Wealth inequality and poverty

[IvanMontillaM]

Hello, my friends,

I came across this post today: What’s Behind the Rising Inequality of Everything?

I understood it talks about the rich getting richer, greedy lobbying, government cronyism, but... does anybody ever talk about the poor getting poorer by their own means?

Let me explain myself: the laziness, guys smoking pot, girls getting pregnant in their teenage years, avoiding school, drinking booze Monday early, ignorance. I'd argue most of the time is not the richer getting richer, it's the poor people by their own initiative getting poorer. Example: my neighbor owns his own house, and I asked him "would you like to own many other houses and live off rent?" and he said, "if I can sell this one and live off my job I'd be just fine!"

He's gonna eat his own worn-out shoes when he gets old.

 

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[ZF Lee]

Hello, my friends,

I came across this post today: What’s Behind the Rising Inequality of Everything?

I understood it talks about the rich getting richer, greedy lobbying, government cronyism, but... does anybody ever talk about the poor getting poorer by their own means?

Let me explain myself: the laziness, guys smoking pot, girls getting pregnant in their teenage years, avoiding school, drinking booze Monday early, ignorance. I'd argue most of the time is not the richer getting richer, it's the poor people by their own initiative getting poorer. Example: my neighbor owns his own house, and I asked him "would you like to own many other houses and live off rent?" and he said, "if I can sell this one and live off my job I'd be just fine!"

He's gonna eat his own worn-out shoes when he gets old.

I think that laziness, addiction to pot, early pregnancy, avoiding school...such things can also happen to more well-off folks as well. I've seen perfectly normal kids with good family backgrounds go into college, only for the environment and friends to turn them upside down.

Our best bet is to work hard to keep our circles of influences clean, meaningful and healthy.

As for the house and your neighbour, probably he has other ways of retirement planning that he isn't mentioning? I can understand that managing rentals isn't for everyone, let alone a Fastlane business.

 

[StrikingViper69]

I still don't understand why people care about inequality. It's a completely meaningless measure.

 

[IvanMontillaM]

That's right @ZF Lee, not anyone can manage Fastlane. Speculating I don't think he has a solid retirement plan, but I don't factually know that.

And yes, you're right, I almost forgot people can be High-income Sidewalkers as well. The healthy relationship part I liked pretty much, that's great advice! thanks!

 

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[jesseissorude]

I think it's very reductionist to blame poor people for being poor. Are there lazy poor people? Sure. There are lazy pot-smoking rich people too. My sister had a child out of wedlock, and she is very wealthy now because our family had the resources so she didn't have to make the choice between care for her child and continuing school. Having a surprise baby and not having it affect your life's opportunities is a luxury.

There are also a lot of systemic issues they have to deal with that rich people don't. Small example, but the cost of $400 of groceries every month is an almost crippling part of your budget if you are living on $24k/yr. And to earn that $24k, you are still working the same 8-12 hour day someone else is.

Yes, I absolutely think that everyone should know about how money works and try to find a way to be independently wealthy. But I think you are taking for granted that everyone is even aware that entrepreneurship is an option for them. For may poor families, the only dream they are even aware of is having a child go to college to get a middle-class office job (never mind finding a way to pay for that college... even if you have a need-based scholarship you'll still be hustling 2x harder than your classmates since you're likely working to make food/rent money while studying).

Being poor isn't a moral failing. Worry about yourself. Your neighbor doesn't have the same goals as you and there's nothing wrong with him not wanting to own a bunch of rental properties. If anything, that's more opportunity for you

 

[ljean]

I still don't understand why people care about inequality.

Ever hear of the French Revolution?

 

[Kak]

I still don't understand why people care about inequality. It's a completely meaningless measure.

It is basically the jealousy index.

The only thing that should matter is the average standard of living.

 

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[Deleted78083]

I still don't understand why people care about inequality. It's a completely meaningless measure.

Thank you, this is correct, although it is not meaningless, but it is only half of the picture.

Let's take an example.

Under Thatcher, inequality increased in Great-Britain.

