Taking what you don't need...

[samclem]

Khufu, you're not getting my point (and it was a minor one). When someone says "income went to" instead of "income was earned by" it's a window into their world view.

I thought it interesting to hear people talk about their grades.
"Ms Jones gave me an "F" in English Lit"
"I got a "C" in Trig."
"I earned an "A" in Algebra"

I never heard "I earned an "F"". It's all about how we see the world, who we see as responsible for how things turn out--"them", "fate," "me" ?

I don't dispute that the share of total income represented by the top 1% of tax returns has increased from 2009 to 2010. But I also do not grant that these are the same individuals year to year ("the 1%") and that they didn't "earn" the money (through labor or putting their capital at risk in productive ways).

 

[Gatordoc50]

You didn't write that.

If Warren had said "I think other rich people like me should pay more money to the government, as I am doing with this $10 billion voluntary payment to the Treasury", then he'd have some moral authority and his thoughts on the subject would be especially weighty. But when says that he and others should pay more to the government, but then instead finds a better use for his own money (including philanthropy)--well he becomes just another of the fashionable and growing number of people buying admiration with other people's money. Warren--we're all making the same choice you are. Get off your high horse.

It sure makes you wonder. I also find it insulting and dangerous that a handful of Gates friends will decide who benefits from all this wealth.

 

[RunningBum]

It sure makes you wonder. I also find it insulting and dangerous that a handful of Gates friends will decide who benefits from all this wealth.

I don't get the insulting part. They could keep it in their own families, or build shrines to themselves. It's their money.

Dangerous? Sure, it could be. But I'm pretty impressed at some of the things the Gates Foundation is doing.

As far as Buffet and SS, he makes the point that I would about the original post. I'm not going to be the only one (or few) who turns down SS. It wouldn't make a bit of difference. With Buffet's money, it would make a slight difference, but I don't think he's saying that just to look good. What I'm hearing is that he is telling lawmakers that he would back taxing the rich more.

Someone, maybe it was the OP, said that people were getting judgmental about why others need SS and other help as part of their reason for not giving up their own benefit. At least I think that was their point. I would argue that many of us do this for charities as well. Even if the charity is doing good with the money, why do they need more money? Are they careless with it? Are the execs getting too much of it? How much is really going to the real charitable purpose? We have the right to make the same judgment on SS money we turn down. Which I have no intention of doing, btw.

 

[Gatordoc50]

I don't get the insulting part. They could keep it in their own families, or build shrines to themselves. It's their money.

Dangerous? Sure, it could be. But I'm pretty impressed at some of the things the Gates Foundation is doing.

As far as Buffet and SS, he makes the point that I would about the original post. I'm not going to be the only one (or few) who turns down SS. It wouldn't make a bit of difference. With Buffet's money, it would make a slight difference, but I don't think he's saying that just to look good. What I'm hearing is that he is telling lawmakers that he would back taxing the rich more.

Someone, maybe it was the OP, said that people were getting judgmental about why others need SS and other help as part of their reason for not giving up their own benefit. At least I think that was their point. I would argue that many of us do this for charities as well. Even if the charity is doing good with the money, why do they need more money? Are they careless with it? Are the execs getting too much of it? How much is really going to the real charitable purpose? We have the right to make the same judgment on SS money we turn down. Which I have no intention of doing, btw.

The insulting part is that the ultra rich say "people like them" should pay more in taxes. I agree one hundred percent. But then they include "people like me" with "people like them" when the tax proposals are rolled out.

 

[BTravlin]

I will take it and have no problem doing so. I've been self employed since 1989 and therefore have paid in double all those years. If it turns out I don't really need it then I will increase my charitable donations.

 

[Shawn]

Why should Warren Buffett and I pay the same dollar amount of payroll tax each year?

Because you should pay your fair share.

If you and Warren Buffett go to the same restaurant and order the same meal, the bill will be the same. Personally, I do not believe there is anything wrong with this. With SS, if you and Warren Buffett pay the same amount each year, your payouts will be the same. You get what you pay for.

My marginal tax rate is currently about 45% (federal AMT, state, medicare, ...). My marginal tax rate would rise to 51% if the SS payroll cap was eliminated. In fact, one could argue that my marginal tax rate would be 58% due to my 7% DB pension contribution (sort of a tax since it acts like SS). I have no complaints about the DB pension or its contribution, but I would still bring home only 42% for every extra dollar I earned.

