Consequences of growing income disparity


Earlier this month, thousands of McDonald’s employees in 100 cities across the nation took to the streets to protest their minimum wage pay at $7.25 per hour. This protest followed a similar demonstration in early November by Walmart employees. Both of these come on the heels of the Occupy Movement, which began in 2011 and has all but fizzled out, a movement that protested the income disparity in the United States, where 1 percent of the population owns 40 percent of the country’s wealth.

As such protests and movements come and go, they raise many questions as to how to address the problem — but the reality of the situation can’t be denied. While conservatives argue that low-skill jobs shouldn’t get higher pay, the fact of the matter is that with billions of profits going straight to the top and a few sitting on hoards of cash, the millions employed by them get pinched and slow down the entire economy. And we aren’t just talking about McDonald’s and Walmart — though those are prime examples of how greed at the top bleeds not only the employees but the taxpayers who subsidize their food, housing, etc. A study by the U.S. House Committee on Education and the Workforce showed that each Walmart location costs taxpayers $1.7 million a year.

Beyond Walmart and McDonald’s (even Apple has come under intense scrutiny about pay), on average, CEOs make 273 times as much as their average worker (other estimates show as much as 380 times) and over the last 30 years, CEO pay at American firms has risen 725 percent, more than 127 times faster than worker pay over the same time period, according to the Economic Policy Institute.

The argument for higher taxes on the rich, higher wages for the poor falls short with conservatives with the idea that the rich should not be punished for their success. And they have convinced many to think that they are being punished because they pay more in taxes than everyone else. Monetarily speaking, yes, they pay more; but relatively speaking, billionaires only pay 14 percent more in taxes than those living in poverty. But none of that matters in the end because, well, those who have the most control those in power, which is why the most recent attempt in Congress to raise the minimum wage was shot down by Republicans who control the House. (It’s been more than four years since the minimum wage has been increased though the top 1 percent’s wealth has continued to grow despite the recession.)

Perhaps the rich feel more of a sense of entitlement about hoarding heaps of cash instead of actually rewarding their employees with better pay and consequently better spending ability, which in turn makes the rich richer — common sense seems to be lacking here. We have hope, though, that something will ring clear for those who have the ability to change this plight of income inequality and disparity. It won’t happen overnight ... but surely it will happen, one way or another.


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You think when Ray Kroc expanded McDonald's hamburgers he could have imagined the vast majority of his workforce would be anything other than young Americans kids looking for a starter job?
Never vast numbers of losers and illegal immigrants with children to support, that was never in the business model.
Most of this "realignment" is due to a weakened dollar and an American populace which see's illegal immigrants as beneficial to America.
This talk of unionizing fast food workers is garbage for the ears of the ignorant.
If you want proper employment, seek training and urge the American government to keep the dollar strong and UN-inflated. Also seek to remove vast numbers of illegals who keep labor rates cheaper and American workers who will not work with hordes of illegals. What American young person wants to work where he cannot communicate with his fellow workers? Have you been to a Wendy's lately? You'll see what I am talking about.

posted by Scapegoat on 12/14/13 @ 08:07 a.m.

I have to hand it to Krugman, within his frame of reference i.e. economics, hardly a hard science, he is a superb. Every once in a while he even sees the ecological issues of our times.

His editorial in the NYTimes is so right on. Succinctly inequality is the fundamental drag on our economy and the poisoner of our politics, preventing us from dealing with our problems.

No one says it better than Krugman.

posted by cassandra20 on 12/16/13 @ 06:13 a.m.

Krugman is a cruel joke. He always advocates more spending by government. The long term consequences of which affect people on the low end of the economic scale. It's clever I suppose. Those effected never know what hits them. It manifests itself in fast food workers demanding 15 bucks an hour and being unionized. The very forces which will deny them a future.
As with liberalism, any idiot can advocate more spending. The real trick is to promote growth without simply printing money and inflating the currency. Something Krugman and his ilk, have no clue.

posted by Scapegoat on 12/17/13 @ 08:08 a.m.

Here’s the bottom line to this issue: we either accept the fact that there is no such thing as equal intelligence, equal ability or equal reward and, as opposed to what my grandkids get told in grammar school, not everyone is a winner. On the other hand the “everyone is a winner” concept sure sounds nice, but the reality of, life is quite different as anyone who has ever played sports (where a righteous accurate score is kept) knows. By the same token not everyone is equally intelligent and/or motivated.

Put another way life isn’t always fair, and even though we as a society do what we can to “level” the playing fields of day-to-day existence there will always be losers and winners. This is what free enterprise and an open market are all about, albeit with reasonable built-in safety nets and assistance for the lesser or unlucky among us. If we curried a system that allowed everyone to share equally (even though not everyone produces equally) then we don’t have free enterprise anymore we have socialism, which is the direct opposite of everything that makes us the greatest nation in the Modern World. Just my opinion.

posted by Chilibreath on 12/21/13 @ 06:49 a.m.
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