"OMG terrible, let's abolish capitalism and establish a communist regime right away", might you think.

Well, no.

While inequality increased, the quality of life of everyone actually increased.

What this means is that while Average Arthur increased his net worth by 5% under Thatcher, Rich Richard increased his net worth by 10% or 15%. Inequality did increase, sure, but everyone's net worth did too.

Economically, it makes perfect sense, but few people understand that because few people understand the relationship between the poor and the wealthy.

The truth is that Arthur is an employee and works for Richard. Since employees earn 20% of the money they make, it's normal that Arthur's productivity enabled Richard to make more money.

The problem is that the picture is often portrayed as Richard taking Arthur's money (which is the case in countries like Russia and Ukraine, which aren't capitalist economies but oligarchic economies.)

This is, however, not the case in capitalist economies.

As such, as Thatcher herself explained, socialists would rather have everyone poor and no inequality than having a wealthy class, a middle-class, and a poor-class, which what capitalism usually creates, with the rich and middle-class paying for everyone's infrastructure.

I like how media explain that rich people become rich at the expanse of the poor.
This isn't correct. It gives the idea that whatever the rich produce would be produced by the poor if the rich weren't there.

The wealthy don't become rich at the expanse of the poor. They become rich with the help of the poor, and I would say even, at the same time, because employees get a salary for their work.

The ultimate question is: is the salary employees get fair for the value they deliver to the company?

Billionaires aren't to blame for wealth inequality. The employee status is. If everyone was a freelancer, if employees didn't exist, wealth levels in society would be much equal.

Billionaires get as rich as employees help them become. Should everyone quit working for Amazon tomorrow, Bezos won't be the richest in the world for long.

 

[Onakosa]

Ooooh, this is a big one. It may well be different in other countries but I do believe that here in the UK there is far less social mobility than there was 30 years ago. There are lots of reasons for this; the 'hour glass economy' is an obvious one i.e. that there are jobs at the top, jobs at the bottom, but the middle income type jobs that that the middle classes/upper working classes used to do have pretty much disappeared.

Internships - or 'working for free' as I like to call it - are another factor. I saw this taking over when I left corporate 15 years ago. I worked for big media company and each year saw more and more rich kids doing 'internships' populating the various floors. It goes without saying that they all came from families who could afford to support indefinite periods of unpaid labour whilst living in an expensive city (London). Having several of these things on your CV has become a prerequisite for a decent graduate type job in a big company.

Then the general spiralling-out-of-control of house prices, short term/flexi contracts becoming normal (pretty hard to make tangible plans with no guaranteed income), and most wages having stagnated for about 20 years.

I do agree that to a large extent we make our own luck, but I think it has to be acknowledged that it's not as easy as it once was.

 

[Onakosa]

The ultimate question is: is the salary employees get fair for the value they deliver to the company?

That's a good point. And no, not these days. Per my post wages in the UK haven't kept pace at all with house prices and the general cost of living. Hence we talk about the working poor.

 

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[StrikingViper69]

It is basically the jealousy index.

The only thing that should matter is the average standard of living.

Maybe if the question was reframed as "Productive Inequality", people would complain less?

 

[ljean]

The powers-that-be have a vested interest in ensuring the working class is appeased for the most part. Things would come to a halt fairly quickly if the majority of those folks stopped showing up for work.

 

[Kak]

Maybe if the question was reframed as "Productive Inequality", people would complain less?

The poor have never been richer.

 

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[Onakosa]

The poor have never been richer.

How do you figure that?

 

[Onakosa]

The powers-that-be have a vested interest in ensuring the working class is appeased for the most part. Things would come to a halt fairly quickly if the majority of those folks stopped showing up for work.

Absolutely. It’s said that one reason we got our state health and benefits care system here in the UK is that the aristocracy was terrified of a revolution. If you look at the timeline of ours being conceived it wasn’t that long after the Russians had taken the ‘French approach’ to their own rulers ;-)

 

[Kak]

How do you figure that?

