively became upwards of 50% richer this year as a direct consequence. Inflation won't come close to those gains.
    - reducesuffering 6y ago
      Source on 50 million 6 months behind on rent? A quick search didn't find 50, but only 18 million behind on rent by an untold amount of months[0]. [0]https://www.businessinsider.com/millions-of-americans-face-eviction-foreclosure-in-early-2021-2020-12 https://www.businessinsider.com/millions-of-americans-face-e...
      - cosmodisk 6y ago
  - Foober223 6y ago
    Most richer people diversify their wealth. You may be hard pressed to find a billionaire who actually has $1 billion in cash. Cash would most likely be the minority of their wealth. As inflation occurs, they do take a hit on their cash holdings. But their land, stocks, apartment complexes, etc may increase in value. > It should devalue the money that they already have, benefitting the poor Even if all people both rich and poor held all their wealth in the form of cash, that would certainly hurt the poor too. Say a poor person works 8 hours a day. His 8 hours of work grant him buying power of 3 meals. After inflation his 8 hours of work grant him buying power for only 2 meals. This is not just a theoretical, look at McDonalds meal prices, you can't get a sandwich for a $1 anymore. There are some benefits to inflation. It's cheaper to employ poor people willing to work the now cheaper paper. So it may create some new jobs that otherwise may never have been created.
  - deleted 6y ago
    [deleted]
  - hansvm 6y ago
    Lots of other factors too, but look closely at your word choices -- "wealth" vs "money." Wealth is mostly tied up in non-money assets (not that it necessarily has to be, but that's the state of things), whereas poor people have some small amount of cash, wages which don't track with inflation, and rent and expenses which do. As money is devalued, non-money assets continue to hold their value (increasing when denominated in dollars), and every financial instrument used by anyone at or below the low/middle middle class is royally shafted in comparison.
  - jklein11 6y ago
    I don't think the wealthy benefit from printing money. I just think they get hurt less than the poor. This article is a pretty interesting analysis of the effects of inflation.[1] 1.https://www.econstor.eu/bitstream/10419/70422/1/332991377.pdf https://www.econstor.eu/bitstream/10419/70422/1/332991377.pd...
- zanny 6y ago
  The idea won't stop so long as its a useful scapegoat to distract from the exact mechanism you described that creates the real inequality. Though its worth adding that in a stateless system capital would concentrate and accumulate because ownership is an inherent advantage in every transaction. So its not like having a government makes inequality, inequality is inherent to capitalism and its up to your society how much it wants to mitigate that effect, if at all, or to just make it worse the way the US regularly does via its monetary policy.
- jklein11 6y ago
  The idea that government intervention is what causes inequality really resonates with me, however, I'm not sure I buy it. In the last 15-20 years inflation has been historically low.
  - leereeves 6y ago
    I'd argue that the reported inflation rate (usually measured by the CPI) doesn't reflect the real cost of living. In the last ten years, rents in my city have doubled. In just the last five years, my average grocery bill has doubled. In just the last year, the average price of a used car has risen over 8%.[1] Meanwhile, the CPI has held remarkably steady at about 2% for 40 years. According to the CPI, the cost of living has only increased by 20% over the last ten years, which is just not believable. 1: https://www.cargurus.com/Cars/price-trends/ https://www.cargurus.com/Cars/price-trends/
    - Tycho 6y ago
      I suspect the recent spike in car prices is due to the pandemic. Over ten years the cost seems pretty much flat (even as cars have become more advanced). Also, cities that are booming will outpace the rest of the country for rent (and therefore grocery) costs. I think you need to look across many cities to get a reliable picture.
  - logicslave 6y ago
    Its financial asset inflation, not consumer product inflation.
    - jklein11 6y ago
      So is wealth inequality a financial asset issue and not a consumer product issue? Can you elaborate on the distinction?
      - AnimalMuppet 6y ago
        The government (and/or Fed) creates money. Stocks go up; bread doesn't. If I have to buy bread, I'm not instantly worse off. But if I own stocks, I'm instantly better off. Why do stocks go up? Because the money gets pumped into financial institutions, and from there into financial instruments. Why doesn't bread go up? Because the number of people who own large amounts of financial instruments, and who don't already buy as much bread as they want, is zero. But this situation - they're suddenly magically richer, and I'm not - magnifies existing wealth inequality.
- matt_s 6y ago
  Empathy is not guilt. I don't feel guilty because I've lucked into a career I enjoy and pays well. Luck in the sense that I picked a CS major in the 90's before "Tech" companies existed and CS was an offshoot of Math departments. I picked it because I liked computers and played computer games. I am fine and I recognize there are others that are not doing fine. My empathy means I do things within my means to help those, donate money, food, etc. Regarding the US Federal government, tax dollars going to bailout corporations or tax cuts for corporations doesn't help those who aren't doing fine. Corporations always choose self-preservation (stock buy backs, debt pay down, etc.) vs. helping their employees. I read something a while ago that said for a corporation it makes economic sense to do those things.
janbernhart 6y ago
I personally don't believe that financial inequity is a bad thing perse. So I don't have any strong feelings towards people who have more or less than I do.
HatchedLake721 6y ago
