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Income Inequality

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I'm not sure why anyone thinks CEO pay has anything to do with supply and demand or market forces.  CEO pay is determined by the Board of Directors, which shockingly enough is usually made up of CEOs of other large corporations, and the CEO himself usually sits on the Board of other corporations.  So really, it's just a big old white men's backscratching club.

 

As far as how much CEOs are "worth", my previous employer, a Fortune 500 company, was sinking and suspended raises and bonuses for 2 straight years, yet the CEO still got his $2 million bonus.  Yeah, I'm not so sure CEO pay is at all tied to actual performance of the company all that often.

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>The idea that "your kids can't succeed because you didn't" isn't only the opposite of American experience and values, it's potentially self-fulfilling.

 

Many of the self-defeating aspects of low class culture stem from economic uncertainty, not a lack of access to "education" or "values".  During the postwar boom, many people who were born into dysfunction were able to escape that world because of steady high-paying employment for low skill labor. 

 

Today many poor people are being suckered into taking classes at for-profit colleges.  They often attend medical assisting or massage therapy programs for a year, accrue $30,000 in debt, never finish the degree program, and go right back to the chaotic worlds they hoped to escape.  Whatever "education" they received actually put them in a much bigger hole.  They will end up having their social security garnished in 25 years to pay off those loans. 

 

Meanwhile, for those who do get full-time employment, the 401k they accumulate is doomed.  When I temped for Nationwide many moons ago, in an economy far, far away, I was literally *the* guy who opened the retirement fund withdraw requests.  The mountain of mail would show up at 4pm and as the clock ticked toward midnight, I'd still be there, nearly alone in a giant office building, opening those envelopes on the 4th floor at the Rings Rd. complex.  People were most often cashing out part or all of their 401K or borrowing from their annuity to pay off medical bills.  Other times it was a failed business, a divorce, or something else calamitous.  Sometimes you could tell the person was just dumb. 

 

My point is that 50 years ago, at the height of the labor movement, you were compensated while working and in retirement sufficient as to be able to deal with the crap that arrives in your life.  Even if you weren't formally educated, your mind was not being pushed into the bad places that more and more people are surely experiencing.  The only people who are surviving out there in sub-$40K/year land, which is probably well over half of American workers, are those who are incredibly dull. 

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>The idea that "your kids can't succeed because you didn't" isn't only the opposite of American experience and values, it's potentially self-fulfilling.

 

Except people from middle and upper class families aren't even getting jobs right now.  Tons of law graduates living in the basement.  Tons of people who once had their own contracting business now make $9/hr at Home Depot. 

 

The fields of law and constriction were oversupplied with workers due to being the default white collar and blue collar, respectively, jobs of the '80s, '90s and 2000s.

 

Bingeaux....and observant people saw this coming.

 

When Kirkwood Carbon moved in '03, they did a bunch of presentations about available training programs.  They had closed HVAC because so many people had already gone into it.

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Well, the problem is that the paychecks and stability of the profession attracted more and more people who weren't quite as suited to them.  At least, that was certainly the case with law, and I imagine (having no experience in the trade whatsoever) that it was the same with the construction trades.

 

A skilled lawyer will still make a good living, and a skilled plumber or electrician will still do so as well.  However, I'm guessing that the construction sector is probably experiencing the same thing the legal profession is: what used to be the lower end of the professional skills is now becoming readily available to the general population because of the Internet and the proliferation of DIY content in many media forms.  A skilled plumber or electrician is still going to make a good living, but general handyman work probably isn't as lucrative as it might have been 20 years ago because an average person (with enough motivation) can figure a lot of basic household handyman-type tasks by watching a few YouTube videos (or videos on the Lowe's and Home Depot sites or what have you).  Same with law.  The stratification within the profession has increased because a lot of basic things barely take a lawyer at all anymore, whereas the more complicated questions still do, and they often have a lot more money riding on them.

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Well, the problem is that the paychecks and stability of the profession attracted more and more people who weren't quite as suited to them.  At least, that was certainly the case with law, and I imagine (having no experience in the trade whatsoever) that it was the same with the construction trades.