We should measure wealth in standard of living relative to their production, which is the only thing that matters... Not relativity to rich people in printed currency.

The standards of living of the poor have never been higher.

Never before has someone had to work less to afford a dwelling, transportation, food, and consumables.

 

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[GPM]

How do you figure that?

Are you talking about "Western Poor"? If so are you serious?

When in the past has the "poor" ever had access to indoor plumbing and heating? A cell phone (computer) that can literally access all of the worlds knowledge online for essentially free? A vehicle (or several)? Food from all over the world at nearly their own fingertips. Cheap public transport?

Tell me exactly how the poor are getting poorer? Poorer than what? Are the UK (or American) poor worse off today than they were 100 years ago? 50 years ago? 20 years ago?

Try to critically think about that statement rather than just parroting it because it is the popular thing to say.

Are the rich getting richer? Absolutely! Without a doubt. The rich are so rich right now that I think no one could have ever foreseen this.

Are the poorer getting richer as well? Absolutely. They have access to things that no one could have even dreamed of 100 years ago.

Are the rich getting richer at a faster rate than the poor. Yup, sure they are. Are the poor getting richer or poorer? Think about that critically for a second. Just because they are not heading in the same direction at the same pace, does not mean they are not both heading in the same direction.

 

[Onakosa]

We should measure wealth in standard of living relative to their production, which is the only thing that matters... Not relativity to rich people in printed currency.

The standards of living of the poor have never been higher.

Never before has someone had to work less to afford a dwelling, transportation, food, and consumables.

That last para’s a bit of a sweeping statement. I’m not necessarily disagreeing - but I’d be interested to see some reliable data.

 

[Deleted78083]

That's a good point. And no, not these days. Per my post wages in the UK haven't kept pace at all with house prices and the general cost of living. Hence we talk about the working poor.

That's a problem because this is how a capitalist economy transforms into an oligarchic economy.

One of the main reasons for that is immigration.

From an economic standpoint, people are no different than goods. The reason why a software engineer gets a higher salary than a janitor is because it is much more difficult to find someone that writes code than someone that cleans the floor. Low supply + high demand = high price.

The salary reflects partially the demand for a profession (partially, because it also has to do with the value delivered, but they usually go hand in hand, where high-valuable professions have less qualified candidates, but anyway, let's forget this for a moment).

When you have more people looking for the same job, there is more "supply". If the supply increases, the price (salary) decreases.

And this is why salaries have stagnated so much in the south of the US. Millions of qualified Mexicans have agreed to perform jobs as well as American citizens, but for a much lower salary.

I don't want to get into politics, but if you care about the salary of your population, beware of immigration. Economically, it has been shown everywhere that as the population of a developed country increases with immigration, salaries take a hit.

This is why most CEOs are always happy to have open-doors immigration politics, as it enables them to decrease salaries (or at least, to avoid increasing them) and hire cheap labor.

Facebook has been sued a couple of days ago for favoring immigrants over US workers for jobs. It's telling.

 

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[GPM]

@mon_fi
I am not sure you can even call what we have today a Capitalist Society. The government meddles in every possible thing, and makes it increasingly difficult for any real competition to grow in the market place.

So by trashing Capitalism based on what we have today, isn't really genuine. Just because they call it that doesn't mean that is actually what it is.

 

[Onakosa]

That's a problem because this is how a capitalist economy transforms into an oligarchic economy.

One of the main reasons for that is immigration.

From an economic standpoint, people are no different than goods. The reason why a software engineer gets a higher salary than a janitor is because it is much more difficult to find someone that writes code than someone that cleans the floor. Low supply + high demand = high price.

The salary reflects partially the demand for a profession (partially, because it also has to do with the value delivered, but they usually go hand in hand, where high-valuable professions have less qualified candidates, but anyway, let's forget this for a moment).

When you have more people looking for the same job, there is more "supply". If the supply increases, the price (salary) decreases.

And this is why salaries have stagnated so much in the south of the US. Millions of qualified Mexicans have agreed to perform jobs as well as American citizens, but for a much lower salary.

