Senate Income Inequality in the U.S.: Causes, Effects, Solutions

So people don't go to New York City to watch the Yankees or the Rangers, but they do go to see a show on Broadway?

Yes, really. Obviously a city cannot sustain itself solely on a sports team; I never even came close to making that. I'm simply saying that they do generate money for the city. New York City probably isn't your best city to use an example for your point, by the way. Living in Pittsburgh, I can attest to the fact that a home game for the Steelers means sold out hotels, packed restaurants, filled bars, etc. And simply because you didn't go to NYC to watch a game in 2010 doesn't mean no one else did; I'm sure someone came into town to watch a Yankees game. I traveled to Cleveland, Philadelphia, and Columbus this year solely to see sporting events.

 

I agree that they're grossly overpaid, but it seems to me your highlighting the income disparity with movie stars to highlight the hypocrisy of the left. There's a huge income gap with celebrities, and I think it's a problem, but they're a fraction of the 1%.

And, as I said, I think we have no right to complain about entertainers because their income comes from our leisure spending. Using the example previously, to most people it seems a more gross injustice that we pay and scrounge for the ever rising cost of gasoline so oil executive can walk away with billions in profits, whereas we cannot really get by a normal life without driving. As for athletes and movie stars, we spend our disposable income to be entertained by them; Jeter makes millions because we're willing to use our extra money to pay a very high fee to watch and see him play. His salary is based, more or less, on our voluntary contributions; he's worth as much as we want him to be worth.

I also understand that many CEO's don't make the salary that is a thousands of times that of the average employee. The problem here is that, however, many have seen their compensation skyrocket while the average employee's salary has stagnated for decades. The rich are getting richer, and the poor are staying the same. This isn't about whether liberals blame entertainers too; it's about average Americans struggling to get by and seeing their standard of living not change for decades, while the CEO of a company makes more in a month than many will in a lifetime.

Also, I would argue they employ people. A good sports teams generates millions of dollars and utility for a city - a successful and beloved sports teams can generate a ton of revenue for a city (fully booked hotels and restaurants, packed bars, shirts and towels sold on the street, parking, etc).

 

Professional athletes and movie stars are employees who make a lot of money. My issue - and I suspect the issue of most of the 99% movement - isn't that people shouldn't be able to make obscene amounts of money. It's that a person shouldn't make obscene amounts of money at the expense of the overall company and its customers, and tax-paying citizens who had nothing to do with the situation.

When a bank is requesting government assistance and then giving out tens of millions of dollars in bonuses to the people responsible for the bank needing government assistance, that's where the anger comes in. Comparing athletes to the Wall Street bankers and CEOs is apples to oranges. It's a closer comparison to look at sports owners. Say that an owner paid all his players the absolute league minimum, extensive profits were pocketed by the owner and executives, and then they went to the government for a handout after a bad season.

 

I think the "complaint" as stated above is not the dollar figure, per se, but that the standard of living has gone up substantially for CEO's and stagnated for most Americans. If we all rose and fell together, that would be one thing.

I also call "foul" on CEO's who run a company into the ground, pink-slip employees, and then walk away with huge amounts of money. If you have to reward CEO's, reward them for success, not failure.

 

Well then 2 things here.

My original post was made in response to Shinjo who said that the movement's concern was that CEO's made obscene amounts of money while the average's workers salary remained stagnant in comparison. In that sense, that disparity is no more evident than the sports/entertainment industries. The problem is one of perception. I think we both know that most CEO's don't make anywhere near "obscene amounts," nor is it at the expense of the company. Bernie Madoff is the exception, not the rule. But for some reason, even you're lumping everyone together. Again, I'd wager that most CEO's (except for the largest companies) probably earn something in the $300-900 thousand range, which would most certainly fit within the claim of "They should - they worked for it, took the risk, and are talented enough they deserve just compensation. When people complain about "income inequality" it isn't that the CEO makes more than them, it's that their wages have been stagnant since the '70s while the CEO's compensation has skyrocketed."

