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Debate On Inequality

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PostPosted: Mon Jan 14, 2008 1:48 am    Post subject: Debate On Inequality Reply with quote

It is questionable if a large percentage of the most wealthy Americans earned much of their wealth by adding significant value.

If the US is a meritocracy, then merit should be rewarded with commensurate pay. Does the average US based CEO add more than 300 times more value to the firm than the average US based worker?

The US's Corruption index is trending down (lower is worse) at 7.2 in 2006, from 7.6 in 2004, just above Chile at 7.0 in 2006 -- of course other countries are much worse -- China at 3.5 and Russia at 3.5, but many countries are ahead of the US, the Norway, Denmark, Australia, Canada, and more are all above 9.0. From this, it appears about 19 countries have a more transparent and less corrupt system than the US.

Posted by: Kirk | Tuesday, January 08, 2008 at 07:24 AM

It seems, the Economist magazine is considered mainstream media in Europe. However, most Americans know being "locked" in a welfare system doesn't provide incentives for individual improvement and upward mobility. Also, U.S. employers want workers who are ambitious, reliable, competent, etc. To discriminate based on race, sex, religion, etc, creates a competitive disadvantage to the firm. The U.S. is the most competitive country in the world. Moreover, I've provided data before showing U.S. union membership has fallen sharply from its peak. Union workers were grossly overpaid, while non-union workers were relatively grossly underpaid. That disparity is much more narrow today. The data also show U.S. real compension has risen sharply (e.g. 70% from recent decades). Reality tends to be much less biased than perception.

Posted by: Arthur Eckart | Tuesday, January 08, 2008 at 08:58 AM

The Economist asserted in "Inequality and the American Dream" that social mobility may be a bit lower in the US than certain European countries:

"This is not to let the American system off the hook when it comes to social mobility. Although the United States is seen as a world of opportunity, the reality may be different. Some studies have shown that it is easier for poorer children to rise through society in many European countries than in America. There is a particular fear about the engine of American meritocracy, its education system. Only 3% of students at top colleges come from the poorest quarter of the population. Poor children are trapped in dismal schools, while richer parents spend ever more cash on tutoring their offspring."

Posted by: kirk | Tuesday, January 08, 2008 at 06:51 PM

Kirk, perhaps you can explain how "it is easier for poorer children to rise through society in many European countries than in America" with a permanently higher unemployment rate, limited work hours, larger proportion of government jobs, greater union power, more obsolete jobs, labor immobility, wage rigidies, tax & welfare systems that discourage work, etc. In the U.S., there are many workers without a high school diploma earning over $30,000 a year with overtime, while the quantity and quality of education are higher in the U.S. than in Europe.

You may have received that information from the following article, which states: "At the top 146 colleges and universities, 74 percent of students come from the wealthiest quarter of society, compared with 3 percent from the poorest quarter." Perhaps one reason why poor students don't attend top schools is they're too expensive. However, another reason may be poor students, and their parents, place a low value on education (which may help explain why they're poor). The article has further information:

Posted by: Arthur Eckart | Tuesday, January 08, 2008 at 08:57 PM
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