What average? Average in the area? State? Country? Continent? World? Anyone earning $100 a month is making twice the average salary of Sudan or Afghanistan. But it’s extreme poverty in other countries. It’s all relative.
- tempmakesalot 6y ago
  The average relative to wherever you live. Doesn't really matter since the question applies equally anywhere there is financial inequality. Which likely covers much of the world at this point.
st1x7 6y ago
I think that your actual question is different from the title of the post and people seem to be responding to the title. The two questions are: - how do you deal with knowing that you're on either of the far ends of tech salaries? (calling this financial inequity is a stretch) - how do you feel about financial inequity in the general sense? (this is a much bigger societal/economical/political question and the division really isn't between the lower and higher paid tech workers)
tempmakesalot 6y ago
I make way more than average - $500k/year. It used to bother me but it bothers me less nowadays. My late teens through my mid thirties were spent being relatively very generous to worthy causes and people I would meet who were down on their luck. I gave a close family member doing charity work in Africa $80,000 so they could stay there and give their kids a good education. Looking back - I don't think any of it made much difference - though I have no regrets. Now that I'm in my early 40s I've sort of lost the energy to care so much. I empathize with people struggling but sort of throw my hands up in the air. I've shifted my focus toward my family and I feel pretty good about that. It feels like I'm having A LOT more impact by investing time and money into my family than I was able to by investing in others and their families.
- iforgottherest 6y ago
  what line of work?
  - tempmakesalot 6y ago
    luck.
    - willemlabu 6y ago
      So, gambling?
      - tempmakesalot 6y ago
        product manager at big tech company. the definition of luck i like to use is "when hard work and opportunity meet". there has been a lot of both but i can't stress how much opportunity has presented itself. i don't believe i deserve 10x the income that many people earn. i do believe i can create 10x the value...but it doesn't seem right that the correlation of rewards should be so drastic. i couldn't be a ceo of a large company but i don't think they deserve 10x my income either.
- reducesuffering 6y ago
iforgottherest 6y ago
Do you know the origins of the word 'salary'? If you compare wallet size, you're likely bound to find someone with a fatter wallet. If you compare wealth over time, you may find you're richer than many just by opening your kitchen cabinets. [0] As long as humanity moves forward for each other (and we don't * up [2]), wealth increases for everyone, on average. [1] In metrics that a dollar amount can't capture. [0] https://en.wikipedia.org/wiki/History_of_salt https://en.wikipedia.org/wiki/History_of_salt [1] https://en.wikipedia.org/wiki/Wealth https://en.wikipedia.org/wiki/Wealth [2] https://en.wikipedia.org/wiki/Global_catastrophic_risk https://en.wikipedia.org/wiki/Global_catastrophic_risk Warren Buffett: "Time is the only thing you can't buy."
- thebean11 6y ago
  I don't really buy it. It's not just about having food and shelter, wealth inequality affects culture, social issues, the collective psyche, etc. Also you're going back really far there with a salary..what's the logical conclusion? The minimum standard of living should be based on society hundreds of years ago?
- btrask 6y ago
  So over the last thousand years salt has been a hyper-inflationary asset, and you're trying to tell me I'm rich for owning some?
  - iforgottherest 6y ago
    Relatively. Should have said wealthy.
orange_tee 6y ago
Financial inequality is a good thing. Consider the alternative: humans are equalized in terms of income/wealth. What happens? They start competing along other axes and their status will start being measured by other means. Would that actually be better? Think about it. Financial inequality is actually a beautiful "equalizer", because no matter who you are, no matter what genetics you are born with and what family you are born into, you are theoretically able to attain the same status (i.e. worth in the eyes of others) as any other human. Of course in practice this is mostly false but it is still better than the alternative. Status/power attained through money is much more fair than status/power attained through good looks or family name. Both of the others are much more unequal and unfair.
cosmodisk 6y ago
I probably fall within top 10% earners bracket in the UK. I've got mixed feelings about it.On one side, it feels like I'm not making that much money and that everyone else is doing so much better. However, more recently I often catch myself thinking 'hold on a second, just a few years ago most of the things I can now do were absolutely impossible because of my low income'. I think there's way too much focus on the 0.001%,while ignoring the other end of the spectrum. At least in western countries, because they are rich enough,there shouldn't be a need for things like food banks, hungry kids and millions of homeless people. What makes it worse is that financial inequality makes it very easy to 'hide' yourself from the less fortunate by living in areas where you simply don't see many of the issues.
draw_down 6y ago
I’ve been close to poor and now I’m rich. (Don’t tell me about the fucking Sudan I mean in USA terms.) I’m not sure how I feel about it other than that I would help anyone in my life who needed it. There is someone close to me who I have helped a lot and will continue to. This is why I made the money, because I think our societies are brutal and terrible and will trample all over whatever and whoever they can. And nobody is ever going to fix that. That includes me, I can’t either. I can help those around me though.
deleted 6y ago
[deleted]
gremlinsinc 6y ago