Shinjo highlighted the hypocrisy that I was highlighting as well. Angelina Jolie makes obscene amounts of money because the public loves her (or loves to hate her as the case may be..) so they ignore it. But the disparity, if that is the focus, is still just as real. Some faceless CEO is much more likely to be demonized. So why does the Occupy movement picket the head of Bank of America but not Matt Damon? The goal should apply to both. My larger point is who cares? Worth shouldn't be tied to money. So if Angelina Jolie, or the CEO of Facebook, or whoever makes millions of dollars, good for them.

Next- When a bank is requesting government assistance and then giving out tens of millions of dollars in bonuses to the people responsible for the bank needing government assistance, that's where the anger comes in.

Your second point only comes into play if government bailouts for banks occurred as a matter of routine, or if it was a yearly rite of passage. So large financial institutions were bailed out in a round of government support. It's done. It makes no sense to protest a program that was carried out two years ago, because what's the goal? What's the remedy? Besides, not all banks gave out "tens of millions of dollars in bonuses.." Some did. But again, you seem to be falling into this trap where you're painting all with the same brush. Go protest Lehman Brothers, or what's left of it. But it makes no sense for protesters to blockade something like the Oakland headquarters of Citibank, because Citibank has paid back its government bailout in full with interest.

 

Just to look at actors/actresses....numbers from here, and through an inflation calculator

In 1970, Julie Andrews was paid 1.1 million for a movie, which adjusts to 6.1 million in 2010. John Wayne was making something over 4 million a movie in the 1960s when adjusted for inflation. Clint Eastwood made an equivalent of 6.2 million for a movie in 1968.

Contrasting, more recently, Tom Hanks and Johnny Depp have gotten over 50 million for single movies, and over 10 million seems quite common. Although a more detailed analysis would probably need to determine hours/days worked for this and be a bit more statistical, and also I'd think it's worth looking how much someone working on the shoot gets.

 

Yeah, it seems to me that the OWS have no problem with people that have money--just that these bankers asked for billions, then they gave it to their upper-most management who put them in a hole in the first place. Also, I don't think Matt Damon gets free billions from the government because, hey, why not? And if you come back with, 'lol they do not!' Actually...yeah, it's been reported on how these banks get billions from the government and never have to pay it back or if they do they only pay a fraction of what they took.

 

I'd agree with Low and 44 on this. The consequences of actors like Tom Hanks or Johnny Depp who share directly in the box office revenue of movies is to hollow out the profession's middle class. The money for the top .01% in the entertainment industry has to come from somewhere. And it's largely come out of the wages of the rank and file.

It's directly analogous to what Wall Street and the growth of the financial sector relative to the economy has done to the nation's middle class as a whole.

On the other hand, a lot of these top celebrities are democrats and may support in theory at least a more progressive tax structure that would have a direct impact on them. And at least a few of the top celebrities have sided with the SAG union's middle class on revenue-sharing issues.

 

Of course "most" CEO's don't make "obscene amounts" but the OSW movement is targeting those at hedge funds, banks, and Fortune 500s. Not your small business owner of a hometown recycling company.

I'll comment more later.

 

Because (to use your example) Matt Damon didn?t make a movie that he knew was a stinker, and when said movie bombed so badly that it threatened to ruin Hollywood, with ripple effects that could?ve possibly taken down Bollywood and the BBC with it, Damon didn?t then go to Governor Schwarzenegger (or Brown, or Davis) or the California legislature for a handout to prop up LivePlanet (Damon?s production company). Matt Damon didn?t then pocket millions of dollars of said money himself, nor did he then lobby against laws to make it harder for him to do it all again whenever he felt like it. At least, that?s my theory

But again Merk, that wasn't the original claim being levied. But even using your own take on the matter, I don't think the division is as defined as you're making it out as. We don't know what Damon's production company does or doesn't receive in this regard. Now, I think its silly to react against an unknown, but I also think it's easier from a perception standpoint for you to accept if Damon did, because well, he's lovable Matt Damon, not an evil CEO. (regardless of if the CEO is actually evil or not, or if Damon is the most shrewd businessman in the entire country and is actually not so lovable during negotiations)