You seem to place a lot of importance on productivity. I do too. What is the impact on productivity caused by increasingly higher marginal tax rates, such as those above 50%? At least for me, I can assure you that high marginal tax rates do not motivate me to work harder. I have turned down part-time consulting and teaching jobs due to the poor return.

Interestingly enough, one of the main reasons I did not ER during a company buyout two months ago was due to the ongoing growth of my pension. I receive something tangible for my 7% DB pension contribution (e.g., my pension payout would have been $74K/yr if I retired last June, but it will be $84K/yr if I retire next February). This financial incentive motivated me to remain in the workforce and thereby add to the country's productivity. However, there is very little financial incentive from my SS contributions since I am beyond the second SS inflection point. Take away the SS income cap and it reduces my incentive even more. It will cause me to leave work at an earlier date. This will decrease productivity. Equally so, it will reduce SS contributions since there will be no contribution even from those earnings below the income cap.

 

[Bob Adams]

Why don't you give it a rest, Bob? People can decide for themselves what they think.

Ha

Okay, I'm done resting now. You're all talking about my homeboy. What in the world has Warren Buffett done to deserve the bashing? He has accomplished to a much higher degree what most of us dream about and wouldn't turn away from in a million years. What do the critical know about him to be able to criticize?

For example do you think that because you don't hear about any of the charitable activities he and his family fund, and participate in, that they don't exist? I happen to know of several Buffett programs that help children from preschool to college in incredibly meaningful, effective, and not inexpensive ways. There are literally thousands of college graduates in Nebraska, and there will be more, that have had their tuition covered by the Buffetts. Their program didn't just hand out scholarships, it mentored those students through school and made sure they graduated. You should see the success rate for the program.

I'm going to go back and rest some more now, but you all better leave my homeboy alone. If you don't, I'll be back

 

[MuirWannabe]

Okay, I'm done resting now. You're all talking about my homeboy. What in the world has Warren Buffett done to deserve the bashing? He has accomplished to a much higher degree what most of us dream about and wouldn't turn away from in a million years. What do the critical know about him to be able to criticize?

For example do you think that because you don't hear about any of the charitable activities he and his family fund, and participate in, that they don't exist? I happen to know of several Buffett programs that help children from preschool to college in incredibly meaningful, effective, and not inexpensive ways. There are literally thousands of college graduates in Nebraska, and there will be more, that have had their tuition covered by the Buffetts. Their program didn't just hand out scholarships, it mentored those students through school and made sure they graduated. You should see the success rate for the program.

I'm going to go back and rest some more now, but you all better leave my homeboy alone. If you don't, I'll be back

I don't think your paying enough attention between your rest breaks Bob. No criticism was leveled at Buffet's charity concerns. The criticism was around his call for others to pay more SS tax.

 

[Bob Adams]

I don't think your paying enough attention between your rest breaks Bob. No criticism was leveled at Buffet's charity concerns. The criticism was around his call for others to pay more SS tax.

Oh . . . well . . . then, I guess like Rosanna Danna used to say on SNL "never mind".

 

[Texas Proud]

Here's a different view from Dean Baker:

One of themes that recurs endlessly in news coverage is that the United States and other countries face a disastrous threat to their living standards as a result of a falling ratio of workers to retirees. This is one that can be easily dismissed with some simple arithmetic.

A falling ratio of workers to retirees means that a larger chunk of what each worker produces must be put aside to a support the retired population. (Btw, this is true regardless of whether or not we have a Social Security or Medicare system. The only issue is whether retirees are able to maintain something resembling normal living standards.) However, that does not imply that the working population must see a drop in their living standards.

Fans of arithmetic might note that the ratio of workers to retirees fell from 5 to 1 in the early sixties to 3 to 1 in the early 90s. This sharp drop in the ratio of workers to retirees did not prevent both workers and retirees from enjoying substantial improvements in living standards over this period. The reason is that productivity growth, what each workers produces in an hour of work, swamped the impact of a falling ratio of workers to retirees.

