Some folks say that this income inequality thing has been blown all out of proportion. The upper groups aren’t doing so well, actually, because life is more challenging and expensive at that level. This is a follow-on post to our main discussion in Zero Sum Games.
Poor Little Rich Guys.
It’s really hard being one of the elite top earners, so don’t call them “rich.”
In late 2010, Liz Weston wrote an MSN report explaining why no one should think $250,000 was a rich income. Comments like this are made casually by the right wing on television and talk radio, easy to hear, sometimes hard to find in quotable form. The point seems to be: Life is harder when you are floating on the surface of the pond, than when you are underwater at the bottom.
A (2011 Apr) Free Money Finance (FMF) discussion took on this self justification for those earning over $250k (the starting income for those in the top 2% of all incomes in the U.S.). Census Bureau data (2011 Sep) and showed that these are elite people, earning 5 times more than the median U.S. income. Recall, median is the dividing line for household earners, half of all households earn more, half less.
The FMF point was that these guys have developed insatiable hungers for stuff. They look upwards toward the top 1%-ers and ‘need’ what they see. The poor elitists in 2% level get into huge mortgages, heavy debt, etc., and are really unhappy.
FMF said the elite need to live more frugally. FMF got it right, in our opinion. Suppose they earned their $250k but lived within a budget set to the median $49,500/yr salary. They would have zero financial problems and could still swagger about, living better than 50% of our population. Tune down expectation – why vacation houses, yachts, Mercedes and Lexuses? For that matter, why any new cars every year?
Big earners get into bigger hungers, go into huge debt. Their troubles make them big whiners, and mimic Ayn Rand’s moocher class. Not pretty, guys.
Elite incomes do not automatically mean happiness, just enhanced purchase power. Wealth brings great expectations, temptations, tensions, debt, stress, suspicion, anger, sometimes enhanced suicide rates. No joy either promised or delivered, just cash.
According to the apologists, critical comments like these are just evidence of class warfare by the lower level gripers. In these weeks remaining before the 2011 Christmas holiday, we will look at which grinch it was that really has been stealing everyone’s Christmas.
Update: 2011 Dec 11 Market Place (American Public Media) interviewed a formerly high income family who lost their money. The 6 year old said “We were not rich. We just had money.” The 6 year old was right. Wealth is more than current earning levels. (Link not available at this time.)
We have summarized the income inequality points in our page American Income Pump.
Charles J. Armentrout, Ann Arbor
2011 Dec 9
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