For example, the City of Chicago gave Warner Brothers a tax rebate to film The Dark Night in Chicago. If Chicago offered 100 million dollars in tax incentives, and 70 million dollars of that ended up going to pay the salaries of just 3 actors, then in essence, the tax payers did give out handouts. Christian Bale alone was paid 38 million dollars to play Batman in that movie. I'm sure it's more complicated, but the tax payers of Chicago basically wrote Christian Bale a check for 38 million dollars. Isn't that exactly what you're talking about? At least Jabba understands the larger picture, because the fact is if Bale got millions of dollars, it means that the production company probably hired less studio workers. Instead of hiring 15 carpenters, they probably only hired 10. That sort of thing. Doesn't that serve to increase the disparity you're trying to highlight? However, you still seem to offer excuses to one system over the other.

If everyone seems to agree that it's not merely the point of any one individual being paid lots of money, I still don't understand how one segment can be so demonized, and the other so justified. All the evidence thus far seems to point to celebrities being the worst offenders of them all, at least under the umbrella of what your concern seems to be. (There may be others)

The only thing I would disagree with Jabba over is his assessment of how Hollywood stars seem to be working against self interests. I would agree that generally, those in business want as little regulation as possible, while "Hollywood" seems to support larger regulations. I don't have a problem with his observation here. But I think such famous personalities have more portability here. I'd imagine that Tom Hanks would have no problem voting a 3% tax increase for his income level, because he can just turn around and ask for 35 million instead of 30 million, to ensure that his "take home" is the same. The CEO's of uber-large corporations would have the same ability, so again, the squeeze would be pushed down to the mid-level people who don't have this luxury, so I think it does seem to be self serving in the long run.

 

Because they don't have Tourism and all that jazz that will give them more money then the sports teams. Because you know people don't go to Nashville because it's the home of country music and they don't go to Memphis because it's the home of Elvis and really good BBQ. No no they don't do that at all.

Walt Disney World Resort puts more money into Orlando and perhaps the state of Florida then any sports teams. I enjoy sports I really do. But they are not bring in the kind of revenue people think it does. Detroit has found that out the hard way. They brought in the Superbowl, The Final Four, and WrestleMania 23 and what did that do? That's right nothing. There are three major sports teams down there. What does it really do for the city revenue wise? Nothing because once it's over people leave the city there is nothing and I mean NOTHING to do in the city. You don't have shops you have ever few places to eat down there and parking is not that good.

So you want to talk about revenue for a city. What will keep people going back to those places when the sports teams are not playing? The amount of revenue they bring in is not as much as you think. Sure the Superbowl is a big thing and brings in a lot of money. But you do you real think a place like Miami does not have a lot of other reasons for people to go there?

Sports in general have not really been the big money train until at lest the 80s and 90s and even then they only bring in so much money to any area that if they don't have something else to bring people to the city it will look a lot like Detroit. Just look at Las Vegas no major sports teams yet millions and millions of people go there each year.

You have to look at all the cities and see what real drivers them and what really brings in the revenue for many of them it's Tourism.

 

You're arguing against a fake proposition. No one said that sports teams solely keep a city alive, or a city cannot survive without a sports team. Obviously Vegas doesn't need a sports team, and obviously the Lions cannot save Detroit by themselves. A city cannot sustain itself on their football franchise, obviously, and no one is claiming that. We're just pointing out that it is a good thing for a city to have and yes, it does bring people into the city. I myself have visited a city for the sole purpose of seeing a game there.

 

I don't think anyone is justifying it. I still think it's wrong, as I would assume most others do. However, they don't get attacked because they didn't gamble away pensions and mortgages to the point of bringing the economy to the brink of depression, then receive billions in bailouts from the government to ensure our economy could stabilize, and then instead of investing those funds in new businesses and relief for consumers, they gave themselves billions in handouts and continued the same unregulated policies. They're still raising debit card fees and interest rates on student loans and not providing relief for mortgages.

