3 ms·

Skewed is not a binary. Pre-raise, you made 7% of my salary. Post raise, you make 13% of my salary.

richbell 4y ago
That's true, and perhaps a bad example in the context of the article. The difference is orders of magnitude, so not $7 vs $100 but $10,000+. But even in my prior example your wages are increasing more and faster, and are likely to continue increasing regularly compared to lower-earning jobs. It's also the distribution of that money: why does one person receive more than the hundreds or thousands of people that do the actual work? Percentage wage increase is a shallow metric that does not account for all these things, not to mention cost-of-living, inflation, assets, the ultra-wealthy not earning money via income or other comparable methods, etc.
- jelliclesfarm 4y ago
  [..]It's also the distribution of that money: why does one person receive more than the hundreds or thousands of people that do the actual work?[..] Because wages are taxed. You can’t tax the low wage earners. But an increase to those in the higher tax bracket pumps money back into public money spending while also it keeps the economy humming. People don’t understand that wages paid is mostly for the running of the economy. As a wage earning employee, one is merely a cog in the wheel of the larger economy. Distribution of money in an economy occurs when businesses thrive and the economy is fueled by the wages. Distribution of wealth is an entirely different subject. This is why interest rates are always controlled by the central bank. If they don’t, countries will spiral into complete economic collapse. I would rather high tax payers get hikes in a strained economy than low wage earners. Economic welfare should only be borne by those who can afford to pay higher taxes.
  - richbell 4y ago
    I have to run out so I don't have time to write a thoughtful response. I tend to agree, but there's a glaring issue. > I would rather high tax payers get hikes in a strained economy than low wage earners. Economic welfare should only be borne by those who can afford to pay higher taxes. This is only true up until a point. The tax burden in many countries is held by the middle and upper-middle class. The ultra-wealthy do not pay an equivalent or fair share; Warren Buffet famously claims he pays a lower tax rate than his secretary. Someone going from $100,000 to $200,000 is still going to re-circulate a lot of money into taxes and local businesses. Someone who has $1,000,000,000 already has more money than they can reasonably spend in a lifetime, and can leverage their tremendous wealth to avoid paying their fair share of taxes (and in many cases any taxes whatsoever).
    - NoRagrets 4y ago
      The tax burden is held by the middle class only in countries like Scandinavian and EU countries where capitalism has a heavy dose of socialism. Which only proves that it’s not a potent enough mix and just capitalism alone will keep the engines of a society running. Like in the United States. Hands down, quality of life is better in the United States. It is a combination of low population density and commitment to capitalism. One can consider long vacations and lunch breaks as ‘better quality of life’, but I am mostly talking about access to material things and things like power and energy. Generally access to free and/odd cheap energy is the gateway to better quality of life and abundance. Everything else is a solvable problem with policy and legislation. United States may be lacking in certain social metrics but it’s solvable. But where cheap energy is lacking, the economy( and eventually society) will decay and die. Scandinavian flavour of socialism works because most have access to energy and have low population density. But even so, the burden is on the middle class. In California, otoh, [..] The richest 1% of California tax filers pay the largest share of their income in state and local taxes (12.3%), but the 20% of filers with the lowest incomes pay the next highest share (11.4%). [..] This is why capitalism has single handedly raised quality of life world over(think India, Africa rather than Western Europe)than socialism or communism. Even China benefited from capitalism. + https://calmatters.org/explainers/the-open-secret-about-california-taxes/ https://calmatters.org/explainers/the-open-secret-about-cali...
- credit_guy 4y ago
  > why does one person receive more than the hundreds or thousands of people that do the actual work? Because of several things. One is supply and demand. Those hundreds of thousands of people doing "the actual work" are quite often quite interchangeable. High supply means low pay. There's no exploitation going on. The other is the impact of the individual's actions. If you are a boss in a position to say "we keep making combustion engines" vs one that says "we go all in on electric vehicles", that decision can make or break a company. CEOs make hundreds of such decisions in a year. If you are an engineer in a position to fix ten bugs per week, and add five features, well, you can hope you'll be in a more impactful position one day. Until then, CEOs will make much more money than you. Finally, it's the asymmetry of the impact. The more impactful you can be, the more damage you can do too. I once talked (online) with a chess player who told me that at his best he can be as good as Kasparov, but Kasparov was consistent, while he was not. People at Kasparov's level make few mistakes. Very few. At some level in a company's hierarchy it's very important that you do few mistakes. More important than how many brilliant decisions you make. And there are precious few people who have the attention to detail and focus to get to be a Kasparov-like for the corporate world. Those people get paid.
tnel77 4y ago
That’s true, but people saying “look at your raise as a percentage, it’s huge” is wildly misleading when we are talking about using that money to actually live your life. People at the bottom are still suffering, even if their raise was a relatively large percentage.
akira2501 4y ago
Pre-raise, I made 14x what you made. Post-raise, I still make 7x what you make. I'll take your point that relative comparisons are useful, but perhaps representing this as a percentage rather than a multiple isn't particularly helpful when considering the gaps.