I hate it. I'm 41. A web dev (laravel / php), but totally burned out, to the point I can't focus on freelancing hardly at all. Depression has been raging in me all year, and I feel bleak about it ending soon. The only time I come out of my haze is when I work on side projects or think about ways to change the world by creating some sort of dual-power healthcare union co-op that basically is medicare for all without gov't control. However, having been 3 months since my last client, I'm struggling to put food on the table, let alone work on social good projects. if I had 400k, I'd invest that so I could live off dividends, then work with other left-leaning programmers to figure out ways to build non-statist programs for UBI and Healthcare. I had to crowdfund this month's rent and Christmas presents for my two children (under 4). So, financial strain is kind of sucking the life out of me too... i definitely have empathy, in that i've had good months, years, and bad ones. So, I've been at both ends of spectrum, though never earned > 100k before, i've lived comfortable enough for me. I also want to devote the remainder of my life to helping others, and finally start my non-profit/union/co-op endeavor to build a true sharing economy. Where workers and consumers own the companies they work at and buy goods from, and execs do not get compensated above a decent multiplier of the average worker salary. (Voted on by said workers).
- Vaslo 6y ago
  Living on the dividends from a 400k investment? That’s below poverty!
  - elindbe3 6y ago
    The poverty line is a general guideline. It doesn't take into account particular circumstances.
  - Lionga 6y ago
    It's acutally above avarage wage in most parts of the world
  - yulaow 6y ago
    In my current robomanaged investment fund I get roughly 9% yoy. If I had 400k invested I would get annually 30% more than the average salary in my euw first world country and basically never have to work for the rest of my life.
ricc 6y ago
Is inequity the same as inequality? If not, what’s the difference?
- Tycho 6y ago
  I think it’s an innovation by the diversity guild complex - the end game is to simply receive “equity” in the wealth that other peoples’ enterprises have created. Not a minimum living standard, not an opportunity, not a hand out, not a safety net, not a wage, but an equity stake that will obviate the need to strive for anything. (Probably not a literal equity stake, but rules that force all enterprises to continually just give wealth and power to certain parties.)
silicon2401 6y ago
Growing up poor and now making more than average, nothing has changed for me. I've always acknowledged that it's unfortunate, but also always consider it just part of humanity. I never wasted time moping about obstacles or people having it better than me, instead I just make the most of opportunities I have, try to get more opportunities for myself, and try to help my loved ones. Beyond that isn't my problem
mam2 6y ago
"All life is about 'power forces'." If you accept that 100%, you understand a looot more things that if you believe in equality. People who earn less earn less because they have less power or did not know how to use it, for example during negociations. I think 50% workers around do not negociate.. (Even equality comes from power struggles: it's a concept invented by poor / not powerful people to unite behind a concept and creat a "group power".) It's the cold harsh reality to me. I come from a left wing family where class awareness was present so it's a concept I think would be nice at a society level to have more equlity. But where I don't have any sympathy to people who earn less, is that in the engineering world, when you try to explain this, most people get angry or tell me that I'm an asshole. Also they don't want to make unions and refuse to engage in any power struggle. I am not an asshole, I'm trying to be realistic. However in that caae they are the literal cliché of the "nice guys". Well let's say I tried. Now I don't care being called an asshole, it's even a compliment to me. You want more ? Fight for it, don't be just "offended" or "sad".
- credit_guy 6y ago
  > I think 50% workers around do not negotiate. That's probably correct. And lest anyone reading this makes the rash decision to "negotiate" for a higher salary next time they have a meeting with their boss: negotiation without alternatives is just begging. If you tell your boss give me more money because I'm such a great guy and I work so hard, he'll just say he'd love to, but it's not up to him, etc. If you tell him that you have another job offer, and you are seriously inclined to leave, then you're actually talking serious negotiation. Morale of the story: best way to prepare for negotiation is to prepare for interviews.
tank6b 6y ago
Recently I came across a new Ethereum Token (RFI) that automatically redistribute 1% of all transactions to all holders. This is a Novell idea of redistributing part of the wealth. Since it is built into the tokenomics it works by default without any other intervention.
Tycho 6y ago
I suppose I'd like to know more about the struggles people have, without the sensationalism and manipulation one usually gets from the the media. For instance, the matter of foodbanks (in the UK). On one hand, they are a great example of private charity, they stop food waste, and give people an option that might let them save money for something else. But on the other hand, usually the media reports it like 'Thousands turning to foodbanks in desperation! Foodbank use up 15,000%! These are dark times!'
giantg2 6y ago
The US median household makes about $65k per year, so many of us on this site will fall above that line. This varies from state to state based on cost of living too. I don't have any contempt or empathy for people based on how much or how little they make. I would need to know their specifics to judge someone, and even then I try to stay away from that. Policy-wise, I would like to capital gains reform and strict responsibility for congress when making financial decisions (eg no more "borrowing" from SS/Medicare, pass a budget as required in the Constitution, etc).
- biggermike 6y ago