Crying foul over liberals not attacking entertainers in the inequality argument is trying to find a scapegoat. Yes, it is a gross picture of income inequality and is an example of the problem we face, but the outrage over CEO's and banks is because of their practices and treatment of employees while they walk away with outrageous sums, not simply because they "make a lot".

I think it's an example, but I don't see why you're so overly concerned with it, other than it's a bit hypocritical of some liberals, yes. Now, can we end this conversation?

 

But you're missing my point then, which is only marginally that "liberals aren't attacking Hollywood." My problem is the you guys seem to be making blanket statements, and then basing criticism on the blanket itself. Above, Merk used the example of how "Matt Damon's production company doesn't get tax money..." but he doesn't know that for sure. Again, if a movie production gets 100 million dollars in tax rebates, and half of that goes to the salaries of just 3 actors, then that's exactly what you're talking about. On the opposite side of the coin, I also provided the example of Citibank, which did receive government money, but has already paid it back with interest. Based on the parameters of this topic, which example is "better?" But you're trying to justify one and condemn the other. Beyond that, are you trying to say that every single CEO in the US took handouts and made large bonuses just as they abused their workers simply because they are CEO's? That's crazy. There are CEO's or bank loan officers all across the country who provide jobs, invest in technology, take risks, and yes, are rewarded with a great salary as a result.

In a nutshell, who are "they?" On one hand you're willing to overlook a group who is the worst potential contributors to income inequality, well, I guess because they're charismatic. On the other hand, you're willing to demonize an entirely different group simply because they're not. You are not providing a distinction between those who are positive, and those who are negative, no matter which category they come from. That makes no sense if the goal is to actually change anything, and not just sit in a park for 3 weeks and whine and moan and go smash windows.

 

I've repeatedly said that we're not talking about every single CEO. There are thousands of CEOs of businesses of all sizes. We're referring to those the corrupt ones that helped contribute to the financial crisis, but walked away unscathed received government money and used it for bonuses and handouts, refuse to improve the working condition and wages of their workers (Wal-Mart).

I've also said that yes, entertainers are a part of the problem. I also pointed out that people overlook them because they willingly contribute to their income by paying $10 to see a movie because of Matt Damon or $150 to see their favorite band or team play, whereas the CEOs of oil and gas and financial companies raise rates on necessities such as gas and student loans or the CEOs of large labor companies (Wal-Mart) block their workers from unionizing and pay them as little as possible, and walk away with billions.

Not one us has said that they shouldn't make large sums of money, as long as they are successful and do their job right. I'm starting to think that many of the conservatives are on this board are arguing against users that I cannot find. I've repeatedly said we aren't referring to every CEO of every business, and yet we still get accused of it. Then there's the other person claiming that I said a sports team can keep alive an entire city with little else, meanwhile making outrageous claims like no one goes to NYC to see a sports game, but Broadway brings in all kinds of money. Although I shouldn't expect better, I guess, when Cain and Perry are two of your best hopes for the presidency. Good luck with that one.

 

Actors are no where even close to being the worst contributors to income inequality. That's asinine. The ten highest paid actors from July 2009 through June 2010 combined to earn $349 million. Even if you want to believe they earned double that in the year July 2010 to June 2011, that's a far cry from the $20+ billion the top ten hedge fund managers earned in 2010.

 

Not one us has said that they shouldn't make large sums of money, as long as they are successful and do their job right. I'm starting to think that many of the conservatives are on this board are arguing against users that I cannot find. I've repeatedly said we aren't referring to every CEO of every business, and yet we still get accused of it.

