Income inequality…in my own life

Income inequality, though always with us, is certainly in the media more these days, thanks to the Occupy Wall Street movement and the focus on the 1% vs. the 99%. Social movements tend to need neat dividing lines, though I am not so sure what a household earning $350,000 per year (putting you in like the 97-98%) has in common with someone who is truly destitute.

What I do find interesting, as I’ve been trying to think broadly about issues of money, is what the market rewards and does not. I’ve been quite aware of this in my own life, in the different jobs I’ve held over the years.

For instance, when I was 17, I spent a summer working in Fazoli’s Italian restaurant, a fast food chain. I earned $4.90/hour which, at the time, was just above minimum wage. We often got a store-wide bonus of $.50/hour for scoring well on different quality metrics. I’ve written elsewhere of some of the wretched things that encouraged, but that is a different matter. So I was earning $5.40/hour, and worked about 30 hours/week all summer. I probably took home $1250 for long, stressful days of standing on my feet and splashing myself with garlic to the point where I reeked so badly that anyone sharing a car with me on the way home had to open the window.

Now, consider this: the reason the ebook I’m working on is called “What the Most Successful People Do Before Breakfast” is that a blog post I wrote in May for BNET with that title seems to keep luring people to click on it. I don’t know what about that formula is pure reader bait, but it is. Since I keep getting paid by the click, I now know that that one blog post — which literally took me less than an hour to write — has garnered me multiple times what I earned in an entire summer of smelling like garlic.

So what are we to make of this? On one hand, this seems atrociously unfair, that someone can earn more with an hour’s labor than it takes someone else an entire summer to earn. On the other hand, in this example, the someone else is the same person. Over time, this same individual is able to move into work that the market rewards more.

I tend to think that an ideal society would tolerate inequality but offer lots of opportunity. You work crappy jobs when you’re young and unskilled but have a clear path to earning more by learning different skills. Do we have that society now? The answer people give probably determines more of their politics than any other question you could ask.


11 thoughts on “Income inequality…in my own life

  1. I think your last paragraph hits the nail on the head regarding the Occupy movement. I read a blog post recently complaining about how people are so entitled and expect good jobs and free money to be given to them, and the Occupy movement is a symptom of that. But there’s a difference between “give me a job, give me a handout” and “we need a society where hard work is rewarded; where it’s possible to find a job with a living wage if you are willing and able to work; where we have socioeconomic mobility that isn’t so vulnerable that any benefits you’ve worked for can disappear at any moment.”

  2. I agree with the statement that an ideal society would tolerate inequality but offer opportunity. I definitely don’t think we’re there yet. So much about a person’s future is influenced by the circumstances of their childhood, including the opportunities they’re offered and their ability to take advantage of them.

  3. This is a great example of income mobility. Thomas Sowell (economist, you’d like him, especially his book Conquests and Cultures) discusses how many people in the bottom fifth of income move up and how many in the top fifth move down.

    I doubt that most people will ever reach the 98th percentile of hourly wage, but the 50th percentile seems achievable for most of the population for at least some portion of their lives.

    My cruddy summer job was detasseling corn in 95 F weather in 95% humidity. (I think we’re both Midwest girls.) I managed to get rapidly promoted to supervisor, which garnered me another dollar an hour, but it was still the worst job I’ve held. Even editing dull, poorly written technical papers is not so bad.

  4. I could live in your ideal society. I don’t know if it would be my ideal, but it would probably be pretty close.

    But I don’t think we’re anywhere close to it. Leaving aside our continuing problems with various “-isms” (racism, sexism, etc), we can’t even talk about being close to it until we have equal schooling for all kids, and we don’t have that now. This is painfully obvious to me as I start looking at kindergartens for my oldest daughter. We’re starting the search with public schools, but we do so with the knowledge that if we don’t like what we see, we can just go private. Most kids don’t have that option (I didn’t, growing up). A lot of kids don’t have parents who know they have a choice. And the truly unfortunate have parents who just don’t care.

    School equality would mean that every kid had access to the same quality of education, regardless of income parental cluefullness, or parental engagement. Once we get that, then we can start talking about how to get the rest of the way there. Until then- we’re just deluding ourselves.

    (I will allow, though, that our current society has a fair number of second chances- I had mediocre to good K-12, but was able to go to a stellar university for college and catch up. But I don’t think the second chances are enough.)

    1. A large part of education IS parental engagement. Unfortunately, if we’re going to offer public school at all, I don’t see how we can offer the same quality of education to everyone because children are at different places when they start kindergarten, due to both environment and genetics. In some ways, I wish our society did a better job of compensating for parents, but there is a limit to what “the village” can do, due to limits of time and money.