  > Policy-wise, I would like to capital gains reform and strict responsibility for congress when making financial decisions (eg no more "borrowing" from SS/Medicare, pass a budget as required in the Constitution, etc). I see this sentiment repeated often, but what does it mean exactly? The government has borrowed from SS, for example, since its inception in the 1930s. The entirety of SS assets are held in government debt and all efforts to diversify these assets have become politicized as "privatizing SS".
  - giantg2 6y ago
    One could say that there should be an ammendment guaranteeing that congress can no longer borrow from funds earmarked for specific programs, or at least citizen entitlement programs.
    - biggermike 6y ago
      What makes you think such an amendment would have enough support to pass? Prior attempts at Social Security reform which diverted as little as 15% of assets away from treasuries were incredibly unpopular.
      - giantg2 6y ago
        Support in Congress - probably not. There's not enough support in Congress for any kind of ammendment. Everyone's afraid of what it could turn out as or what it could lead to.
jhap 6y ago
I make a little bit less than the median income (grad student). If it was up to me, I feel totally satisfied with my income. I can afford anything I want to buy, I can go out for dinner without worrying, I have savings, etc. Similarly I do not feel envious of others who have more than me, I am not looking for a change in lifestyle, and like some others in this thread I think some degree of inequality is optimal. However when my longtime girlfriend (working in finance) feels insecure dating a man with a lower income, and is not happy with me because I can't afford / am not interested in luxury vacations and sport cars then my income becomes an issue. When I chose my job I knew I'd be taking a big loss in earnings and I knew I would be okay with that, but when it affects the people important in my life and they think less of me because of my low salary it feels bad.
- jklein11 6y ago
  Have they told you that they feel insecure dating a man with a lower income or are you projecting that?
  - hluska 6y ago
    This is an absolutely wonderful question. 43 year old me wishes that I had gotten this exact piece of advice when I was 23...
    - xavierlint 6y ago
      Can you elaborate on why? What would you have done differently?
      - hluska 6y ago
        Looking back with the benefit of perspective, it’s amazing (and sad) how much power I gave those types of projections. I don’t recall thinking through those projections with such clarity. And maybe if I had, I would have given up that self destructive trait far earlier than I did. On the other hand, I might be giving young me too much credit. I was stubborn as hell and had a lot of other shit to get rid of too! Aging is a hell of a process and I highly recommend it!! :)
yeneek 6y ago
I make triple of the average income my country as a software engineer. It makes me feel calmer, because I save most of my income. It's sad that most people have trouble to earn enough. I don't feel bad for earning money, because it took me a lot of time and effort to get to the point I earn this much. As a citizen of post communistic country, I prefer inequality more than equality.
Jugurtha 6y ago
Making more has allowed me to help people who make less, especially during these times. I wouldn't be able to help if I didn't, or in a lesser capacity for fewer people. It is good to be able to do something about something. Consider being good at something, say electronics or software or "computers" or handicraft. When a situation arises and you can wield that skill to solve a problem, everybody is better off. That is, if you don't consider that knowledge, skill, or "richess" are a pie where one has more, the other has less.
linseed_213 6y ago
Are you willing to vote against your own interests in the short-term (ex. your wait times for your non-emergency doctor visits due to Medicare for All may increase, but in exchange everyone has healthcare) to help those that are less fortunate than you in the long-term? I don't blame anyone for playing the hand they're dealt, minimizing their taxes, not donating money to charity. Those are the laws and norms we've agreed on - maximize your quality of life from there. Related note I've been thinking about it a lot recently: Will & Ariel Durant wrote an 11 volume history of the rise and fall of Western Civilizations (after touching on China and the Middle East) called The Story of Civilization https://en.wikipedia.org/wiki/The_Story_of_Civilization https://en.wikipedia.org/wiki/The_Story_of_Civilization It was written in the 1930s-70s so it has some fascist, racist and pro-eugenics overtones. Different time, pretty expected - you'd have to be pretty high on Western Civilization to spend your entire life, all the way to your deathbed, writing about it. Conveniently, he wrote a summary of what his takeaways were after all of his research The Lessons of History https://www.amazon.com/gp/product/B008GUIEYU/ref=dbs_a_def_rwt_hsch_vapi_tkin_p1_i0 https://www.amazon.com/gp/product/B008GUIEYU/ref=dbs_a_def_r... After studying the rise and fall of hundreds of states and civilizations, he credited excessive wealth inequality as one of the most consistent causes of a failed state - Romans, Greeks, Chinese, etc. Once you hit a certain level of inequality - norms fail, and it gets redistributed anyways. Since capitalism inherently concentrates wealth upward (returns on capital are higher than returns on labor), controlled income redistribution (e.g. The New Deal) is necessary to maintain stability. Blog post with a few examples from the book https://fs.blog/2016/03/history-concentration-of-wealth/ https://fs.blog/2016/03/history-concentration-of-wealth/ It feels like a lesson that humans have repeated thousands of times, and we've managed to forget again.
UK-Al05 6y ago
I don't mind inequality, as long as even the poorest can live nice lives. What matters is everyone can live good lives. I would like to get rid innate status comparisons humans do. It is the cause of uneeded suffering. But it's partly because being on the bottom is so scary in western societies. It's that that needs to change.