I don't want to get into politics, but if you care about the salary of your population, beware of immigration. Economically, it has been shown everywhere that as the population of a developed country increases with immigration, salaries take a hit.

This is why most CEOs are always happy to have open-doors immigration politics, as it enables them to decrease salaries (or at least, to avoid increasing them) and hire cheap labor.

Facebook has been sued a couple of days ago for favoring immigrants over US workers for jobs. It's telling.

I live in England. We’re Brexit-ing partly due to this one. And yes, of course a steady stream of cheap labour is going to keep housing costs high and wages low.

 

[Deleted78083]

I

Are you talking about "Western Poor"? If so are you serious?

When in the past has the "poor" ever had access to indoor plumbing and heating? A cell phone (computer) that can literally access all of the worlds knowledge online for essentially free? A vehicle (or several)? Food from all over the world at nearly their own fingertips. Cheap public transport?

Tell me exactly how the poor are getting poorer? Poorer than what? Are the UK (or American) poor worse off today than they were 100 years ago? 50 years ago? 20 years ago?

Try to critically think about that statement rather than just parroting it because it is the popular thing to say.

Are the rich getting richer? Absolutely! Without a doubt. The rich are so rich right now that I think no one could have ever foreseen this.

Are the poorer getting richer as well? Absolutely. They have access to things that no one could have even dreamed of 100 years ago.

Are the rich getting richer at a faster rate than the poor. Yup, sure they are. Are the poor getting richer or poorer? Think about that critically for a second. Just because they are not heading in the same direction at the same pace, does not mean they are not both heading in the same direction.

I think what we mean by that is that purchasing power decreases.
However, you are right. The bottom of society is not worse off now than they were 100 years ago, quite the opposite due to the wealth of freely available information about anything which increases your value in the economy. Bill Gates will always be happy to tell you that there are much less very poor people now than 10 years ago, and it is true.

In Western society, the poor people (the really, really poor) are rarely poor because they are lazy, but because they don't have the cognitive capacities to do make anything valuable. In some cases, benefits also F*ck them up, when they get almost as much money not working than they would doing low-qualified work. So there are many aspects to it, but no one cares really.

What is more problematic is the middle-class' situation.

It's the middle-class that is suffering the most in this, because they get taxed so that benefits can be distributed on one hand, and they have to compete for jobs with immigrants on the other.

 

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[Deleted78083]

@mon_fi
I am not sure you can even call what we have today a Capitalist Society. The government meddles in every possible thing, and makes it increasingly difficult for any real competition to grow in the market place.

So by trashing Capitalism based on what we have today, isn't really genuine. Just because they call it that doesn't mean that is actually what it is.

To be fair, I think it's still pretty capitalist. You can write a book, sell it for millions and retire, without having "connections", or anything else that you need in an oligarchy. i think the market has still a big say in things.

Also, I don't believe in "savage capitalism". I think capitalism that works is like a dog: it must be bred if you want to have a good relationship with it.

I think governments should intervene to protect consumers, dismantle monopolies, etc. I think capitalism is as good as long as it serves people instead of serving corporations. But it is true that governments saving corporation with tax payers money is outrageous, it's a communist behavior and should be proscribed, and I don't understand why people go protest for everything BUT that.

Anyway i'll stop here or i'll write a book about it.

 

[Deleted78083]

I live in England. We’re Brexit-ing partly due to this one. And yes, of course a steady stream of cheap labour is going to keep housing costs high and wages low.

I am not British so I didn't dare saying it, but indeed, Brexit was fueled by this feeling. This is what Boris Johnson understood, that Theresa May didn't. But we said no politics : P

 

[Onakosa]

Try to critically think about that statement rather than just parroting it because it is the popular thing to say.

No one's ever accused me of going for the populist vote before!

Calm down. I'm not disputing that relatively speaking people are 'better off'. The kind of poverty my parents grew up with in 1950s Ireland is unimaginable these days.

The OP seemed to be saying that people are poor because they don't make opportunities for themselves - which I don't completely agree with. And @Kak said "the poor have never been richer."