      1. My point was that all schools should have the same quality of resources and child/teacher ratio, regardless of the income level of their neighborhood. Then, even if a kid’s parents don’t care enough to try to pick the best school for their kid, the default option will be OK. This is not anywhere close to the situation we have today. Even within my large urban district, the schools in the rich areas have better programs- because the parents give money to make up for what budget cuts have taken away.

  5. Here are a few words: Earned Income Tax Credit. We as a country — and we as working moms or professional moms — should be out there all the time talking AGAINST this!
    In the US we pay people to be POOR. Have any of you ever seen folks or known folks who get this… Here is how it goes.. if you make less than Xxxxx and have xxx kids (the more kids the bigger your credit)
    the government pays you a check at tax time. These checks are like $5000.
    In a society that otherwise has more social, educational and economic ability than most (and it is not perfect) this is a disgrace. Especially since those of us who pay taxes and create jobs or are entrepreneurial — especially those of us who are married moms and paying like 40% tax on our income — we do not get paid maternity leave or anything for our tax dollars. But folks who don’t work or who earn very little get PAID to remain in this category. How about paying them go make more money? A lot of government programs for the poor are like this. We pay fokls to be poor in this country and we do allow the very rich ample tax shelters. The entrepreneurs and folks in the middle to upper middle class are really not getting what they pay for.
    I think the back and forth on here about education is a little like –” I live in the suburbs and am a white mom and poor, poor kids.”
    I live now in avery wealthy area and the public schools are awesome. But I honestly think my kids might have a bettet shot at the Ivy League going to schools where not so many kids were like interested in it (as I did). Let’s be honest: if you teach your kids to read books rather than watch tv, you yourself are reasonable intelligent and not disabled and your kids are not disabled and you have a pretty good work ethic your chances of doing OK even if you are a minority or a woman are pretty dXmn good.Honestly I went to decent schools in a not-wealthy area and I have an Ivy League education. IT also matters what you study, and what your innate interests are. Another thing I think you can teach is frugality and gratitude. Frugality breeds happiness and also freedom to choose.

    I think the conversation here about like well I can spend 50,000 grand sending my kid to private kindergarten is missing some larger issues about our society such as the EITC!
    Also immigrants work and the country is built on immigrants and entrepreneurs… so we should start rewarding work in this country and not lack thereof. Also since motherhood is work and breastfeeding is a public health issue… it’d be nice if the “job” of mothering got something from a gov that seems to have enough money for things like hmmm. the Iraq war and oh yeah THE Earned Income Tax Credit!
    The problem with a so-called conservative argument for Small Government is that when most folks talk about small government they mean small government for working women and for the middle class..they clearly don’t mean small gov for the poor or wealthy! I’m all for small gov if it let’s me keep some more of my money in my business to hire and stops using my tax dollars to fund free daycare for single moms while I have to pay and/or taxing me to be married.

    1. Remember that the EITC is for earned income. It was begun as an alternative to straight public assistance, or dollars to people who don’t work at all. It is at most ~$5k and compensates for the social security taxes that people in this income range DO pay.

      I’m not sure that the EITC is the best mechanism to accomplish this, but remember that most working professional couples accomplish their work with the assistance of childcare workers and domestic laborers, many of whom are eligible for the EITC. I stay in hotel rooms cleaned by housekeepers who qualify, etc. Also, remember the role that IQ has in reading well, etc. IQ is a genetic inheritance. If you were to keep the same teachers and facilities in the poor and well-off schools and swap the children, I don’t think the outcomes would change much.

      Check out the book Willpower by Baumeister and Tierney. They note that positive life outcomes are influenced primarily by IQ and self control. Self control is heavily influenced by parenting and environment. IQ is not. Many of the people receiving the EITC (I know many) are less blessed than you in the IQ department.

      And by the way, my marginal tax rate as an independent contractor is 59%.

    2. And you might be surprised by who qualifies for the EITC. Less than 10 years ago, a first or second year school teacher in most districts in my state would qualify if they had even one child. They wouldn’t qualify for anywhere near the full $5000, because it does phase out as income rises…and they wouldn’t qualify for other forms of low-income assistance…but they did qualify for the EITC. These were actual teachers, not aides.

    1. If you go to the 168 Hours book link, on the right there is a header that says “manage your time.” That has the downloadable PDF and excel files of the time log template.

Leave a Reply

Your email address will not be published. Required fields are marked *