31 points by parentheses 6y ago

logicslave 6y ago

As an above average income earner, there is zero reason to feel any guilt, and any attempt to gin up guilt in people who make between 250-750k a year is completely misguided. The extreme wealth inequality does not come from the professional class, it is a result of the federal government and their monetary policy. When they print money, financial assets go through the roof making everyone who does not hold assets poor. This is not the fault of middle upper class Americans, and the idea that it is needs to stop.

efrank02 6y ago
How does printing money benefit the wealthy? It should devalue the money that they already have, benefitting the poor
- st1x7 6y ago
  That's not always the case. In the last couple of big printing cycles, the newly created money ended up in financial assets (like stocks) that are predominantly owned by people on the top end of the wealth distribution.
- logicslave 6y ago
  The wealthy almost never have their money in cash. They have it in assets. Real estate, stocks, bonds, derivatives, etc. It's poor people who have their money in cash
  - NetOpWibby 6y ago
    This just blew my mind.
    - tempmakesalot 6y ago
      It's much worse. Poor people have their money financed in depreciating assets.
      - jklein11 6y ago
        Wouldn't inflation help these people? The depreciating assets may lose value less slowly. Sure, high inflation usually means higher interest rates, but that certainly hasn't been the case in the current environment. Also, you will be paying off the debt with the inflated salary.
        AnimalMuppet 6y ago
        In theory yes, in practice no. The problem is that, for these people, inflation comes first to their costs, and only second to their wages. Sure they get to pay back their car loan with cheaper money. But they also have to buy groceries, and the groceries went up. Meanwhile, the number of dollars they owe on their car didn't go down. Sometime later their wages will go up, but until then, they're hurting.
- zanny 6y ago
  When the federal reserve prints money you, as a commoner, don't see a dime of it. The federal reserve only transacts new capital (because its not just raw bank notes, its financial securities in general) into a select cartel of national banks. Those banks, being private enterprise, are owned largely by the same class that owns everything else. If you own shares of the S&P 500 you own pieces of about ~two dozen banks. These are largely the banks that get treasury money which they then loan out at rates often fixed by the federal reserve in exchange for basically free money. And the trick with that money is that the bank isn't lending philanthropically, its lending to make a profit. So using the current environment as an example you aren't getting favorable bailout loan conditions from Bank of America just because the treasury gave them a hundred billion dollars to doll out, major corporations that want to use that nigh-free money to buy back stock or buy out competition get it. There are several branches on this tree of money flows but the economics of the last 50 years and particularly this depression from the botched COVID response only point towards the disconnect between the economy of the working poor and the economy of the owner class that gets to see the stock market hit all time record highs while the fed finally agrees to $600 stimulus checks when 50 million people are 6 months behind on rent. And if you want to see this mechanism in action in simplest terms, the fed bought 3 trillion in securities and the stock market recovered at about 30% rates to hit all time highs again after crashing in March. That kind of recovery is unprecedented and unheard of, but because of direct constant cash flow out of the fed all the investment panic dried up because free capital was flooding investors coffers to keep buying back in with. The dozen richest men all collectively became upwards of 50% richer this year as a direct consequence. Inflation won't come close to those gains.
  - reducesuffering 6y ago
    Source on 50 million 6 months behind on rent? A quick search didn't find 50, but only 18 million behind on rent by an untold amount of months[0]. [0]https://www.businessinsider.com/millions-of-americans-face-eviction-foreclosure-in-early-2021-2020-12 https://www.businessinsider.com/millions-of-americans-face-e...
    - cosmodisk 6y ago
- Foober223 6y ago
  Most richer people diversify their wealth. You may be hard pressed to find a billionaire who actually has $1 billion in cash. Cash would most likely be the minority of their wealth. As inflation occurs, they do take a hit on their cash holdings. But their land, stocks, apartment complexes, etc may increase in value. > It should devalue the money that they already have, benefitting the poor Even if all people both rich and poor held all their wealth in the form of cash, that would certainly hurt the poor too. Say a poor person works 8 hours a day. His 8 hours of work grant him buying power of 3 meals. After inflation his 8 hours of work grant him buying power for only 2 meals. This is not just a theoretical, look at McDonalds meal prices, you can't get a sandwich for a $1 anymore. There are some benefits to inflation. It's cheaper to employ poor people willing to work the now cheaper paper. So it may create some new jobs that otherwise may never have been created.
- deleted 6y ago
  [deleted]
- hansvm 6y ago
  Lots of other factors too, but look closely at your word choices -- "wealth" vs "money." Wealth is mostly tied up in non-money assets (not that it necessarily has to be, but that's the state of things), whereas poor people have some small amount of cash, wages which don't track with inflation, and rent and expenses which do. As money is devalued, non-money assets continue to hold their value (increasing when denominated in dollars), and every financial instrument used by anyone at or below the low/middle middle class is royally shafted in comparison.
- jklein11 6y ago
  I don't think the wealthy benefit from printing money. I just think they get hurt less than the poor. This article is a pretty interesting analysis of the effects of inflation.[1] 1.https://www.econstor.eu/bitstream/10419/70422/1/332991377.pdf https://www.econstor.eu/bitstream/10419/70422/1/332991377.pd...
zanny 6y ago
The idea won't stop so long as its a useful scapegoat to distract from the exact mechanism you described that creates the real inequality. Though its worth adding that in a stateless system capital would concentrate and accumulate because ownership is an inherent advantage in every transaction. So its not like having a government makes inequality, inequality is inherent to capitalism and its up to your society how much it wants to mitigate that effect, if at all, or to just make it worse the way the US regularly does via its monetary policy.
jklein11 6y ago
The idea that government intervention is what causes inequality really resonates with me, however, I'm not sure I buy it. In the last 15-20 years inflation has been historically low.
- leereeves 6y ago
  I'd argue that the reported inflation rate (usually measured by the CPI) doesn't reflect the real cost of living. In the last ten years, rents in my city have doubled. In just the last five years, my average grocery bill has doubled. In just the last year, the average price of a used car has risen over 8%.[1] Meanwhile, the CPI has held remarkably steady at about 2% for 40 years. According to the CPI, the cost of living has only increased by 20% over the last ten years, which is just not believable. 1: https://www.cargurus.com/Cars/price-trends/ https://www.cargurus.com/Cars/price-trends/
  - Tycho 6y ago
    I suspect the recent spike in car prices is due to the pandemic. Over ten years the cost seems pretty much flat (even as cars have become more advanced). Also, cities that are booming will outpace the rest of the country for rent (and therefore grocery) costs. I think you need to look across many cities to get a reliable picture.
- logicslave 6y ago
  Its financial asset inflation, not consumer product inflation.
  - jklein11 6y ago
    So is wealth inequality a financial asset issue and not a consumer product issue? Can you elaborate on the distinction?
    - AnimalMuppet 6y ago
      The government (and/or Fed) creates money. Stocks go up; bread doesn't. If I have to buy bread, I'm not instantly worse off. But if I own stocks, I'm instantly better off. Why do stocks go up? Because the money gets pumped into financial institutions, and from there into financial instruments. Why doesn't bread go up? Because the number of people who own large amounts of financial instruments, and who don't already buy as much bread as they want, is zero. But this situation - they're suddenly magically richer, and I'm not - magnifies existing wealth inequality.
matt_s 6y ago
Empathy is not guilt. I don't feel guilty because I've lucked into a career I enjoy and pays well. Luck in the sense that I picked a CS major in the 90's before "Tech" companies existed and CS was an offshoot of Math departments. I picked it because I liked computers and played computer games. I am fine and I recognize there are others that are not doing fine. My empathy means I do things within my means to help those, donate money, food, etc. Regarding the US Federal government, tax dollars going to bailout corporations or tax cuts for corporations doesn't help those who aren't doing fine. Corporations always choose self-preservation (stock buy backs, debt pay down, etc.) vs. helping their employees. I read something a while ago that said for a corporation it makes economic sense to do those things.