 

A skilled lawyer will still make a good living, and a skilled plumber or electrician will still do so as well.  However, I'm guessing that the construction sector is probably experiencing the same thing the legal profession is: what used to be the lower end of the professional skills is now becoming readily available to the general population because of the Internet and the proliferation of DIY content in many media forms.  A skilled plumber or electrician is still going to make a good living, but general handyman work probably isn't as lucrative as it might have been 20 years ago because an average person (with enough motivation) can figure a lot of basic household handyman-type tasks by watching a few YouTube videos (or videos on the Lowe's and Home Depot sites or what have you).  Same with law.  The stratification within the profession has increased because a lot of basic things barely take a lawyer at all anymore, whereas the more complicated questions still do, and they often have a lot more money riding on them.

 

Lawyers still make the laws, so of course they can't exactly be expected to keep things simple while doing so to reduce the demand for their profession.

 

The lower end of the construction business is a lot less lucrative than it used to be because many of the smaller projects use illegal aliens.  In this area, the Amish also have an impact, and play fast and loose with the child labor laws.

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In this area, the Amish also have an impact, and play fast and loose with the child labor laws.

 

Don't you mean intrusive government regulation that stifles the "job creators"?

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And having the Amish do projects for you isn't even all that cheap anymore. A buddy of mine was taking bids on a house and they were just another bid. I think part of it was that we are far enough from Amish Country that you have to spend a lot on transportation/accommodations for the workers, though.

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Given the current size of the federal leviathan, I think it's perfectly possible to support child labor laws while still characterizing the economy overall as stiflingly overregulated.

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Given the current size of the federal leviathan, I think it's perfectly possible to support child labor laws while still characterizing the economy overall as stiflingly overregulated.

 

That is certainly the case with "reasonable conservatives", of which I would count you.  But with the radical Tea Party fringe - that views everything in evangelical apocalyptic terms - taking control of the Republican Party, it does make you wonder just how far back they are talking about when they keep saying they will "take our country back".

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And having the Amish do projects for you isn't even all that cheap anymore. A buddy of mine was taking bids on a house and they were just another bid. I think part of it was that we are far enough from Amish Country that you have to spend a lot on transportation/accommodations for the workers, though.

 

True enough, they have been moving out of the area due to "sprawl" and its impact on their kids.  Ever see a bunch of Amish teenage girls walking down a street with bookbags?  They're likely heading for a place to change.

 

People I know in the construction trade have said this about the Amish contractors:  "They do good work, they do complex work, they do fast work.  Pick two out of three."

 

There's also the growing competition with companies who hire illegal alien "day laborers".

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While attorneys certainly are needed as a part of our lawmaking process, I do find it a little unsettling that legislatures in the U.S. mostly consist of lawyers and people who bounce back and forth between being executives at large corporations and lawmaking. It would be nice if our lawmaking process also featured a larger amount of people from other backgrounds such as scientists, doctors, teachers, entrepreneurs and engineers. Much of Europe has that mix, certainly including attorneys and executives as well.

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While attorneys certainly are needed as a part of our lawmaking process, I do find it a little unsettling that legislatures in the U.S. mostly consist of lawyers and people who bounce back and forth between being executives at large corporations and lawmaking. It would be nice if our lawmaking process also featured a larger amount of people from other backgrounds such as scientists, doctors, teachers, entrepreneurs and engineers. Much of Europe has that mix, certainly including attorneys and executives as well.

 

A big part of it is lawyers work case by case, and can more easily clear the time to run than those in other professions.  Plus, those on firms can be kept on the payroll while running, and the expense justified.

 

Then there's the nature of modern campaigns.  You almost have to have conducted your entire life with an eye towards running for office.  People who think that way typically go into law.

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When is all this planned out?  Have I been missing some secret meeting?

 

I never really understood the gripe.  Would you hire a jeweler to build you a house?

 

There are several reasons why a lawyer would win a political election over some other professional, although the overall representation is dropping, especially in the HOR.  They are trained in the law.  They are effective and persuasive communicators.  They enjoy public speaking.  Their profession is 'representational' in nature.  They are good debaters.  The list could go on and on.