The 1.0 percent growth bar shows the impact of productivity growth assuming that going forward it is worse than at any point in the post-war era. (Even in the period of the productivity slowdown, from 1973-1995 growth was somewhat more rapid than this.) In this case the 25.7 percent increase in living standards allowed by higher productivity growth is more than three times the 7.8 percent decline resulting from a fall in the ratio of workers to retirees.

I note that in the three years following the crisis of 2008 the productivity growth of the US economy fell to about 1% per year. It's reasonable to expect it to increase as the economy recovers, but even if it did not, rising living standards would overwhelming the declining number of workers per SS beneficiary.

It's interesting to me that the people who believe SS will run out of workers never account for productivity gains. They implicitly assume that the worker of 2040 will produce the same output as the worker of 1935. If that were true living standards for both workers and retirees would never have risen above the 1935 level.

One of the problems with this math is that it is not counting the right item...

The item SS is concerned with is total number of workers that make less than the maximum that is taxable....

Let's go to an extreme... say there are only 10 people in the US who work.... and they can produce everything that is produced today... for SS, the taxes would be (about) $106K X 10 X 12.4% or $131K...

We all know that $131K will not be enough to pay all SS benefits.... productivity has increase tremendously, but the amount of money going into the SS has dwindled to almost nothing....

From this example, productivity actually HARMS the SS system... big time....

So, there has to be another reason that people have a higher standard of living.... and it is not the SS system and productivity gains...

 

[Khufu]

Khufu, you're not getting my point (and it was a minor one). When someone says "income went to" instead of "income was earned by" it's a window into their world view.

I thought it interesting to hear people talk about their grades.
"Ms Jones gave me an "F" in English Lit"
"I got a "C" in Trig."
"I earned an "A" in Algebra"

I never heard "I earned an "F"". It's all about how we see the world, who we see as responsible for how things turn out--"them", "fate," "me" ?

I don't dispute that the share of total income represented by the top 1% of tax returns has increased from 2009 to 2010. But I also do not grant that these are the same individuals year to year ("the 1%") and that they didn't "earn" the money (through labor or putting their capital at risk in productive ways).

So that's your opinion: it's a just world after all. Let's listen to what Warren B. has to say on this:

"Through the tax code, there has been class warfare waged, and my class has won," Buffett told Business Wire CEO Cathy Baron Tamraz at a luncheon in honor of the company's 50th anniversary. "It's been a rout."

The sequestration of income growth to the upper 1% or the upper 0.01% was the result of such hard work, for instance, as paying Congress to set the income tax rates for hedge fund managers at the capital gains rate. John Galt indeed.

Here are some graphs to show the growth of income inequality:

 

[samclem]

was the result of such hard work, for instance, as paying Congress to set the income tax rates for hedge fund managers at the capital gains rate.

You won't find me defending the US tax code. But, there's something for almost everyone there. I even heard that there are a lot of people who pay zero federal income tax (FIT). These people do pay some other taxes, but your comment was about the great deal the rich get regarding income taxes. Hey, the cap gains rate is still a lot higher than zero.

Income inequality: Not news. It changes over time, broaden out your time window and you'll see it. Right now the top 1% is earning about the same share of the US total as when we entered WWII. After the war, we had a labor shortage and an unprecedented positive export environment--it was great for wages (and equity returns!). And it was an historic fluke. We're done with that now. It's a global labor market, and US real wages are declining as those in less developed countries rise (a huge win for humanity, though it hurts here at home). But capital--there's a need for that, and people who have some and who do a good job of putting it to work will be rewarded with rising incomes. Nuthin wrong with that.


Share of pre-tax household income received by the top 1 percent, top 0.1 percent and top 0.01 percent, between 1917 and 2005.(Wikipedia--US Income inequality, see sources 22 and 23)

When talent, intelligence, effort, and (maybe) luck are equally spread among us, I'll expect incomes to be equal. Until then, I'll expect there to be an unequal distribution of income.

 

[NW-Bound]

Productivity increase means that we can produce more with less labor and capital. That often means workers getting shunted if there are no other growth areas that can use the labor that is now made surplus.

The other day, I read about a large newspaper in Ohio laying off 50 editorial staff. This is of course just the latest in the decline of the printed media that has been going on for years. And just yesterday, there's an article, on the Web of course, about how craiglist free ads have royally hurt the income of newspapers. To that, one can add autotrader-dot-com, rvtrader-dot-com, etc...

