Gap widens between rich and poor by Magonsdaughter

REAL WORLD EVENT DISCUSSIONS

Gap widens between rich and poor

POSTED BY: MAGONSDAUGHTER
UPDATED: Monday, October 17, 2011 10:37
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Saturday, October 15, 2011 8:03 PM

http://www.huffingtonpost.com/2010/07/08/income-gap-between-rich-a_n_6
39984.html

New data show that the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest parts of the population in 2007 was the highest it's been in 80 years, while the share of income going to the middle one-fifth of Americans shrank to its lowest level ever.

The CBPP report attributes the widening of this gap partly to Bush Administration tax cuts, which primarily benefited the wealthy. Of the $1.7 trillion in tax cuts taxpayers received through 2008, high-income households received by far the largest -- not only in amount but also as a percentage of income -- which shifted the concentration of after-tax income toward the top of the spectrum.

The average household in the top 1 percent earned $1.3 million after taxes in 2007, up $88,800 just from the prior year, while the income of the average middle-income household hovered around $55,300. While the nation's total income has grown sharply since 1979, according to the CBPP report, the wealthiest households have claimed an increasingly large share of the pie.

Arloc Sherman, a researcher for CBPP, said the income gap is expanding not because the middle class is losing income, but because the wealthiest incomes are skyrocketing.

"If income growth had been shared equally among all income groups, the families at the bottom would have $6,000 per year more than they do now, and the middle would have $13,000 more," he said.

Sherman said one key to closing the gap is a responsible tax policy.

"It would be a big step in the wrong direction to enact proposals like a big rollback in the taxes on the wealthiest estates," Sherman said. "It would probably help to enact some of the middle class tax extender proposals advanced by the President and the Democrats, including things like the extension of the expanded child tax credit."

The CBPP data do not show the effect of the recession that began in December 2007, but economists say that the recession has probably reduced the income gap only temporarily due to the severe drop in the stock market.

"Everyone, rich and poor, has been hammered in this recession," Sherman said. "But in the past, the wealthy have rebounded more easily than the middle."

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Saturday, October 15, 2011 8:06 PM

MAGONSDAUGHTER

And in the UK

http://news.bbc.co.uk/2/hi/8481534.stm

Rich-poor divide 'wider than 40 years ago'
Council flats near Whitechapel in London
Neighbourhood renewal policy action is needed, according to the report

The gap between rich and poor in the UK is wider now than 40 years ago, a government-commissioned report says.

"Deep-seated and systemic differences" remain between men and women and minority groups in pay and employment, the National Equality Panel found.

It said in areas such as neighbourhood renewal, taxes and education, policy action was needed to limit inequality.

The issues raised would need "sustained and focused action", Equalities Minister Harriet Harman said.

"But for the sake of the right of every individual to reach their full potential, for the sake of a strong and meritocratic economy and to achieve a peaceful and cohesive society, that is the challenge that must be met," she added.

Earning power

Apparent discrimination against people from ethnic minorities was revealed in the report, with those from nearly every minority group less likely to be in paid work than white British men and women.

FROM THE TODAY PROGRAMME

More from Today programme

The panel - set up by the government in 2008 - found that despite women up to the age of 44 having better qualifications than men, men were still paid up to 21% more per hour.

But the authors pointed out that some of the greatest differences come within social groups.

Among women, many work part-time, earning less than £7.20 an hour, much less than the median pay of £9.90 across the country.

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Saturday, October 15, 2011 9:42 PM

SIGNYM

I believe in solving problems, not sharing them.

Of course it is.

"Trickle down" is performing exactly as intended.

And that's what Britain gets for electing a conservative government: the banks get to gamble and the taxpayer gets to pick up the pieces.

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Sunday, October 16, 2011 4:02 AM

NIKI2

Gettin' old, but still a hippie at heart...

Interestingly, I seem to recall that there was a kind of sweep of Conservatives getting in government in manyp places in the Westernized world a few years back...you don't think tht could have ANYTHING to do with it, do you? Nah, silly me, there couldn't possibly be a connection...

Hippie Operative Nikovich Nikita Nicovna Talibani,
Contracted Agent of Veritas Oilspillus, code name “Nike”,
signing off

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Sunday, October 16, 2011 4:11 AM

AURAPTOR

America loves a winner!

Quote:
Originally posted by SignyM:
Of course it is.

"Trickle down" is performing exactly as intended.

And that's what Britain gets for electing a conservative government: the banks get to gamble and the taxpayer gets to pick up the pieces.

Actually, a rising tide lifts all boats. The slow economy, with so many out of work, lowers the tide. As for trying to blame the conservative govt for this, nonsense. It's the logical conclusion of decades of socialist, entitlement spending. You've programmed a society to rely on the central govt as their source for everything, and crushed the individual spirit. And THAT's what you get with socialist systems.

" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

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Sunday, October 16, 2011 5:15 AM

SIGNYM

I believe in solving problems, not sharing them.

Okay rappy, it seems just yesterday you were blaming this all on "fannie and freddie". So, does this mean that fannie and freddie were NOT to blame? Do you have the faintest clue about what it means to actually think about information, or are you just repeating the latest unsubstantiated right-wing bullshit?

Cause, yanno, I have actually looked into this. I think I know what the answer is, and I have information to back up my opinion, but you don't.

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Sunday, October 16, 2011 8:42 AM

AURAPTOR

America loves a winner!

You have your far, extreme Left wing / administration talking points, and I have the facts.

That you don't like or agree with me, is irrelevant.

" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

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Sunday, October 16, 2011 9:46 AM

SIGNYM

I believe in solving problems, not sharing them.

Quote:
I have the facts.

really? Did you bring any to this discussion?