 

You also have to consider how you define a lawyer.  Is it simply someone who went to law school?  Obama and Romney both did, but neither actually practiced law all that much.  Id suspect that to be the case with many politicians

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>and can more easily clear the time to run than those in other professions

 

A critical reason why elected officials must be paid well, even when something like sitting on Cincinnati City Council is considered a "part-time" job. 

 

Smaller municipalities, townships, and occasionally school boards can be bullied when lawyers win seats.  The moms, etc., can be tricked by the most elementary procedural, etc., tricks. 

 

 

 

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>and can more easily clear the time to run than those in other professions

 

A critical reason why elected officials must be paid well, even when something like sitting on Cincinnati City Council is considered a "part-time" job. 

 

Smaller municipalities, townships, and occasionally school boards can be bullied when lawyers win seats.  The moms, etc., can be tricked by the most elementary procedural, etc., tricks. 

 

???

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When is all this planned out?  Have I been missing some secret meeting?

 

I never really understood the gripe.  Would you hire a jeweler to build you a house?

 

There are several reasons why a lawyer would win a political election over some other professional, although the overall representation is dropping, especially in the HOR.  They are trained in the law.  They are effective and persuasive communicators.  They enjoy public speaking.  Their profession is 'representational' in nature.  They are good debaters.  The list could go on and on.

 

You also have to consider how you define a lawyer.  Is it simply someone who went to law school?  Obama and Romney both did, but neither actually practiced law all that much.  Id suspect that to be the case with many politicians

 

If doctors push for a law requiring annual checkups, would we suspect conflict of interest?  Contractors requiring more stringent (and ungrandfathered) building codes?

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When is all this planned out?  Have I been missing some secret meeting?

 

I never really understood the gripe.  Would you hire a jeweler to build you a house?

 

There are several reasons why a lawyer would win a political election over some other professional, although the overall representation is dropping, especially in the HOR.  They are trained in the law.  They are effective and persuasive communicators.  They enjoy public speaking.  Their profession is 'representational' in nature.  They are good debaters.  The list could go on and on.

 

You also have to consider how you define a lawyer.  Is it simply someone who went to law school?  Obama and Romney both did, but neither actually practiced law all that much.  Id suspect that to be the case with many politicians

 

If doctors push for a law requiring annual checkups, would we suspect conflict of interest?  Contractors requiring more stringent (and ungrandfathered) building codes?

They already happens; there are numerous professional organizations that exist to further their professions, establish standards of practice, outreach and advertising, etc.....most have a governmental lobbying arm. I am sure there are dozens covering the medical profession  along. So yes, it does.

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Have we passed laws requiring yearly consultations with lawyers?  News to me...

 

I think this 'concern' stems from a fundamental misunderstanding of what drives business for lawyers.  It is not any particular law which drives demand, it is changes to the law.  Every time a law changes, the lawyers have to ressearch and litigation must be had to determine the law's application and reach in countless scenarios.  Furthermore, the idea that the profession is unified for any particular reform is just silly.  Lawyers represent different interests.  While the defense bar pushes for tort reform, the plaintiff's trial lawyer associations fight against it.  Some lawyers want environmental regulation.  Others do not.  In fact, it might be one of the more un-unified profession, as far as personal interssts are concerned.

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Have we passed laws requiring yearly consultations with lawyers?  News to me...

 

I think this 'concern' stems from a fundamental misunderstanding of what drives business for lawyers.  It is not any particular law which drives demand, it is changes to the law.  Every time a law changes, the lawyers have to ressearch and litigation must be had to determine the law's application and reach in countless scenarios.  Furthermore, the idea that the profession is unified for any particular reform is just silly.  Lawyers represent different interests.  While the defense bar pushes for tort reform, the plaintiff's trial lawyer associations fight against it.  Some lawyers want environmental regulation.  Others do not.  In fact, it might be one of the more un-unified profession, as far as personal interssts are concerned.

 

The one thing they are united for is complexity of the law. 

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^^Yeah.... the 'zealous advocacy' thing rings a bell.  But I'd say much more than half the time you put two lawyers and two clients in a room and just let them go, the clients are going to be the ones irrationally arguing with each other.  A big part of a lawyers job, some would say the primary duty, is to bring about resolutions to disputes which have reached a boiling point.  That said, I doubt you will ever hear a client say that his/her lawyer advocated too strongly on their behalf. 

