At 22:11 12/03/2013, MG wrote:
Keith,
You keep writing as though these are immutable acts of god or the hidden
hand or whatever
(KH) I don't know what you mean by "these" so I can't answer, I'm afraid
(MG) In fact, income distribution is largely a product of policy choices
made or not made
You find significantly different income curves in other
countries where the taxation laws are different or where there is a
specific intervention in support of equalization of income for example.
(KH) Once again, unless you're more specific I can't answer to these charges.
(MG) The size of the pie may be frozen (or not) but how the pie is
distributed is a basic set of political choices.
(KH) But how visibly it is distributed is a great deal different from how
it is actually distributed. What I call the 20-class has been subsidised
enormously in the UK in the past century by taxation that was designed so
that coaches and horses could be driven through it by the more savvy or the
rich. Also, what about the international mafia and hard drugs? That trade
is never formally incorporated in income distribiution, even though it is
supposed to be as sizeable as food trade. Then there are huge
multi-operational black markets in many countries.
(KH) To return to your "hidden hand" , something I'm constantly chastised
for believing in, well I'd better pronounce myself a Keynesian.
Not long before he died, after a Directors' meeting at the Bank of England,
Keynes said to Henry Clay, a fellow Director, words to the effect that he
relied on Adam Smith's "invisible hand" to get Britain out of the mess it
was in, and went on: "I find myself more and more relying for a solution of
our problems on the invisible hand which I tried to eject from economic
thinking twenty years ago." Henry Clay quoted these words in a letter to
Montague Norman, the Governor of the BoE.
I was briefly a Keynesian when in my 20s and not reading economics. It was
fashionable in the 1960s and '70s. It was only when I tried to read and
understand his General Theory and found him contradicting himself that I
realised that, genius though he might have been to his contemporaries,
Keynes could never have experienced the sort of word-of-mouth assessments
that make up such a lot of economic decisions among both consumer and
producers. Keynes himself was always wanting to dominate others in whatever
circumstances he found himself. He didn't have friends in any sort of peer
network. He had no time for socialism, even as a young man.
Keith
From: [email protected]
[mailto:[email protected]] On Behalf Of Keith Hudson
Sent: Tuesday, March 12, 2013 2:05 PM
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION; Arthur Cordell
Subject: Re: [Futurework] In Silicon Valley, rich getting richer and poor
getting poorer
The key paragraph in Martha Mendoza's article, I thought, was this:
"The fact is that we have an economy now that's working well only for
those at the very top," said Lawrence Mishel at the Economic Policy
Institute in Washington D.C. "Unless we adopt a new approach to economic
policy, we're going to continue going down this path, which means growth
that does not really benefit the great majority of people in this country."
But the majority of Americans have been on an income decline for the past
20 years. This will be due to the continuing simplification of jobs by
computers as well as direct redundancy due to automation. How can there be
economic growth in the future? It needs either an expanding number of
consumers or increasing amounts of discretionary cash (real, not inflated)
in consumers' pockets. We're not going to either. There are no more
significant consumer goods in the R&D departments of the manufacturing
corporations to act as incentives in the same way that the printed cotton
dress, the mackintosh, the Sunday-best suit, the camera, the radio, the
terrace house, the television, the car did during the last 200 years.
Keith
At 14:10 12/03/2013, AC wrote:
In Silicon Valley, rich getting richer and poor getting poorer
* by Martha Mendoza
http://msnbcmedia4.msn.com/j/streams/2013/March/130311/1C640266
Martha Mendoza , The Associated Press
On a morning the stock market was sailing to a record high and a chilly
storm was blowing into Silicon Valley, Wendy Carle stuck her head out of
the tent she calls home to find city workers duct taping an eviction
notice to her flimsy, flapping shelter walls.
"I have no idea where I'm going to go," she said, tugging on her black
sweatshirt over her brown curls and scooping up Hero, an albino dog.
She glanced at the glimmering windows on a cluster of high-tech office
buildings just blocks away and shook her head.
"Did you know Google shares hit $840 each this morning?" she asked. "I
just heard that on the radio."
Carle, who did not want to give her age, used to manage apartments. Today
she lives on a Supplemental Security Income disability payment of $826 a
month due to back and joint problems.
The Silicon Valley is adding jobs faster than it has in more than a decade
as the tech industry roars back. Stocks are soaring and fortunes are once
again on the rise.
But a bleaker record is also being set this year: Food stamp participation
just hit a 10-year high, homelessness rose 20 percent in two years, and
the average income for Hispanics, who make up one in four Silicon Valley
residents, fell to a new low of about $19,000 a year capping a steady 14
percent drop over the past five years, according to the annual Silicon
Valley Index released by Joint Venture Silicon Valley, representing
businesses, and the philanthropic Silicon Valley Community Foundation.
Simply put, while the ultra-rich are getting even richer, record numbers
of Silicon Valley residents are slipping into poverty.
"In the midst of a national economic recovery led by Silicon Valley's
resurgence, as measured by corporate profits and record stock prices,
something strange is going on in the Valley itself. Most people are
getting poorer," said Cindy Chavez, executive director of San Jose-based
Working Partnerships USA, a nonprofit advocating for affordable housing,
higher minimum wages and access to health care.
Nowhere is this growing disparity more obvious than this sprawling and
trash-strewn 28-acre tent city that authorities are trying to clean out.
