I didn’t read this in The Nation or some other lefty journal. It was on the CNN Money website. The observation didn’t come from some pinko/socialist/Harvard-teaching/Vermont-living/Kenyan-born Democratic politician. It came from research conducted by the International Monetary Fund. Its conclusion, in the words of the CNN Money subhead:
Wealth does not trickle down from the rich to the poor. Period.
In fact, concentration of wealth in the hands of the rich, the report concludes, is bad for the economy. In the words of the report itself:
[I]f the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth. The poor and the middle class matter the most for growth via a number of interrelated economic, social, and political channels.
So, income inequality is a problem, not just for the people at the lower portion of the income ladder, but for the entire economy. And here are the report’s general recommendations for lessening inequality.
Irrespective of the level of economic development, better access to education and health care and well-targeted social policies, while ensuring that labor market institutions do not excessively penalize the poor, can help raise the income share for the poor and the middle class.
Interesting. Maybe the notion that making the rich richer is good because they’re the “Job Creators” (The word “creator” in that term was carefully chosen to evoke God-like images of The Creator) and their wealth will trickle down to others is a self serving myth created by those at the top of the heap and their enablers. And maybe, if wages were higher and social/educational programs were stronger, we’d all be better for it—except, of course, the folks who have benefitted the most from our current robber-baron levels of income inequality.
This article appears in Jun 11-17, 2015.
Tell that to the realtors, mortgage lenders, title companies, appliance sales people, carpet and flooring companies, hvac contractors, roofers plumbers, carpenters, drywallers, painters, window covering sales people,hardware stores, car dealers, doctors, lawyers, dentists, psychiatrists, bankers, hair and nail stylers, optometrists, wedding planners, hospitals, elder care centers and funeral homes, that are all doing business with the last multi millionaire that moved here.
They would tell you that they thrive on trickle down economics. It would appear that CNN has an agenda. Sorry to break the bad news to you but minimum wage is for minimum experience. Artificially inflating wages with experience will collapse on itself and business understands that.
So the IMF which is mostly funded by US taxpayer dollars and is a socialist/communist based organization agrees with our local socialist/communist.
Imagine that.
LOL @ the IMF being a socialist/communist organization. Do you folk even know what those terms mean? And can you really say that wages have kept up with inflation? That there is no problem with those at the top hoarding the wealth, giving us the middle finger the whole way? It’s not about artificially raising wages to appease the underskilled. It’s about paying people a livable wage for the work they do. Want to talk about ridiculous wage increases? Look at those making millions, billions even, to do **** all.
Living wage is an artificial term made up by the left. If you overpay for services of the under skilled it does nothing but expand the economy of scale for everyone above them. Truth be told, the people with money problems still will have money problems..
The US used to operate under a different system. It was called “improve yourself and move up the ladder.” But the instant gratification crowd aligned themselves with unions that were hard up for stooges to represent and here we are.
Hey stalecloud
Dominique Gaston André Strauss-Kahn (French pronunciation: [dɔminik stʁos kan]; born 25 April 1949), often referred to in the media,[1][2] and by himself,[3] as DSK, is a French economist, lawyer, politician, and member of the French Socialist Party (PS). Strauss-Kahn became the managing director of the International Monetary Fund (IMF) on 28 September 2007, with the backing of his country’s president, Nicolas Sarkozy, and served in that role until his resignation on 18 May 2011 following allegations that he had sexually assaulted a hotel employee.[4] Other allegations followed.
https://en.wikipedia.org/wiki/Dominique_Strauss-Kahn
Thank you for clearing that up.
David W is an idiot and a liar. I AM an HVAC contractor and i can tell you for certain that all contractors do better when the middle class is booming. middle class and blue collar households are the staple of small shop contractors throughout the US, as they use our services for both repairs and renovation far more often (because there are far more blue collar and middle income households) and on a wider basis than the 1% or corporate america. large shop contractors and construction corporations are the only ones who really benefit from trickle down as they are too big to profit from small job (1,000 – 10,000$ tickets) sales and home service. and small job sales and home service is where the vast majority of contractors (Like Me) make their income.