 

^Not at all.  Saying lawyers, as a profession, are united in any way is like saying politicians are united.  Any given lawyer's efforts towards the changing or defending a law is largely dictated by the interests of his/her client, much like politicians' decisions are quite often dictated by the desires or their constituency.  Lawyers are hired to 'speak' for their clients.  They rarely do so for themselves.

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  However, I'm guessing that the construction sector is probably experiencing the same thing the legal profession is: what used to be the lower end of the professional skills is now becoming readily available to the general population because of the Internet and the proliferation of DIY content in many media forms.  A skilled plumber or electrician is still going to make a good living, but general handyman work probably isn't as lucrative as it might have been 20 years ago because an average person (with enough motivation) can figure a lot of basic household handyman-type tasks by watching a few YouTube videos (or videos on the Lowe's and Home Depot sites or what have you).

 

That's true, but the reason for that is partially what you state, but doesn't cover the whole scope of the issue. It's not necessarily "The internet rules, Pros drool, yet another triumph of technology over wasteful spending on human capital." While the internet can teach people basics, the names of components and how things work, it is positively terrible at teaching craftsmanship and an eye for aesthetics. Or people become overconfident in their abilities simply because of the easier access to product that big-box home improvement stores enabled.

 

Much of the DIY work I see looks like total ass. Plain, dull, half-assed. "You painted that bland gray room all by yourself? For only $40? No way! Then you slobbered gray paint all over the wood trim, then went and painted that all white for only $20? Man, you rule!"

 

The drop off in craftsmanship and novelty appeared almost in lockstep with the rise of the big-box home improvement center, and it let the pros slack off too. Because once the pros found out that people accepted dull blandness and so-so craftsmanship they figured out that they could do jobs faster and more cheaply without any negative repercussions from most customers, since for some reason the customers were willing to accept the same level of finish work quality that the customer could perform themselves. Like, "I'm sooooo badass. I only have the pros do it because I'm too busy with work. And they do just as good of a job as I would!" And of course it became a self-fulfilling prophecy that the skill level of workers would drop as they weren't required to learn how to finish things out in a high-quality manner.

 

When I see an intact '70s house, I find it fascinating that the fit and finish is miles beyond what we see today even if the colors are wacked-out. And this is in banged-out tract housing. Yet it's all gotta be ripped out for jagged, crooked, bumpy, improperly-measured stuff that just happens to be the right color: white.

 

Fun fact: an old-style Lowe's was still in Circleville until the mid-'90s. It was maybe 10,000 square feet and was mostly plants.

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Sure, and the DIY legal forms you can find yourself on the Internet can get you in plenty of trouble down the line, too, especially if your conceit exceeds your ability and you try to do the kind of thing that really does need an experienced professional, especially if you don't recognize it as a complex job at the outset.

 

Heck, forget pure amateurs.  Even actual practicing attorneys can get themselves into plenty of trouble trying to practice outside their particular wheelhouse.  The law really has gotten complex.  (I wouldn't hire the best carpenter in the world to do plumbing work, either.)

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Interesting that Time has an article that touches a bit on this in their most recent issue:

 

 

3. Automation

 

One of the big reasons behind the middle-class squeeze is automation — and it’s only going to get worse, possibly much worse. A recent study by researchers at Oxford University found that 47% of jobs in the U.S. are vulnerable to automation, not just in fields involving manual labor but also increasingly in fields involving complicated decisionmaking.

 

Looking forward, says Carl Benedikt Frey, co-author of the Oxford study, more and more low-to-medium-skilled jobs will be vulnerable to automation. “Take the autonomous driverless cars being developed by Google. This new technology may lead to workers such as long-haul truck driver being replaced by machines,” he says. “The ability of computers, equipped with new pattern-recognition algorithms, to quickly screen through large piles of documents threatens even occupations such as paralegals and patent lawyers, which are indeed rapidly being automated.” Even the bulk of service and sales jobs, Frey says, from fast-food-counter attendants to medical transcriptionists — the types of fields where the most job growth has occurred over the past decade — are also to be found in the high-risk category.