Beneath the sweeping shadow and roar of jets soaring in and out of nearby
San Jose's international airport, residents here say times are so tight
they have nowhere else to turn.
"This is the most ridiculous place ever," said Kristina Erbenich, 38,
clambering onto her bike, a heavy pack on her back. The former chef said
she spent $14,000 on hotel rooms before her savings ran out. "If everyone
around here is so rich, why can't they do something to help?"
United Way Silicon Valley CEO Carole Leigh Hutton wonders the same thing.
"How is it that in an area so very rich, we have so many people so very
poor? Why can't we break that cycle? With all the brain power in the
Silicon Valley, we should be able to solve these problems. But what we
need is the collective will."
High cost of living
The causes for the growing disparity are complex, but largely come down to
one thing: a very high cost of living. The median home price is $550,000,
and rents average just under $2,000 a month for a two-bedroom apartment in
this region that is home to many of the nation's wealthiest companies
including Facebook, Apple Inc., Hewlett-Packard Co. and Google. For a
family of four, just covering basic needs like rent, food, child care and
transportation comes to almost $90,000 a year, according to the nonprofit
Insight Center for Community Economic Development.
"The fact is that we have an economy now that's working well only for
those at the very top," said Lawrence Mishel at the Economic Policy
Institute in Washington D.C. "Unless we adopt a new approach to economic
policy, we're going to continue going down this path, which means growth
that does not really benefit the great majority of people in this country."
Nationally, Mishel says the declining value of the federal minimum wage is
a major factor driving inequality. On Monday, in an effort to address
this, minimum hourly wages will rise from $8 per hour to a new minimum of
$10 per hour, the nation's largest minimum wage increase approved by
voters last fall. While it's a dramatic shift for tens of thousands of
workers, it's a minuscule fraction of the increases top earners in the
region enjoyed last year.
Silicon Valley's top tech magnates inched up on Forbes' annual list of the
richest people on the planet: Oracle Corp. CEO Larry Ellison had a
reported net worth of $43 billion, Google co-founders Larry Page and
Sergey Brin had about $23 billion each, Facebook CEO Mark Zuckerberg, was
worth an estimated $13.3 billion, and Laurene Powell Jobs, widow of Apple
Inc. co-founder Steve Jobs, had an estimated worth of $10.7 billion.
"The wealth numbers are staggering, they are absolutely staggering," said
Alf Nucifora, who chairs the Luxury Marketing Council of San Francisco
One in five ultra-wealthy Americans, defined by having a net worth above
$30 million, lives in California, stoked by the "wealth-generating
cluster" of the Silicon Valley, according to WealthX, a company that
tracks the super-rich. Stanford University, in Palo Alto, boasts 1,173
alumni with a net worth of more than $30 million only Harvard University
and the University of Pennsylvania have more.
"The Silicon Valley is an ecosystem of human capital, venture capital,
risk, an educational infrastructure," says WealthX president David
Friedman. "All of those things combine into this glorious cocktail of
prosperity."
'We need help'
But many residents, even those with college educations, are finding it
tougher than ever to make it in the Silicon Valley.
Before the Great Recession, about 10 percent of people seeking food had at
least some college education. Today, one in four who line up at food
pantries for bags of free food have been to college. Last year the share
of households in Silicon Valley earning less than $35,000 rose two
percentage points to 20 percent, according to the 2013 Silicon Valley Index.
"There are millionaires, even billionaires, who sit in their sunrooms
watching me work in their gardens and they have no clue what's going on,"
said Sherri Bohan, a credentialed horticulturist who ran a landscape
gardening firm for 30 years and raised two sons as a single mom. Today,
retired and disabled, she picks up a free bag of groceries every week at
her local food bank. Without the food, she says she would go hungry.
Silicon Valley's rich do give, and often significantly, but the money
mostly leaves the area. Facebook's Zuckerberg gave $100 million to Newark
N.J., public schools in 2010; his $500 million gift to the Silicon Valley
Community Foundation last year has yet to be designated. The Google
Foundation donated about $11 million in 2011, according to its tax forms,
largely to global environmental and health projects.
"Many people come here to work, but they have no idea what's really going
on," said Lisa Sobrato Sonsini, whose Sobrato Family Foundation funded
by profits gained as a leading real estate and development firm in the
region is the single largest contributor to local charities in the
region. "The companies are generous, but they don't see the need directly
in front of them, they want to send their money away."
Phyllis Kizer, a long time high-tech business analyst, is disturbed by the
challenges people in her community face.
"Looking at myself, I'm very well paid for what I do, I have no
complaints," she said.
Once a week, Kizer heads to a low-income school where she sits with
children, including recent immigrants, helping them learn to read.
"I love books, and I love teaching," she said. "I wanted to pass that on.
Some of these children, they can really go far, but we need to help."
References
*
<http://www.readability.com/articles/q8zlaozr#rdb-footnote-link-1>^<http://inplainsight.nbcnews.com/>Related:
In Plain Sight: Poverty in America (inplainsight.nbcnews.com:80) (
<http://inplainsight.nbcnews.com/>http://inplainsight.nbcnews.com/ )
Original URL:
<http://www.nbcnews.com/business/silicon-valley-rich-getting-richer-poor-getting-poorer-1C8813698>http://www.nbcnews.com/business/silicon-valley-rich-getting-richer-poor-getting-poorer-1C8813698
_______________________________________________
Futurework mailing list
<mailto:[email protected]>[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