janbernhart 6y ago

I personally don't believe that financial inequity is a bad thing perse. So I don't have any strong feelings towards people who have more or less than I do.

HatchedLake721 6y ago

What average? Average in the area? State? Country? Continent? World? Anyone earning $100 a month is making twice the average salary of Sudan or Afghanistan. But it’s extreme poverty in other countries. It’s all relative.

tempmakesalot 6y ago
The average relative to wherever you live. Doesn't really matter since the question applies equally anywhere there is financial inequality. Which likely covers much of the world at this point.

st1x7 6y ago

I think that your actual question is different from the title of the post and people seem to be responding to the title. The two questions are: - how do you deal with knowing that you're on either of the far ends of tech salaries? (calling this financial inequity is a stretch) - how do you feel about financial inequity in the general sense? (this is a much bigger societal/economical/political question and the division really isn't between the lower and higher paid tech workers)

tempmakesalot 6y ago

I make way more than average - $500k/year. It used to bother me but it bothers me less nowadays. My late teens through my mid thirties were spent being relatively very generous to worthy causes and people I would meet who were down on their luck. I gave a close family member doing charity work in Africa $80,000 so they could stay there and give their kids a good education. Looking back - I don't think any of it made much difference - though I have no regrets. Now that I'm in my early 40s I've sort of lost the energy to care so much. I empathize with people struggling but sort of throw my hands up in the air. I've shifted my focus toward my family and I feel pretty good about that. It feels like I'm having A LOT more impact by investing time and money into my family than I was able to by investing in others and their families.

iforgottherest 6y ago
what line of work?
- tempmakesalot 6y ago
  luck.
  - willemlabu 6y ago
    So, gambling?
    - tempmakesalot 6y ago
      product manager at big tech company. the definition of luck i like to use is "when hard work and opportunity meet". there has been a lot of both but i can't stress how much opportunity has presented itself. i don't believe i deserve 10x the income that many people earn. i do believe i can create 10x the value...but it doesn't seem right that the correlation of rewards should be so drastic. i couldn't be a ceo of a large company but i don't think they deserve 10x my income either.
reducesuffering 6y ago

iforgottherest 6y ago

Do you know the origins of the word 'salary'? If you compare wallet size, you're likely bound to find someone with a fatter wallet. If you compare wealth over time, you may find you're richer than many just by opening your kitchen cabinets. [0] As long as humanity moves forward for each other (and we don't * up [2]), wealth increases for everyone, on average. [1] In metrics that a dollar amount can't capture. [0] https://en.wikipedia.org/wiki/History_of_salt https://en.wikipedia.org/wiki/History_of_salt [1] https://en.wikipedia.org/wiki/Wealth https://en.wikipedia.org/wiki/Wealth [2] https://en.wikipedia.org/wiki/Global_catastrophic_risk https://en.wikipedia.org/wiki/Global_catastrophic_risk Warren Buffett: "Time is the only thing you can't buy."

thebean11 6y ago
I don't really buy it. It's not just about having food and shelter, wealth inequality affects culture, social issues, the collective psyche, etc. Also you're going back really far there with a salary..what's the logical conclusion? The minimum standard of living should be based on society hundreds of years ago?
btrask 6y ago
So over the last thousand years salt has been a hyper-inflationary asset, and you're trying to tell me I'm rich for owning some?
- iforgottherest 6y ago
  Relatively. Should have said wealthy.

orange_tee 6y ago

Financial inequality is a good thing. Consider the alternative: humans are equalized in terms of income/wealth. What happens? They start competing along other axes and their status will start being measured by other means. Would that actually be better? Think about it. Financial inequality is actually a beautiful "equalizer", because no matter who you are, no matter what genetics you are born with and what family you are born into, you are theoretically able to attain the same status (i.e. worth in the eyes of others) as any other human. Of course in practice this is mostly false but it is still better than the alternative. Status/power attained through money is much more fair than status/power attained through good looks or family name. Both of the others are much more unequal and unfair.

cosmodisk 6y ago

I probably fall within top 10% earners bracket in the UK. I've got mixed feelings about it.On one side, it feels like I'm not making that much money and that everyone else is doing so much better. However, more recently I often catch myself thinking 'hold on a second, just a few years ago most of the things I can now do were absolutely impossible because of my low income'. I think there's way too much focus on the 0.001%,while ignoring the other end of the spectrum. At least in western countries, because they are rich enough,there shouldn't be a need for things like food banks, hungry kids and millions of homeless people. What makes it worse is that financial inequality makes it very easy to 'hide' yourself from the less fortunate by living in areas where you simply don't see many of the issues.