It is obvious that the ability for an individual to publish his own ads on the Web and with color photos to boot is great productivity enhancement, but that makes redundant so many workers in the printed media. And then, online commerce sites such as eBay also cut out many middleman merchants. What do these people now do? Not all of them can be put to work as plumbers, electricians, or automechanics, who we still need of course.

About the concentration of wealth to the top, Taleb, the author of The Black Swan, elaborated on the phenomenon of "winner takes all" in his book. In the old days, there were jobs for bandwagon entertaining tropes who visited remote places. Now, with cables, TV, and the Web, people only watch the most well-known entertainers. The top actors, actresses, singers, sport players take all.

The advent of technology has made so many modern devices accessible to the masses. A smartphone is a truly wonderful appliance. Everybody uses it (though not I), and it somehow is affordable to even welfare recipients as I have seen. Yet, few people know how its software and internal circuits work, and even fewer take an active role in developing and designing it. The rest enjoys using it, but so few want to participate in the tedious manufacturing job of assembling it, and those jobs have all gone overseas.

I do not know how the above problems can be resolved. Even in Greece where the unemployment rate is high, and young people often take jobs like waiting table for merely 500EUR/month, there are jobs in agriculture such as picking fruits or produce in the field. Same as in the US, all those hard backbreaking jobs go to 3rd-class immigrants, as the natives shun away from these jobs.

What to do?

 

[Independent]

We'll probably start SS next year at ages 66 and 67.

If we "don't need" it, we'll send our children monthly checks. They're paying taxes so I can get a benefit, maybe we'll decide that they can use the money more than we can.

I'd rather give it to them now than let accumulate and have them inherit it.

 

[Which Roger]

Productivity increase means that we can produce more with less labor and capital. That often means workers getting shunted if there are no other growth areas that can use the labor that is now made surplus.

The other day, I read about a large newspaper in Ohio laying off 50 editorial staff. This is of course just the latest in the decline of the printed media that has been going on for years. And just yesterday, there's an article, on the Web of course, about how craiglist free ads have royally hurt the income of newspapers. To that, one can add autotrader-dot-com, rvtrader-dot-com, etc...

It is obvious that the ability for an individual to publish his own ads on the Web and with color photos to boot is great productivity enhancement, but that makes redundant so many workers in the printed media. And then, online commerce sites such as eBay also cut out many middleman merchants. What do these people now do? Not all of them can be put to work as plumbers, electricians, or automechanics, who we still need of course.

About the concentration of wealth to the top, Taleb, the author of The Black Swan, elaborated on the phenomenon of "winner takes all" in his book. In the old days, there were jobs for bandwagon entertaining tropes who visited remote places. Now, with cables, TV, and the Web, people only watch the most well-known entertainers. The top actors, actresses, singers, sport players take all.

The advent of technology has made so many modern devices accessible to the masses. A smartphone is a truly wonderful appliance. Everybody uses it (though not I), and it somehow is affordable to even welfare recipients as I have seen. Yet, few people know how its software and internal circuits work, and even fewer take an active role in developing and designing it. The rest enjoys using it, but so few want to participate in the tedious manufacturing job of assembling it, and those jobs have all gone overseas.

I do not know how the above problems can be resolved. Even in Greece where the unemployment rate is high, and young people often take jobs like waiting table for merely 500EUR/month, there are jobs in agriculture such as picking fruits or produce in the field. Same as in the US, all those hard backbreaking jobs go to 3rd-class immigrants, as the natives shun away from these jobs.

What to do?

But there are millions of people employed by companies and industries that didn't exist 20 years ago. Companies like Amazon, Google, and any wireless phone company. Think of all the jobs involving the internet. The problem is not a lack of jobs. It's the pace of change. When farm jobs became factory jobs, the pace of change was somewhat slower, and there was time to adapt. And the difference in skills needed between a farm worker and a factory worker was not nearly as great as the difference in skills between a lumberjack and a programmer who writes software to digitize books. The "haves" in the next generation will be those who have the skills to learn quickly and adapt to change.

 

[NW-Bound]

Still, the new jobs will not employ the same number of workers as the old jobs. That's how we have productivity increase. Machines and technologies allow fewer workers to do more.