 

 

 

Read more: http://ideas.time.com/2013/10/17/10-reasons-texas-is-our-future/#ixzz2iU3PPdZ4

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Regarding automation, we recently got those oversize trash cans in our neighborhood so that the garbage trucks with the mechanical arms can come by and pick up the trash.  It's great for the residents, but I couldn't help but think of the affect it has on the employees who used to come by and pick up our waste.  Two and three man trucks are now down to one or two man trucks.  Not only that, but you can fit nearly anything in those garbage cans, so it affects the scrappers as well.  Just a small example of a larger issue.

 

That said, we can adapt.  We always have.  Automation is no new phenomena.  It has been effectively 'stealing' jobs for thousands of years.

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^and each of those 2 or 3 man trucks actually had another 2 or 3 guys that were out sick or on temporary disability/workers comp for back or shoulder issues.  That's straight from a manager at the City.

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^and each of those 2 or 3 man trucks actually had another 2 or 3 guys that were out sick or on temporary disability/workers comp for back or shoulder issues.  That's straight from a manager at the City.

 

Yep, and most of them are actually legit.  It's a repetitive motion thing as well as strain.  This was a major force behind the privatization of residential trash pickup.

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Here's the report from which Time was basing that claim:

 

http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

 

On page 57 of that study they list (in order from least likely to most likely) the probability of careers becoming obsolete due to automation.  There are lots of interesting jobs that they predict won't be around in the future, including telemarketers, loan officers, tax preparers, etc.

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Poof goes the middle class 

 

http://www.latimes.com/opinion/commentary/la-oe-mcmanus-column-inequality-20131023,0,7173397.column#axzz2iZ2KnJdI

 

Social mobility won't disappear; indeed, cheap online education will make it possible for the most gifted and motivated in the underclass to rise. But they'll have to be both very smart and very diligent; because of constant performance testing, there will be few second chances for those who don't get it right the first time.

 

But inequality will increase. And maybe that's OK, Cowen says. "I don't think we know the causal relationship between inequality and happiness," he told me. If people have decent low-cost housing, food and healthcare, they might even be happier in a middle-classless future, he speculates.

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Here's the report from which Time was basing that claim:

 

http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

 

On page 57 of that study they list (in order from least likely to most likely) the probability of careers becoming obsolete due to automation.  There are lots of interesting jobs that they predict won't be around in the future, including telemarketers, loan officers, tax preparers, etc.

 

I'm surprised telemarketers exist even now.....what with the "Do Not Call" list, nearly universal caller ID, and the disappearance of land lines (they are legally barred from calling cell phones).

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"Equality is the soul of liberty; there is, in fact, no liberty without it." ~Frances Wright

 

"Bottom 99% of households have seen zero income recovery since the 2007-09 recession":Highest #Inequality since 1917


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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Here's the report from which Time was basing that claim:

 

http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

 

On page 57 of that study they list (in order from least likely to most likely) the probability of careers becoming obsolete due to automation.  There are lots of interesting jobs that they predict won't be around in the future, including telemarketers, loan officers, tax preparers, etc.

 

I'm surprised telemarketers exist even now.....what with the "Do Not Call" list, nearly universal caller ID, and the disappearance of land lines (they are legally barred from calling cell phones).

 

Businesses, businesses, businesses. Especially small ones where there's a good chance of the owner being around. Businesses can't be added to the universal DNC. Sometimes I have to dodge 7 calls in one day. And that doesn't include the times when they call when we're closed.

 

Especially since most businesses today are forced to have a web presence. The bigger your web presence the more calls you get.

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But inequality will increase. And maybe that's OK, Cowen says. "I don't think we know the causal relationship between inequality and happiness," he told me. If people have decent low-cost housing, food and healthcare, they might even be happier in a middle-classless future, he speculates.

 

...or dropping "middle class" as an identity.  That book Neo Bohemia, which is ostensibly about Wicker Park (the hipster Chicago neighborhood) really had its theme on how a quasi-bohemian identity was a way of coping with low-wage contingent employment and what was a reduced "starving artist" standard of living...by adopting the role or idenity of "artist" or "creative type" or what-have-you.