draw_down 6y ago

I’ve been close to poor and now I’m rich. (Don’t tell me about the fucking Sudan I mean in USA terms.) I’m not sure how I feel about it other than that I would help anyone in my life who needed it. There is someone close to me who I have helped a lot and will continue to. This is why I made the money, because I think our societies are brutal and terrible and will trample all over whatever and whoever they can. And nobody is ever going to fix that. That includes me, I can’t either. I can help those around me though.

deleted 6y ago

[deleted]

gremlinsinc 6y ago

I hate it. I'm 41. A web dev (laravel / php), but totally burned out, to the point I can't focus on freelancing hardly at all. Depression has been raging in me all year, and I feel bleak about it ending soon. The only time I come out of my haze is when I work on side projects or think about ways to change the world by creating some sort of dual-power healthcare union co-op that basically is medicare for all without gov't control. However, having been 3 months since my last client, I'm struggling to put food on the table, let alone work on social good projects. if I had 400k, I'd invest that so I could live off dividends, then work with other left-leaning programmers to figure out ways to build non-statist programs for UBI and Healthcare. I had to crowdfund this month's rent and Christmas presents for my two children (under 4). So, financial strain is kind of sucking the life out of me too... i definitely have empathy, in that i've had good months, years, and bad ones. So, I've been at both ends of spectrum, though never earned > 100k before, i've lived comfortable enough for me. I also want to devote the remainder of my life to helping others, and finally start my non-profit/union/co-op endeavor to build a true sharing economy. Where workers and consumers own the companies they work at and buy goods from, and execs do not get compensated above a decent multiplier of the average worker salary. (Voted on by said workers).

Vaslo 6y ago
Living on the dividends from a 400k investment? That’s below poverty!
- elindbe3 6y ago
  The poverty line is a general guideline. It doesn't take into account particular circumstances.
- Lionga 6y ago
  It's acutally above avarage wage in most parts of the world
- yulaow 6y ago
  In my current robomanaged investment fund I get roughly 9% yoy. If I had 400k invested I would get annually 30% more than the average salary in my euw first world country and basically never have to work for the rest of my life.

ricc 6y ago

Is inequity the same as inequality? If not, what’s the difference?

Tycho 6y ago
I think it’s an innovation by the diversity guild complex - the end game is to simply receive “equity” in the wealth that other peoples’ enterprises have created. Not a minimum living standard, not an opportunity, not a hand out, not a safety net, not a wage, but an equity stake that will obviate the need to strive for anything. (Probably not a literal equity stake, but rules that force all enterprises to continually just give wealth and power to certain parties.)

silicon2401 6y ago

Growing up poor and now making more than average, nothing has changed for me. I've always acknowledged that it's unfortunate, but also always consider it just part of humanity. I never wasted time moping about obstacles or people having it better than me, instead I just make the most of opportunities I have, try to get more opportunities for myself, and try to help my loved ones. Beyond that isn't my problem

mam2 6y ago

"All life is about 'power forces'." If you accept that 100%, you understand a looot more things that if you believe in equality. People who earn less earn less because they have less power or did not know how to use it, for example during negociations. I think 50% workers around do not negociate.. (Even equality comes from power struggles: it's a concept invented by poor / not powerful people to unite behind a concept and creat a "group power".) It's the cold harsh reality to me. I come from a left wing family where class awareness was present so it's a concept I think would be nice at a society level to have more equlity. But where I don't have any sympathy to people who earn less, is that in the engineering world, when you try to explain this, most people get angry or tell me that I'm an asshole. Also they don't want to make unions and refuse to engage in any power struggle. I am not an asshole, I'm trying to be realistic. However in that caae they are the literal cliché of the "nice guys". Well let's say I tried. Now I don't care being called an asshole, it's even a compliment to me. You want more ? Fight for it, don't be just "offended" or "sad".

credit_guy 6y ago
> I think 50% workers around do not negotiate. That's probably correct. And lest anyone reading this makes the rash decision to "negotiate" for a higher salary next time they have a meeting with their boss: negotiation without alternatives is just begging. If you tell your boss give me more money because I'm such a great guy and I work so hard, he'll just say he'd love to, but it's not up to him, etc. If you tell him that you have another job offer, and you are seriously inclined to leave, then you're actually talking serious negotiation. Morale of the story: best way to prepare for negotiation is to prepare for interviews.

tank6b 6y ago

Recently I came across a new Ethereum Token (RFI) that automatically redistribute 1% of all transactions to all holders. This is a Novell idea of redistributing part of the wealth. Since it is built into the tokenomics it works by default without any other intervention.