When I traveled down I-5 in California recently, I saw fruit orchards being trimmed by big clippers. They harvest fruits with tree shakers now, and even migrant workers will have problems finding work.

 

[samclem]

Still, the new jobs will not employ the same number of workers as the old jobs. That's how we have productivity increase. Machines and technologies allow fewer workers to do more.

Increased productivity: It could mean fewer labor hours to produce a given amount of product, or it might just as well mean the same number of labor hours to produce more product.

Higher productivity doesn't necessarily mean fewer labor hours.

Higher productivity is, however, the only sustainable means to have growing per-capita GDP, and the only means for a country to have increasing wealth. Redistributing wealth between individuals or groups doesn't do it, "rationing jobs" (mandatory limits on work weeks, forcing oldsters out of the work force, etc) doesn't do it, increasing minimum wages and mandatory OT pay, etc doesn't do it. Only increased productivity increases national wealth.

 

[NW-Bound]

Exactly!

We definitely have higher living standards than yesteryear. Flat-screen TVs, wireless phones, computers, etc... are so affordable, so that even the working class can afford things that were not even available to rich people 20 years ago. Fifty years ago, the average home did not have air conditioning, nor space to park 2 cars, let alone 3.

The problem is in finding meaningful work for displaced workers. Some will always feel that they are underemployed. Even among the college educated, only the best get to work at the like of Google, Apple, to design cool things. The lesser may have problems finding work. And as described in my earlier post, the people at the bottom like fruit pickers do not even get to do that anymore.

There will always be some resentment. It can develop into larger social problems, but I am not a student of social or political sciences to know what to do about it.

PS. Talk about productivity increase, is there a limit as to how far we can go, or even if we want to? We already grow more food than we should eat, build and sell more gadgets that we just throw them away before they are worn out, construct larger McMansions than we really need. Do we keep on exhausting our natural resources?

Do not get me wrong. I am an investor in equities, and for my sake, I like to see growth so that I can retire comfortably with my stash. I like to see "meaningful" growth though, so that it is more sustainable. Even the Chinese have built so many apartments that they have ghost towns. Growth like that only leads to troubles. It seems the world does not know what to do with its excess capital, both material and human.

 

[Khufu]

only[/U] sustainable means to have growing per-capita GDP, and the only means for a country to have increasing wealth. Redistributing wealth between individuals or groups doesn't do it, "rationing jobs" (mandatory limits on work weeks, forcing oldsters out of the work force, etc) doesn't do it, increasing minimum wages and mandatory OT pay, etc doesn't do it. Only increased productivity increases national wealth.

It's true that higher productivity is the only means to increasing wealth in a country, but whether the general standard of living increases depends on whether the increased wealth is distributed fairly in the society or not. In the US the average worker has received no benefit from the productivity increases since 1973

Between 1948 and 1973 the average worker's standard of living went up along with productivity gains. But not after 1973. Where did the productivity gains go? Who got the benefit at the expense of the workers?

It was the 1% who managed to sequester the gains. This happened through the lowering of taxes on the wealthy, the decline of the unions, globaliztion of trade that exposed manufacturing workers to competition from cheap labor countries like China, but not doctors or lawyers, for example, and other reasons.

To take one example: How does it come about that doctors are able to protect themselves from foreign competition unlike factory workers? There are several ways. Doctors trained abroad in medical education systems that are more efficient than the American system, could be imported into the US and given green cards if they pass a reasonable test and go through a probation period during which their performance is evaluated against American standards. Instead, the current system constricts the number of foreign-trained doctors who get licensed in the US as described in this NY Times article:

For years the United States has been training too few doctors to meet its own needs, in part because of industry-set limits on the number of medical school slots available.

The biggest challenge is that an immigrant physician must win one of the coveted slots in America’s medical residency system, the step that seems to be the tightest bottleneck.

Dr. Sombredero was helped through the process by the Welcome Back Initiative, an organization started 12 years ago as a partnership between San Francisco State University and City College of San Francisco. The organization has worked with about 4,600 physicians in its centers around the country, according to its founder, José Ramón Fernández-Peña.