Without getting too woo-woo, I was just interested in what they meant by 'richer'. Arguably, having central heating, an indoor lav, and unlimited Happy Shopper micro-meals is far more than my aforementioned old mam and dad could ever have dreamt of - but I wouldn't say it made you rich. And if that is all you are ever going to have, and you have no opportunity to achieve more, I'd also argue that you weren't really rich.

Being rich isn't just about having your necessities met. It's about freedom (something I think all of us on here are chasing on some level) and true freedom relies on being able to make money which relies on being able to find opportunities. It's not just about having your needs met.

 

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[IvanMontillaM]

Being rich isn't just about having your necessities met. It's about freedom (something I think all of us on here are chasing on some level) and true freedom relies on being able to make money which relies on being able to find opportunities. It's not just about having your needs met.

Yep, one must seek one's own definition of Freedom. I'm on the path of discovering my own. Keeping it as simple as possible.

 

[j0elsuf]

Some people wind up in poverty because they spend way more energy on other stuff and they ignore their financial lives.

That's what happened to me. I had really bad mental health most of my life and there were times where I was so depressed that I couldn't work. So I would do stuff like take out credit cards and pay rent with them, enroll in college and take out crazy amounts of student loans and hardly ever go to class, stuff like that.

Artificially maintaining my mental health with drugs, alcohol, adult films, and 4chan (ESPECIALLY 4chan...HOLY CRAP CHRIST was that a time waster, I would be on that for 8, 10, sometimes 12 hours a day!) was pretty much my "career" until 30 or so. I'm not gonna sit here and beg for anyone's sympathy but I'm just trying to explain the above observation.

However! After everything is said and done, it's all about decisions. Unless you are disabled or something to where you can't make decisions on your own, nothing is "stopping" a person from being wealthy in most places of the western world.

Only reason why people turn to terms like wealth inequality is because they are frustrated and are acting out their frustration. I've been there, I know how that is like.

Even when I was super depressed in my 20s, I still decided to do all that dumb nonsense. That's why I think more communities like this need to exist cuz just from my short time here I can see that it supports everybody.

If sidewalkers are shown a better way and that it is possible to develop wealth for themselves in spite of what they went through and are shown that there is a way to improve just like anyone else, they wouldn't waste so much time raging against the machine and trying to replace it with a machine that they believe helps them.

 

[Kak]

Check out this thread... FEATURED! - Author spent 5 years interviewing 177 selfmade millionaires to find their secrets. Findings inside.

There is a lot of gold in it about the mindset differences between wealthy and poor.

This data could be pinned to the top of some category IMO, it is that good!

 

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[Kevin88660]

Hello, my friends,

I came across this post today: What’s Behind the Rising Inequality of Everything?

I understood it talks about the rich getting richer, greedy lobbying, government cronyism, but... does anybody ever talk about the poor getting poorer by their own means?

Let me explain myself: the laziness, guys smoking pot, girls getting pregnant in their teenage years, avoiding school, drinking booze Monday early, ignorance. I'd argue most of the time is not the richer getting richer, it's the poor people by their own initiative getting poorer. Example: my neighbor owns his own house, and I asked him "would you like to own many other houses and live off rent?" and he said, "if I can sell this one and live off my job I'd be just fine!"

He's gonna eat his own worn-out shoes when he gets old.

The article is naive to think crony capitalism and oligarchy only happens in U.S. There isn’t a country on this earth that those can influence and write the rules and have not used it to benefit them.

The deeper question is about the wealth pyramid is the perception that it is harder to stay in the middle.

People who finish their degree, expecting stable career progression in a big company are in for a shock-too many men fighting for a shrinking pie.

Without work from home becoming the norm anyone’s job will be replaced by the cheaper alternative found in the global market.

Another factor is QE and worldwide debasement of currency for decades. This favored people who owned financial assets over those who do not. In Asian cities real estates and land have appreciated 30-50x over the last 30 years. People have become overnight multi-millionaires following a government notice to acquire their land for Urban Development.