 

As for the larger point...the end of average...i think we've already seen this concept introduced as the "winner take all society".  This book seems to expand on it.  Or going further back, a hyper-automated society of 'engineers and managers" in Kurt Vonneguts Player Piano....written..when...late  1940s or early 1950s? 

 

We've seen this coming for a long time now.

 

 

 

 

 

 

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"Equality is the soul of liberty; there is, in fact, no liberty without it." ~Frances Wright

 

The Founders and Framers, particularly Jefferson and Franklin, would have agreed vis a vis equality before the law and equality of opportunity.  Regarding equality of situation, they would have disagreed.  Vociferously. 

 

Indeed, the freedom to rise above the common herd, and enjoy the benefits of doing so, is a cornerstone of real liberty.

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Maybe we can finally admit that once again the two-income household has become unnecessary and unprofitable once all the costs of childcare, transportation, constant meal outsourcing, stress, tight schedules and opportunity costs are factored in unless the second income is at least $50-60,000 or even more. In the '70s when women were told to get to work or be made to feel guilty or unliberated, companies needed a lot of inexpensive human capital, wanted to increase its supply and lower its cost. Well, we've guilted women into joining the workforce but because of all this automation, computers and the internet, companies don't need that supply of human capital any more. The growth in those service jobs was the direct result of people being unable to handle things themselves due to a lack of time -- even though people were jumping through a million hoops just to earn only $2 more an hour than those working the service jobs.

 

What people have done is basically outsourced their servants. In the old days, once a household someone made the equivalent of today's $60,000-80,000 they hired servants. If they were making that kind of money at that time, they were probably working so hard that they were incapable of keeping themselves alive without help. Few of today's modern conveniences existed, so maintaining a home took a massive amount of time. Yet today, people will make millions without hiring a single servant. A real secret of the fast food, pizza and takeout industries is that wealthy people do indeed spend a lot of money on those things because they would nearly starve to death without them from working so hard. BUT! People who make a lot less are working just as hard and spending the same amount of money on outsourced home tasks yet have nothing to show for it like the wealthy people do. Sure, they did have something to show for it back in the '70s, '80s and '90s when the value of human labor hadn't been diminished to the degree it has today. There's no real point in both members of the household working if there's nothing to show for it.

 

Which means it's time for people to re-consider the one-income household. Whoever has the lower income potential should stay home or work a very reduced schedule that doesn't require a bunch of money to be spent just getting back and forth to the job. Today, that person is much more likely to be the man than in the past. Many of the skills men developed are no longer in need and it is why their unemployment is higher. Also, trust me, most men hate working.

 

Doing so will make humans more valuable and less expendable.

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"Equality is the soul of liberty; there is, in fact, no liberty without it." ~Frances Wright

 

The Founders and Framers, particularly Jefferson and Franklin, would have agreed vis a vis equality before the law and equality of opportunity.  Regarding equality of situation, they would have disagreed.  Vociferously. 

 

Indeed, the freedom to rise above the common herd, and enjoy the benefits of doing so, is a cornerstone of real liberty.

 

Except, as many Wall Street bank executives and the past two federal executives have demonstrated, if you're wealthy enough or powerful enough, the law is not being equally applied.  We have reached a point where too much inequality in wealth and privilege have eroded our liberty.

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>Whoever has the lower income potential should stay home or work a very reduced schedule

 

The key now is to get passive sources of income.  The best way is to buy a 2 or 4-family and live in it. I have worked 75 hours a week for the past 30 months to buy a house that I can rent out, should have it paid off by the time I'm 40, and after that expect to make about $500,000 in today's money by age 80 renting it out to college kids.  Meanwhile I know people who are 30-35 who are putting in pools, finishing basements, financing SUV's, and doing other stuff with their extra money that is the opposite of investing.  They're doomed!  The younger you are, the more critical it is to recognize this.

 

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Hate to burst your bubble.

 

Nothing passive about being a landlord.

 

If you think that you are in for a rude awakening. 

 

3 rentable units is not nearly enough 'Scale',  you will find you have all the headaches of being a landlord with few of the benefits.

