Wednesday, July 18, 2012

Study: Income Inequality “is the result of various laissez-faire policies”

Most Americans have heard the term “trickle-down” economics but few have heard of “horse and sparrow” economics. They’re the exact same thing only different names. They called it horse and sparrow for a very indelicate reason…the theory being – if you feed the horse enough oats, some will pass through to the road for the sparrows. Seriously. Well – kids…you’re the sparrows; why do you think they changed the name to “trickle down”? ”Horse and sparrow” started in the late 1800′s…about 35 years before the Great Depression – sound familiar?

The “trickle-down” theory: The principle that the poor, who must subsist on table scraps dropped by the rich, can best be served by giving the rich bigger meals.

~William Blum

Wage inequality at the bottom—called the “50/10 wage gap” because it reflects wage differences between the median and bottom 10 percent—has primarily been driven by periods of high unemployment and the erosion of the minimum wage. The continuing growth of the wage gap between high and middle earners is the result of various laissez-faire policies (acts of omission as well as commission) including globalization, deregulation, privatization, eroded unionization, and weakened labor standards. The gap between the very highest earners—the top 1 percent—and all other earners, including other high earners, reflects the escalation of CEO and other managers’ compensation and the growth of compensation in the financial sector.The Economic Policy Institute does the math:

Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt. It is hard to see how reestablishing a link between productivity and pay can occur without restoring decent and improved labor standards, restoring the minimum wage to a level corresponding to half the average wage (as it was in the late 1960s), and making real the ability of workers to obtain and practice collective bargaining.

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