That's true, and perhaps a bad example in the context of the article. The difference is orders of magnitude, so not $7 vs $100 but $10,000+. But even in my prior example your wages are increasing more and faster, and are likely to continue increasing regularly compared to lower-earning jobs. It's also the distribution of that money: why does one person receive more than the hundreds or thousands of people that do the actual work? Percentage wage increase is a shallow metric that does not account for all these things, not to mention cost-of-living, inflation, assets, the ultra-wealthy not earning money via income or other comparable methods, etc.

jelliclesfarm 4y ago
[..]It's also the distribution of that money: why does one person receive more than the hundreds or thousands of people that do the actual work?[..] Because wages are taxed. You can’t tax the low wage earners. But an increase to those in the higher tax bracket pumps money back into public money spending while also it keeps the economy humming. People don’t understand that wages paid is mostly for the running of the economy. As a wage earning employee, one is merely a cog in the wheel of the larger economy. Distribution of money in an economy occurs when businesses thrive and the economy is fueled by the wages. Distribution of wealth is an entirely different subject. This is why interest rates are always controlled by the central bank. If they don’t, countries will spiral into complete economic collapse. I would rather high tax payers get hikes in a strained economy than low wage earners. Economic welfare should only be borne by those who can afford to pay higher taxes.
- richbell 4y ago
  I have to run out so I don't have time to write a thoughtful response. I tend to agree, but there's a glaring issue. > I would rather high tax payers get hikes in a strained economy than low wage earners. Economic welfare should only be borne by those who can afford to pay higher taxes. This is only true up until a point. The tax burden in many countries is held by the middle and upper-middle class. The ultra-wealthy do not pay an equivalent or fair share; Warren Buffet famously claims he pays a lower tax rate than his secretary. Someone going from $100,000 to $200,000 is still going to re-circulate a lot of money into taxes and local businesses. Someone who has $1,000,000,000 already has more money than they can reasonably spend in a lifetime, and can leverage their tremendous wealth to avoid paying their fair share of taxes (and in many cases any taxes whatsoever).
  - NoRagrets 4y ago
    The tax burden is held by the middle class only in countries like Scandinavian and EU countries where capitalism has a heavy dose of socialism. Which only proves that it’s not a potent enough mix and just capitalism alone will keep the engines of a society running. Like in the United States. Hands down, quality of life is better in the United States. It is a combination of low population density and commitment to capitalism. One can consider long vacations and lunch breaks as ‘better quality of life’, but I am mostly talking about access to material things and things like power and energy. Generally access to free and/odd cheap energy is the gateway to better quality of life and abundance. Everything else is a solvable problem with policy and legislation. United States may be lacking in certain social metrics but it’s solvable. But where cheap energy is lacking, the economy( and eventually society) will decay and die. Scandinavian flavour of socialism works because most have access to energy and have low population density. But even so, the burden is on the middle class. In California, otoh, [..] The richest 1% of California tax filers pay the largest share of their income in state and local taxes (12.3%), but the 20% of filers with the lowest incomes pay the next highest share (11.4%). [..] This is why capitalism has single handedly raised quality of life world over(think India, Africa rather than Western Europe)than socialism or communism. Even China benefited from capitalism. + https://calmatters.org/explainers/the-open-secret-about-california-taxes/ https://calmatters.org/explainers/the-open-secret-about-cali...
credit_guy 4y ago
> why does one person receive more than the hundreds or thousands of people that do the actual work? Because of several things. One is supply and demand. Those hundreds of thousands of people doing "the actual work" are quite often quite interchangeable. High supply means low pay. There's no exploitation going on. The other is the impact of the individual's actions. If you are a boss in a position to say "we keep making combustion engines" vs one that says "we go all in on electric vehicles", that decision can make or break a company. CEOs make hundreds of such decisions in a year. If you are an engineer in a position to fix ten bugs per week, and add five features, well, you can hope you'll be in a more impactful position one day. Until then, CEOs will make much more money than you. Finally, it's the asymmetry of the impact. The more impactful you can be, the more damage you can do too. I once talked (online) with a chess player who told me that at his best he can be as good as Kasparov, but Kasparov was consistent, while he was not. People at Kasparov's level make few mistakes. Very few. At some level in a company's hierarchy it's very important that you do few mistakes. More important than how many brilliant decisions you make. And there are precious few people who have the attention to detail and focus to get to be a Kasparov-like for the corporate world. Those people get paid.

tnel77 4y ago

That’s true, but people saying “look at your raise as a percentage, it’s huge” is wildly misleading when we are talking about using that money to actually live your life. People at the bottom are still suffering, even if their raise was a relatively large percentage.

akira2501 4y ago

Pre-raise, I made 14x what you made. Post-raise, I still make 7x what you make. I'll take your point that relative comparisons are useful, but perhaps representing this as a percentage rather than a multiple isn't particularly helpful when considering the gaps.