If you think this, it's only because you keep contradicting yourself. Earlier in the thread, you made an observation along the lines of "The CEO of WalMart makes the equivalent of $25,000 an hour, while not helping WalMart's workers." This leads anyone to believe that it is total compensation related to disparity that you're concerned with. However, when this claim, your own claim, is mentioned, you modify it and respond with "no, it's not just making money, it's only the corrupt people who do so..." I suppose to eliminate confusion, you should explain what you mean by "corrupt methods of earnings." Because without it, I do fail to understand how the CEO of Walmart earns X dollars, and you say that's corrupt, but Matt Damon earns X dollars and it's good.. because neither one is giving millions of dollars back to the average person. If you just looked at the two in the same manner, I would at least understand the blanket concern. But you keep trying to excuse one while demonizing the other. For another example, in the very post under yours, this is what NYJ had to say on the matter:

"Actors are no where even close to being the worst contributors to income inequality. That's asinine. The ten highest paid actors from July 2009 through June 2010 combined to earn $349 million. Even if you want to believe they earned double that in the year July 2010 to June 2011, that's a far cry from the $20+ billion the top ten hedge fund managers earned in 2010.

Which again, is another example of a user here, on the boards, who seems to be concerned with nothing but total compensation. There's no distinction between "corrupt" methods of earning and simply being successful. His focus seems to be on the total amount. The only distinction NYJ made in his post is to excuse celebrities, and to even go so far as to say the mere suggestion that they are the worst is "asinine," which is a pretty strong statement. I look at NYJ's post and think "so, $349 million is fine, but anything above that is not?" Why? I don't see the arbitrary line. But I think the real issue is method of earning. Instead of truly looking at methods and consequences of disparity, the celebrities in NYJ's post could have earned 5 billion dollars and it still would be excused, because CEO's and bankers are the only people who earn blood money. The thread is full of posts like that, so if you can't find people who are making this argument, just review the thread, because they're right here.

 

I never excused celebrity compensation as right. I was pointing out that they are in no way the worst contributors to inequality, as you claimed. That statement was ridiculous.

 

No, but you simply looked at total compensation, which Shinjo just got finished posting that no one was trying to focus on.

And besides, so what? Why does it matter to you to draw such an artificial line? So the top celebrities earned 349 million dollars for a year period....Does this justification help or hurt your point as it relates to this topic? You certainly didn't differentiate between any categories. So, if there is a hedge fund manager who researched the market, carefully chose his investments, and saw his managed fund grow as a result, everyone is saying that they would have no problem with him reaping the rewards of his hard work-no different than professional athletes, celebrities, etc... But clearly this is not accurate, because your post seems to suggest that this wouldn't be accepted. Christian Bale could earn 38 million for Dark Knight, regardless of tax subsidies, and it's good for him! I certainly don't see any calls to stop going to the movies until actor compensation goes down to a more equable level, or protests at movie theaters and/or studios. However, the CEO for Pepsi could earn 38 million dollars, and it's Boo! Down with capitalism, and he's ignoring the little guy...and all sorts of protests in front of businesses, and calls to take money out of banks, and I suppose store the excess cash in false bottoms of bongo drums.

 

You're still posting irrelevant things. My sole point was that finance people contribute way more to inequality than celebrities, which is contrary to what you claimed. I made zero judgments in my post on the morality of that distribution or inequality in general.

 

You're still posting irrelevant things.

In what way? To quote the wise philosopher Inigo Montoya- "You keep using that word. I do not think it means what you think it means." It might not be relevant to you, but it was a direct response to a post just above yours.

My sole point was that finance people contribute way more to inequality than celebrities, which is contrary to what you claimed. I made zero judgments in my post on the morality of that distribution or inequality in general.

Great. And again, so what? It's not contrary, it's arbitrary. If that was "your sole point," why is it so important to you to differentiate between a group that made 349 million, and another group who made similar amounts, if the entire point is to highlight income disparity? There may be individuals from either category who made more than individuals from the other, and vice versa. You really have no other point to make with your observation? The distinction alone is a judgement in itself, as you guys are the ones you keep trying to excuse one group over the other. So far, the reason why has been danced around.