But this is not all doom and gloom. Wealth concentration and middles class destruction is always accompanied by underlying trends of massive changes. It is the question of whether you are playing along or getting wiped out. In the 70s the richest men in the world were all in the oil business. Trends and changes made big boys irrelevant too, if that can give you sense of fairness. Work hard, study the world and place your bets. You can increase your odds but the world doesn’t own you an explanation or result.

 

[cm-devpreneur]

Hello, my friends,

I came across this post today: What’s Behind the Rising Inequality of Everything?

I understood it talks about the rich getting richer, greedy lobbying, government cronyism, but... does anybody ever talk about the poor getting poorer by their own means?

Let me explain myself: the laziness, guys smoking pot, girls getting pregnant in their teenage years, avoiding school, drinking booze Monday early, ignorance. I'd argue most of the time is not the richer getting richer, it's the poor people by their own initiative getting poorer. Example: my neighbor owns his own house, and I asked him "would you like to own many other houses and live off rent?" and he said, "if I can sell this one and live off my job I'd be just fine!"

He's gonna eat his own worn-out shoes when he gets old.

Great article and great question especially for this forum where most members will get the long end of the inequality stick.

TLDR The wealth gap is real and it's a problem. I think to all Fastlaners. Try to be merciful and help others join the top 1% too because no one can go from the bottom to the top without help. No matter how hungry they are to succeed.
--

@IvanMontillaM
You are right, there are 'lazy' people who make choices that make them poorer over time and choices that make the wealthier wealthier e.g. the broke guy borrowing 5,000 to go gambling. He is making his lender richer and the betting company richer and more importantly he is making himself poorer. That's his choice. He doesn't deserve our sympathy when the bank comes to take his house and kick him and his family out on the street.

There are also non-lazy people who make themselves poorer for more noble reasons. E.g. the guy who doesn't buy a second house to rent out because he is helping his son get through college or something like that. He'll have very little to live on when he retires. Same outcome but maybe we should ask ourselves if we should build a society that stands by this kind of poor person.

Ok, the truth is we generally don't know the back-stories all we see is the behaviour that leads to poverty and we make assumptions.

I have seen people who pile on debt to help lift others and I know they are going to die poor and it breaks my heart. I have also seen children who are raised by parents who don't discipline them at all and I just know in my heart they will grow up to be lazy, unhappy and die poor. Sure I want to believe they will be fine but no one is born lazy. No one chooses to be a deadbeat failure.

We will all do great things but we shouldn't take it for granted that it is by natural luck, circumstantial luck, or the sacrifice of many others who came before that put us in a position where could be ready to exploit big opportunities when they come, to jump onto the fastlane.

Success is a combination of opportunity and hard work. There are so many factors that affect one's ability to access opportunity and one's ability to work hard. E.g. even being a first born could give you an advantage.

It's easy to jump to conclusions but issues of inequality affect the distribution of opportunity and the ability to exploit that opportunity. And we should count our blessings that our lives have led us where we are.

My main point is you don't know the many different factors that cause people to stay in poverty but something tells me it's not choice. It's probably education and discipline. E.g. if you don't know about the Fastlane you're going to work your fingers to the bone and die wondering where did I go wrong? On the other hand if you know what to do but you don't know how to apply it. You're f*cked because you lack discipline. But discipline is a lot harder to learn unfortunately.

One day if not already the case. You will be wealthy. You don't realise it but you'll probably be in the top 1% globally. Remember no one really chooses to make bad financial decisions. Be a wealthy person who tries to raise others up too. You can't make people take the opportunity but if you have the means. You can give people the opportunity.

Having said that this article is actually saying you can't do anything about inequality. The rich will become richer and the poorer will become poorer. That's how the maths work. It can't be helped. Their only hope is that the rich will have mercy and share some of their wealth. This cannot be helped. I've expressed this in a more human form above. Wealth is power. We need it to be evenly distributed in an ideal world because power can be used for good or evil, to liberate or enslave.