Tycho 6y ago

I suppose I'd like to know more about the struggles people have, without the sensationalism and manipulation one usually gets from the the media. For instance, the matter of foodbanks (in the UK). On one hand, they are a great example of private charity, they stop food waste, and give people an option that might let them save money for something else. But on the other hand, usually the media reports it like 'Thousands turning to foodbanks in desperation! Foodbank use up 15,000%! These are dark times!'

giantg2 6y ago

The US median household makes about $65k per year, so many of us on this site will fall above that line. This varies from state to state based on cost of living too. I don't have any contempt or empathy for people based on how much or how little they make. I would need to know their specifics to judge someone, and even then I try to stay away from that. Policy-wise, I would like to capital gains reform and strict responsibility for congress when making financial decisions (eg no more "borrowing" from SS/Medicare, pass a budget as required in the Constitution, etc).

biggermike 6y ago
> Policy-wise, I would like to capital gains reform and strict responsibility for congress when making financial decisions (eg no more "borrowing" from SS/Medicare, pass a budget as required in the Constitution, etc). I see this sentiment repeated often, but what does it mean exactly? The government has borrowed from SS, for example, since its inception in the 1930s. The entirety of SS assets are held in government debt and all efforts to diversify these assets have become politicized as "privatizing SS".
- giantg2 6y ago
  One could say that there should be an ammendment guaranteeing that congress can no longer borrow from funds earmarked for specific programs, or at least citizen entitlement programs.
  - biggermike 6y ago
    What makes you think such an amendment would have enough support to pass? Prior attempts at Social Security reform which diverted as little as 15% of assets away from treasuries were incredibly unpopular.
    - giantg2 6y ago
      Support in Congress - probably not. There's not enough support in Congress for any kind of ammendment. Everyone's afraid of what it could turn out as or what it could lead to.

jhap 6y ago

I make a little bit less than the median income (grad student). If it was up to me, I feel totally satisfied with my income. I can afford anything I want to buy, I can go out for dinner without worrying, I have savings, etc. Similarly I do not feel envious of others who have more than me, I am not looking for a change in lifestyle, and like some others in this thread I think some degree of inequality is optimal. However when my longtime girlfriend (working in finance) feels insecure dating a man with a lower income, and is not happy with me because I can't afford / am not interested in luxury vacations and sport cars then my income becomes an issue. When I chose my job I knew I'd be taking a big loss in earnings and I knew I would be okay with that, but when it affects the people important in my life and they think less of me because of my low salary it feels bad.

jklein11 6y ago
Have they told you that they feel insecure dating a man with a lower income or are you projecting that?
- hluska 6y ago
  This is an absolutely wonderful question. 43 year old me wishes that I had gotten this exact piece of advice when I was 23...
  - xavierlint 6y ago
    Can you elaborate on why? What would you have done differently?
    - hluska 6y ago
      Looking back with the benefit of perspective, it’s amazing (and sad) how much power I gave those types of projections. I don’t recall thinking through those projections with such clarity. And maybe if I had, I would have given up that self destructive trait far earlier than I did. On the other hand, I might be giving young me too much credit. I was stubborn as hell and had a lot of other shit to get rid of too! Aging is a hell of a process and I highly recommend it!! :)

yeneek 6y ago

I make triple of the average income my country as a software engineer. It makes me feel calmer, because I save most of my income. It's sad that most people have trouble to earn enough. I don't feel bad for earning money, because it took me a lot of time and effort to get to the point I earn this much. As a citizen of post communistic country, I prefer inequality more than equality.

Jugurtha 6y ago

Making more has allowed me to help people who make less, especially during these times. I wouldn't be able to help if I didn't, or in a lesser capacity for fewer people. It is good to be able to do something about something. Consider being good at something, say electronics or software or "computers" or handicraft. When a situation arises and you can wield that skill to solve a problem, everybody is better off. That is, if you don't consider that knowledge, skill, or "richess" are a pie where one has more, the other has less.

linseed_213 6y ago

Are you willing to vote against your own interests in the short-term (ex. your wait times for your non-emergency doctor visits due to Medicare for All may increase, but in exchange everyone has healthcare) to help those that are less fortunate than you in the long-term? I don't blame anyone for playing the hand they're dealt, minimizing their taxes, not donating money to charity. Those are the laws and norms we've agreed on - maximize your quality of life from there. Related note I've been thinking about it a lot recently: Will & Ariel Durant wrote an 11 volume history of the rise and fall of Western Civilizations (after touching on China and the Middle East) called The Story of Civilization https://en.wikipedia.org/wiki/The_Story_of_Civilization https://en.wikipedia.org/wiki/The_Story_of_Civilization It was written in the 1930s-70s so it has some fascist, racist and pro-eugenics overtones. Different time, pretty expected - you'd have to be pretty high on Western Civilization to spend your entire life, all the way to your deathbed, writing about it. Conveniently, he wrote a summary of what his takeaways were after all of his research The Lessons of History https://www.amazon.com/gp/product/B008GUIEYU/ref=dbs_a_def_rwt_hsch_vapi_tkin_p1_i0 https://www.amazon.com/gp/product/B008GUIEYU/ref=dbs_a_def_r... After studying the rise and fall of hundreds of states and civilizations, he credited excessive wealth inequality as one of the most consistent causes of a failed state - Romans, Greeks, Chinese, etc. Once you hit a certain level of inequality - norms fail, and it gets redistributed anyways. Since capitalism inherently concentrates wealth upward (returns on capital are higher than returns on labor), controlled income redistribution (e.g. The New Deal) is necessary to maintain stability. Blog post with a few examples from the book https://fs.blog/2016/03/history-concentration-of-wealth/ https://fs.blog/2016/03/history-concentration-of-wealth/ It feels like a lesson that humans have repeated thousands of times, and we've managed to forget again.

UK-Al05 6y ago

I don't mind inequality, as long as even the poorest can live nice lives. What matters is everyone can live good lives. I would like to get rid innate status comparisons humans do. It is the cause of uneeded suffering. But it's partly because being on the bottom is so scary in western societies. It's that that needs to change.