Well, since you have not brought any facts to this table... and just discredited your own earlier statements about Fannie and Freddie... your "facts" pantry looks pretty bare.

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Sunday, October 16, 2011 3:26 PM

MAGONSDAUGHTER

Quote:
Originally posted by AURaptor:
Quote:
Originally posted by SignyM:
Of course it is.

"Trickle down" is performing exactly as intended.

And that's what Britain gets for electing a conservative government: the banks get to gamble and the taxpayer gets to pick up the pieces.

Actually, a rising tide lifts all boats. The slow economy, with so many out of work, lowers the tide. As for trying to blame the conservative govt for this, nonsense. It's the logical conclusion of decades of socialist, entitlement spending. You've programmed a society to rely on the central govt as their source for everything, and crushed the individual spirit. And THAT's what you get with socialist systems.

" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

so how do you explain the trend, which has been occuring prior to GFC?

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Sunday, October 16, 2011 3:29 PM

MAGONSDAUGHTER

http://www.usatoday.com/money/companies/management/story/CEO-pay-2010/
45634384/1

The heads of the nation’s top companies got the biggest raises in recent memory last year after taking a hiatus during the recession.

At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.

Two years of scaling back amid tough economic times proved temporary as three-quarters of CEOs got raises in 2010 — and, in many cases, the increases were substantial

The sizable pay hikes came even though the economy’s recovery remains frail, unemployment is high and corporate profits last year were roughly flat, up 1.5%, from where they were in 2007 when the stock market peaked.

Says Kevin Murphy, professor of finance at the University of Southern California, “We have the recipe for controversy over CEO pay: big increases in CEO pay that show up following run-ups in stock prices coupled with high unemployment rates.”

Taking a look at trends show that in 2010, CEO pay:

•Climbed back toward prerecession levels. Median CEO pay in 2010 was $9.0 million, based on 158 Standard & Poor’s 500 index companies with the same CEO serving all of 2009 and 2010 that have reported CEO pay, according to the USA TODAY analysis of data from GovernanceMetrics based on proxies that have already been filed.

The median amount that CEOs actually took home — which includes salary and cash bonuses, as well as stock and options awarded in previous years that vested or were cashed in — was $8.6 million. That’s the most CEOs have pulled down since the median of $9.2 million in 2007, according to GovernanceMetrics’ analysis of S&P 500 companies.

•Bounced back in a big way. CEOs’ 2010 median pay jumped 27% from $7.1 million in 2009, one of the largest increases in recent history. The jump was a complete reversal from 2009 and 2008, when most CEOs took a pay haircut. The growth in CEOs’ median pay topped the median 21% total return that investors would have collected if they owned shares of the companies in the compensation analysis.

•Delivered big bonuses. CEOs received a median of $2.2 million from bonuses, up 47% from $1.5 million in 2009. And that comes on top of a healthy 7% boost to the median salary, which is now $1.1 million.

•Set up for an even bigger payday in the future. CEOs saw the estimated future value of stock and options awards take off in 2010, with the median value gaining 32% to $5.6 million. These stock and options, many of which were granted when stock prices were much lower than they are now, stand to create a shower of wealth when CEOs cash them in.

Tough to swallow while jobless struggle

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Sunday, October 16, 2011 3:34 PM

MAGONSDAUGHTER

http://www.stuff.co.nz/business/money/5477450/Pay-gap-between-bosses-a
nd-workers-widens

Pay gap between bosses and workers widens
TIM HUNTER

Last year, publicly available figures suggest the most highly paid chief executive of a New Zealand listed company received more than 50 times the pay of his average employee.

At another New Zealand listed company, with a highly successful track record, the CEO received an estimated 10 times as much as his average employee.

No prizes for guessing the name of the first CEO - Telecom's Paul Reynolds - but the second?

Since pay rates for top listed company executives arrived in the public domain, the widening gap between the remuneration of the rank-and-file and top executives has attracted much discussion.

In America the divergence has become extreme. According to one US study by Mercer for the Wall St Journal, the ratio of average CEO pay to average worker pay was 24 to 1 in 1965, 71 to 1 in 1989, and 262 to 1 in 2005.

What about in New Zealand? A PhD study by Helen Roberts of the University of Otago tracked listed company pay rates from 1997 and 2002 found average CEO pay grew from 11.8 times the national worker average to 15.2 times over the period, in real terms.

Clearly the issue was not as marked in this country, but the trend was there nonetheless.

I just wanted to emphasise the US gap mentioned there as the article is about New Zealand -

it says, In America the divergence has become extreme. According to one US study by Mercer for the Wall St Journal, the ratio of average CEO pay to average worker pay was 24 to 1 in 1965, 71 to 1 in 1989, and 262 to 1 in 2005.

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Monday, October 17, 2011 2:04 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)

Quote:
Originally posted by AURaptor:
Quote:
Originally posted by SignyM:
Of course it is.

"Trickle down" is performing exactly as intended.

And that's what Britain gets for electing a conservative government: the banks get to gamble and the taxpayer gets to pick up the pieces.

Actually, a rising tide lifts all boats. The slow economy, with so many out of work, lowers the tide. As for trying to blame the conservative govt for this, nonsense. It's the logical conclusion of decades of socialist, entitlement spending. You've programmed a society to rely on the central govt as their source for everything, and crushed the individual spirit. And THAT's what you get with socialist systems.

" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

So your contention is that SOCIALISM results in CEOs making 200, 300, or 400 times as much as workers?

Interesting. With such beliefs, I'm honestly surprised you're not a socialist.

By the way, your "rising tide" analogy is broken. CEO pay has skyrocketed in the last couple decades, while the real wages of workers has stagnated.

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Monday, October 17, 2011 9:19 AM