And so what’s wrong with being a Socialist, What, Again?
Jesus was.
As long as we have labor supply exceeding demand we will have high unemployment and low wages. Labor supply has been maintained (by both parties) at high levels by lax immigration policies for the past 30 years or so.
I’m afraid a higher minimum wage will only lead to more illegal immigration as businesses try to get around the requirement and the feds look the other way.
Bslap, we had better come down on the businesses that bring them here first and foremost by the truckloads. I have lived in different communities that are resorts and I have seen it. They are brought in by farmers and construction companies in huge numbers. In Arizona it is almost a joke because every other person hires illegals for care in their homes of the elderly, to do yard work regularly, and even by Walmart. So I think we need to quit the hypocrisy. BTW… nobody is fighting for their jobs… that is a lie perpetuated by the Republican party. You can research the amount of available jobs easily for what most of them are paid. Don’t you remember the special Tom Brokaw did about this and how many people in construction bring people here because they can’t find people who will work for what they can afford to pay? THis was on TV with faces and names. Many of these people receive below minimum wage so that is not the issue at all. This is a trumped up issue by the Republicans and people buy it over and over again. Yes we need immigration reform but it will never happen based on lies. Read the current laws that so many cry aren’t being enforced. So many are so old they cannot be.. they do not make sense. All politicians in Arizona know what is going on and do nothing because they help Arizonans. The rich are coddled in our country and do not pay their fair share and the politicians excuse it because of the lie of “trickle down”. So the rich are richer and the poor are poorer. Please do not blame the immigrants. Change the reason for the problem and it’s not build a wall.
It’s pretty clear to anyone who’s ever played Monopoly that when one person (or small group of people) get all the cookies that the game is over. How soon will it be before there are trillionaires?
@What, Again: A member of the French Socialist party as managing director for 4 years does not a socialist institution make. The current IMF CEO is Christine Lagarde, who falls on the center-right side of the political spectrum. So, by your logic the IMF is now a conservative group. Problem solved!
@Slim Pickens: Living wage is not an artificial term, and it’s not some whimsical concept imagined by “the left.” It’s common sense and logic. Too many people are busting their ass for the system and are getting **** on in the process. Not everyone is fiscally responsible, true. but you can’t babysit everyone. There’s plenty of irresponsibility at the top as well. How can CEOs accept bonuses and cut jobs at the same time? The “Golden Age” is over. Wake up.
David, David, David. When you need to deflect away from one topic you screwed up you pick ANOTHER screwed up topic with a populist following. So what if trickle down economics doesn’t work? You have no REAL proof redistribution will work and don’t anyone use numbers from the ’50s & ’60s when post war US industry dominated the rest of the recovering post war global economy. What I would like to see is how much money, per annum would go into the hands of the poor if it was taken from the rich. You can certainly use those previous high tax rates but even those were not maintained long enough to prove that redistribution actually worked. Maybe you could use the riches amassed by Germany during WWII as your best example; THEY certainly knew how to handle redistribution.
The money I have made over my lifetime didn’t come from redistribution. YOU can wait for the gov’t to act. YOU can wrongly encourage others to wait for the gov’t to act but the smart money is on those who go out and work.
And I believe there are a couple guys in jail for employing illegals in a local popular eatery; a far cry from the farm fields and shrub cutters wrongly portrayed as being populated with illegal labor.
The issue is not hiring “illegals” instead of “real Americans” as much as the shipping of jobs to other countries. Case in point: a nice Tucson born and raised company manufactured well-respected electronic equipment (i.e., e-collars for training dogs). They employed about 100 people. The company was bought by a large corporation that cut costs and moved the entire manufacturing operation to Taiwan. The owners/sellers no doubt did well; the workers doubtless did not; salaries that bought local goods and services disappeared. There are only so many jobs in the world and, as long as corporate American seizes opportunities to export them for profits instead of local growth, any remaining prosperity in America will gradually become more and more diminished.