 

And I am not saying that you can't start as small time landlord and work your way to prosperity.  Your 4 unit will barely be a start.

 

 

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Hate to burst your bubble.

 

Nothing passive about being a landlord.

 

If you think that you are in for a rude awakening. 

 

^^^This^^^

 

Especially in Cleveland.  Housing Court is notoriously pro-tenant.  This is understandable, as tenants vote and landlords often don't, or don't have one vote per unit.

 

 

 

 

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Maybe we can finally admit that once again the two-income household has become unnecessary and unprofitable once all the costs of childcare, transportation, constant meal outsourcing, stress, tight schedules and opportunity costs are factored in unless the second income is at least $50-60,000 or even more. In the '70s when women were told to get to work or be made to feel guilty or unliberated, companies needed a lot of inexpensive human capital, wanted to increase its supply and lower its cost. Well, we've guilted women into joining the workforce but because of all this automation, computers and the internet, companies don't need that supply of human capital any more. The growth in those service jobs was the direct result of people being unable to handle things themselves due to a lack of time -- even though people were jumping through a million hoops just to earn only $2 more an hour than those working the service jobs.

 

What people have done is basically outsourced their servants. In the old days, once a household someone made the equivalent of today's $60,000-80,000 they hired servants. If they were making that kind of money at that time, they were probably working so hard that they were incapable of keeping themselves alive without help. Few of today's modern conveniences existed, so maintaining a home took a massive amount of time. Yet today, people will make millions without hiring a single servant. A real secret of the fast food, pizza and takeout industries is that wealthy people do indeed spend a lot of money on those things because they would nearly starve to death without them from working so hard. BUT! People who make a lot less are working just as hard and spending the same amount of money on outsourced home tasks yet have nothing to show for it like the wealthy people do. Sure, they did have something to show for it back in the '70s, '80s and '90s when the value of human labor hadn't been diminished to the degree it has today. There's no real point in both members of the household working if there's nothing to show for it.

 

Which means it's time for people to re-consider the one-income household. Whoever has the lower income potential should stay home or work a very reduced schedule that doesn't require a bunch of money to be spent just getting back and forth to the job. Today, that person is much more likely to be the man than in the past. Many of the skills men developed are no longer in need and it is why their unemployment is higher. Also, trust me, most men hate working.

 

Doing so will make humans more valuable and less expendable.

 

Here's the thing, something I did not really "get" until I had a kid. 

 

I suspect it's pretty much a given these days that men are better at focusing and women are better at multitasking.

 

The latter is at much more of a premium when small children are involved.

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Here's the report from which Time was basing that claim:

 

http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

 

On page 57 of that study they list (in order from least likely to most likely) the probability of careers becoming obsolete due to automation.  There are lots of interesting jobs that they predict won't be around in the future, including telemarketers, loan officers, tax preparers, etc.

 

I'm surprised telemarketers exist even now.....what with the "Do Not Call" list, nearly universal caller ID, and the disappearance of land lines (they are legally barred from calling cell phones).

 

Businesses, businesses, businesses. Especially small ones where there's a good chance of the owner being around. Businesses can't be added to the universal DNC. Sometimes I have to dodge 7 calls in one day. And that doesn't include the times when they call when we're closed.

 

Especially since most businesses today are forced to have a web presence. The bigger your web presence the more calls you get.

 

I've always considered cold calling as somewhat different from telemarketing, though both are rapidly becoming obsolete and IMO were always ineffective.  By the way, with most small businesses "the owner" is never in.

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I've always considered cold calling as somewhat different from telemarketing, though both are rapidly becoming obsolete and IMO were always ineffective.  By the way, with most small businesses "the owner" is never in.

 

If it was dialed by a computer, it's telemarketing. If the number was hand-dialed it's cold calling if you ask me. I get 10X more telemarketing calls than cold calls. Maybe 20 times.

 

I don't answer a call from a non-surrounding state until I've Googled the number. Of course the other guys that work here don't care since I'm usually not there when they are.

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Hate to burst your bubble.

 

Nothing passive about being a landlord.

 

If you think that you are in for a rude awakening.

