Quote:
Originally posted by Sparhawk
I think he's talking about this, onetime2:
While we do have more better off folks in this country, we have a many more worse off folks. I'm not really sure if this is even a solvable problem. I read recently that the average CEO 25 years ago had an income 12 times that of the average worker, now it is something like 100 times that of the average worker (I may be off on the percentages, but the net increase is about right).
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This problem is incredibly overrated. Some basic truths that need to be recognized:
1. There are more publicly traded corporations than ever before.
2. The stock markets have attracted more cash than ever before.
3. More people are invested in the stock market than ever before.
4. Executive stock options, loans, stock awards, etc have become a huge part of the compensation package.
5. These are all ridiculously new phenomenon.
Points 3, 4, and 5 are perhaps the most important economic facts of our time (home values and cosumer debt ranking alongside them).
Since there are so many more people in the market to own stocks, those who own big chunks of stock in popular companies become super rich on paper (or their compensation is boosted due to their stock options or grants). It's these super rich who are pushing the indexes you point to up. There will inevitably be a spring back effect from the high demand for stock and the number of super wealthy will decline. Executive compensation is heavily influenced by their stock options and the current high demand for stocks.
The relative newness of the average person's stock ownership lends itself to a problem. Calculating their wealth is difficult because it fluctuates on an almost daily basis and traditional measures like "Savings" don't cut it. So, the average worker's wealth and income is poorly calculated while the executive's income is widely publicized and easily tracked. New measures need to be created, vetted, accepted, and, finally, tracked so conclusions can be drawn. We are in the early stages of this process and grand assumptions about the gap between the wealthy and the average are almost completely without base.
The average person in America today has a higher likelihood of being prepared to take care of themselves financially in retirement than they've had in the past. There's more "wealth" available to all than ever before and just because there's a group of super well off people in the world it doesn't mean that the average person is somehow in bad shape.