David W – 1 millionaire won’t be as beneficial to the businesses you mentioned as much as if 1,000 people had an extra $10,000 to spread around.
The more people who have money, the more that gets spent. The economy relies on people earning and spending money.
When a significant majority of the wealth is owned by so few people it can’t be spread as fast and the economy will stagnate. While some people can’t afford an apartment there are billionaires with more mansions than they have family members.
Thanks for not calling me an idiot and a liar like Patrick O. Your assumption is correct, but I then have to ask, where would your 1,000 people get an extra 10,000 to “spread around?” Last time I checked the government does not operate any profitable venture, so it must be confiscated from the millionaires.
Small business in America derives 60% of their revenues from real estate transactions. It sounds hard to believe but you have to follow the money. And the home buyers referenced are not 0 down, can’t afford the mortgage type buyers.
But let’s look right at Patrick O’s business for a minute. He talked of selling and installing HVAC units. Who do you think invested in large corporations so that their R&D could produce the products that he so proudly sells? It’s the wealthy and Wall St investors. Wealthy people do NOT let money rest. They use it to make more. They always have and always will. It’s just that government penalties (Tax law changes) expand or contract investments.
Business grows, hires employees and the process repeats itself over and over. I think there are just some people that refuse to understand.
Poor people still aren’t hiring.
Activists argue that the greater good for society is achieved through justice. They argue that government should in turn attempt to align the interests of those pursuing profits with the interests of the labor in order to produce societal advantages for the majority of society.-wikipedia
That is an artificial whimsical concept. Even “the greater good” has suffered from bastardization by activists.
Actually the real job creators are small businesses.
The problem of the excess concentration of wealth and political power in too few hands is real. It’s one thing that both the Occupy movement and the Tea Party movement can agree upon.
Redistribution won’t work because it involves the government picking winners and losers. The over concentration of wealth and power is a function of government picking winners and losers beginning back in 1913 with the creation of the Federal Reserve under a Democrat. That error was compounded by the switch to a FIAT currency in 1971 under a Republican. Government tried to mitigate that by creating Social Security, Medicare and most recently the ACA, which are actually schemes to take from young healthy people and give to old and sick (usually old) people The first two are basically bankrupting the country and fit the dictionary definition of a ponzi scheme. Look it up if you don’t believe me. The jury is still out on the ACA but the early signs aren’t promising.
There is no partisan solution. In fact both Ron Paul and Elizabeth Warren have a lot of insight. George the First, Bubba, George the Second and Obama have one thing in common. They are all slaves to Wall Street and do whatever it takes to protect the “Too Big to Fail,” thus accelerating the overwhelming concentration of wealth and political power in fewer and fewer hands.
All this talk about Socialist, Communist, Free Market etc. is sort of silly to me. The real issue is crony politics or crony capitalism, which isn’t capitalism at all. Rather it is trading bribes masquerading as political campaign contributions or fat jobs after leaving government or speaking honoraria etc. for special privilege and advantage. All the partisan BS is actually sound and fury signifying nothing.
Of course everything I think and write could be wrong.
@Slim Pickens: It’s interesting that you pick that section out of the whole entry on living wage to post. And how does that prove that the concept of a living wage is artificial and whimsical? Below this section there is this quote from FDR: “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.” So …
If the concept you copied was truly put into practice, how would society not succeed? Why are you so against corporations not being just to the people doing their dirty work? Are you the villain from Inspector Gadget?
Not at all. The market economy and availability of workers framed the value of pay scale. Secure the border, reduce taxes on investment and watch the economy grow, including wages. That scenario promotes new entrepreneurs.
Contrast that to eight years of Obama’s redistribution. The market moves higher when Fed doesn’t raise interest rates but the economy remains lifeless. Hopeless.