 

I've rather suspected this myself, but I agree with jmecklenborg's point that passive income is important, especially if you want to break into the upper middle class (maybe not as good as being a 1%er, but still a pretty good life).  I just much prefer owning dividend-paying equity shares to owning rental real estate.

 

I'm sure that Blackstone and some of the other massive private equity groups that have been noticed buying massive quantities of residential real estate to rent out will do quite well for themselves, but they have the scale (and the ability to hire professional managers and still have cash left over) to pull something like that off.

 

What people have done is basically outsourced their servants. In the old days, once a household someone made the equivalent of today's $60,000-80,000 they hired servants. If they were making that kind of money at that time, they were probably working so hard that they were incapable of keeping themselves alive without help. Few of today's modern conveniences existed, so maintaining a home took a massive amount of time. Yet today, people will make millions without hiring a single servant. A real secret of the fast food, pizza and takeout industries is that wealthy people do indeed spend a lot of money on those things because they would nearly starve to death without them from working so hard. BUT! People who make a lot less are working just as hard and spending the same amount of money on outsourced home tasks yet have nothing to show for it like the wealthy people do. Sure, they did have something to show for it back in the '70s, '80s and '90s when the value of human labor hadn't been diminished to the degree it has today. There's no real point in both members of the household working if there's nothing to show for it.

 

Which means it's time for people to re-consider the one-income household. Whoever has the lower income potential should stay home or work a very reduced schedule that doesn't require a bunch of money to be spent just getting back and forth to the job. Today, that person is much more likely to be the man than in the past. Many of the skills men developed are no longer in need and it is why their unemployment is higher. Also, trust me, most men hate working.

 

Doing so will make humans more valuable and less expendable.

 

Depends on how much "lower" that "lower income potential" is.  My wife has a lower income but she's still a chemical engineer.  She's not just working in a low-level marketing or human resources job.  (And I still don't know if she has "lower income potential" ... she does have an MBA, too.)

 

Also, I'd actually bet that hiring help is just as prevalent now as it was then.  You start seeing households in what I'd estimate are the 67th-75th income percentile now hiring cleaning services and lawn services.  I think you might have meant to say that people have started to outsource the tasks that they didn't have servants for; you used the example of fast food, pizza, and takeout places--so cooking, basically--and I don't think having a cook as a servant was really ever all that common outside the very wealthiest.  Cleaning services likewise are substitutes for what used to be more typical house-spouse (generally housewife) work.

 

I can agree that every couple should crunch the numbers for what it actually costs, not just what the couple actually gains, when the second spouse works.  For many, it very well might be more sensible for one spouse to stay home, especially if there is a significant disparity in earning power.  But that's hardly universally the case.  My wife and I crunched those same numbers, and at the end of the day, we have no problems whatsoever bringing an extra engineer's salary into the household and then redirecting some of that to hiring others to take care of some things that we would otherwise simply run out of hours in the day to do.  I think of it as buying time: they get paid, and we get hours of our lives back.  I call it a pretty fair trade.

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>Nothing passive about being a landlord.  If you think that you are in for a rude awakening. 

 

"Passive income" is a term.  It doesn't mean that you do absolutely nothing, like throw a $50 savings bond in a safety deposit box.  It is possible to get out of poverty with ordinary low-wage hourly jobs, however you need to work 70+ hours per week for at least 10 years and keep your living expenses ridiculously low.  Oh, and NO KIDS.  Not only do kids cost money, they keep you from making money outside normal business hours.  Plus, when they turn 121/2, they hate you. 

 

This isn't the place to tell my life story, however rentals were a bit of a family business when I was a kid.  I have also worked for landlords in various capacities.  I have also lived in at least 10 different apartments and have had over 30 roommates of every race, color, and creed.  I've lived through a lot of weird stuff but I've saved a lot of money.

 

However, as the title of this thread is "income inequity", it's important to note that people stay middle class to a large extent because their assets aren't generating *any* money.  The middle class does dumb stuff like buy campers and get into hobbies like golf that both cost a lot of money and keep them from making money on the side. 

 

Buying and living in a 2 or 4-family will not make you rich by itself but it's part of a larger strategy.  Plus, owning rentals is an excuse to own compressor tools and other cool stuff. 

 

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