News for hackers. Stuff that matters.
Re:MIT graduate student says income inequality is actually a... by crimsonalucard on Thursday November 19, 2015 @08:34PM (#10599019)
It's very easy to see where all the wealth is going and how and why it is divided unequally in this county. It's a simple observation that is self evident.

Look at yourself, the average joe. Where is the wealth you generate going?

Let's follow the process step by step.

You work for a company and most of the wealth you generate is for said company... the company pays you a salary, lets say 10$/h. In order for the company to afford you, you must be generating more wealth then 10$/h. You're generating 20$/h of wealth and the company is shafting you by paying only half of that. It's one of the ironies of capitalism... employment is usually a deal that is unfair and weighted heavily towards the employer. But hey, it's a freemarket... you chose to get shafted.

The rest of your money goes to things related to your survival. Unless you own a house, then the majority of what's left will go to RENT.

So in the end, rent and labor output is what's sucking out the wealth from underneath you. Where does this wealth go? To the owners of the houses that are rented to you and the owners of the corporations you work for.

In short owners of both HOUSING and HUMAN Capital is where most of your wealth getting extracted. Logically if your friends and coworkers are also employees then the same shit is happening to them and the rest of the population of the united states.

Simply by observing where most of your own wealth goes, you can see where all of the wealth flows in this country and elucidate the primary cause of wealth inequality.

The person who wrote this article seems to think that rich people invest their wealth in something called "technological capital" which "depreciates." What is he talking about? Does he think wealthy people are putting their wealth into warehouses loaded with piles of smartphones and macbooks? Rich people put their money into real estate and stocks (aka Housing and Human capital).

Re:MIT graduate student says income inequality is actually a... by tomp on Friday November 20, 2015 @10:36AM (#10601676)
> employment is usually a deal that is unfair and weighted heavily towards the employer

I agree with most of your comment, but the sentence above is a bit of a fallacy. Sure, the employer isn't paying you the whole of the value you generate, but it works the same in reverse - you're getting paid much more than you would be if you were working on your own.

Math:

X = what you can produce on your own Y = what your employer can produce without you Z = what you and your employer can produce together

employment only makes sense if Z > X + Y. In that case, your split of Z is > X, and the employer's split of Z is > Y.

Re:MIT graduate student says income inequality is actually a... by crimsonalucard on Friday November 20, 2015 @12:01PM (#10602259)
Z is not what the employer and I can produce together. Z is what I and other employees produce when working together. The employer itself is just a thin layer of leadership that gets way more compensation then it deserves.

The reason why employers get an unfair share is due to strategic and organized negotiation. They utilize the might of the entire organization itself to negotiate salaries with each individual employee. Unions are designed to counteract this unfairness.