Only 118 of those doctors, he said, have successfully made it to residency.


http://www.nytimes.com/2013/08/12/b...doctors-to-practice-in-us.html?pagewanted=all

Limiting the number of working doctors is one way that health care costs have grown to 18% of US GDP, higher than any other country by far. Meanwhile those doctors protected from foreign competition can buy cheap flat screen TVs from Asia benefiting from low Asian labor costs that have decimated the American manufacturing work force.

So, it is very naive to think that the current distribution of productivity gains is "natural" and that trying to make it more equitable is some kind of artificial intervention that is doomed to fail.

Restricting free trade in medical skills is just one way the 1% have sequestered productivity gains. The most important method has been changes in the tax system:

So, I would call for an end to artificial restribution policies that benefit the rich at the cost of the average workers and a halt to America's slide into becoming Brazil.

 

[Shawn]

[...]

So, I would call for an end to artificial restribution policies that benefit the rich at the cost of the average workers and a halt to America's slide into becoming Brazil.

If I am interpreting these numbers correctly, it means that the taxes paid by the top 400 earners went up 210%. I believe this is significantly more than inflation during the 15 year period. So if the government wants to maximize its revenue and get more dollars out of the rich, it suggests that it should keep doing whatever it is doing above.

 

[samclem]

whether the general standard of living increases depends on whether the increased wealth is distributed fairly in the society or not.

(Emphasis added). "Fairly" is another one of those bellwether words. "Fair income" is determined by the market. As you point out, US workers have faced a lot of global competition. Those workers overseas, earning a small amount by US standards, are earning much, much more than their parents ever did and each dollar/peso/yuan they bring home buys, on a marginal basis, much more "good" than a similar amount would if paid in the US ($100 in Honduras: A family of 6 can eat for two months. $100 in US: The family of 6 goes to dinner one night) . This globalization has been a >boon< to workers and their families worldwide. But tough on US workers.

Doctor shortage--yes, we have one. Congress has a part in that, as well as the trade union/guild known as the AMA. This is the type of anti-free-market activity that is favored by some people as a means to increase pay. I'm surprised but heartened to learn that you object.

Did US workers benefit from productivity improvements? Absolutely. What would their pay have been if the productivity hadn't improved? And what would this (lower) pay have bought if every product had the higher labor costs (more hours per product) included in it? How high would US unemployment have been if our factories hadn't kept up with foreign competitors?

Does our tax system favor "the rich": A picture is worth a thousand words. The bottom graph is for >all federal taxes< (including payroll taxes).
Source: CBO

So, to "fairness":
The top quintile of households paid an effective tax rate (all Federal taxes) of 25.1%
The bottom quintile of earners paid 4% (and had a FIT rate of -6.8%: They gained money thanks to the tax system)
The middle quintile (40-59%) paid 14.3%
(all numbers from 2007. Source: CBO)

Federal taxed pay for things that benefit everyone: scientific research, pollution controls, defense, a functional court system. Is everyone paying their "fair" share for this common expense? What does the chart indicate?

The idea that the tax code somehow favors the wealthy at the expense of the poor doesn't match reality. It clearly redistributes wealth from high earners to low earners. Again, I'm no defender of our present tax system, but there's no disputing who is paying the bill here.

 

[heirloom]

Even among the college educated, only the best get to work at the like of Google, Apple, to design cool things. The lesser may have problems finding work. And as described in my earlier post, the people at the bottom like fruit pickers do not even get to do that anymore.

Are you Mayor Bloomberg in disguise? This is exactly what he said about 3 months ago. He feels a lot of college students shouldn't be going to college, maybe try trade school because only the best in class will get jobs.

A lot of software businesses think like Gates, they don't want to hire U.S. employees because they can get people from other countries to work for less. Zuckerberg wants to increase immigration now because he said we don't have enough qualified engineers....yeah right

Anyhow, hubby and I both are receiving SS and are saving it in case we need it for health reasons. Who knew everyones healthcare premiums would go up and costs for visits, tests, etc. also go up. Never know what will be next, so we are saving it for dear life.

 

[NW-Bound]

Oh, hi! Michael here, glad to make your acquaintance.

Yeah, I wish I had his money. I did not know he said that. I think we are both just stating the obvious. There are so many college graduates still looking for work, and nowadays that includes engineering graduates too, not just liberal art majors.

My brother who worked at Google said that there were so many applicants with 4.0 GPA, so only those who showed original extracurricular work got a chance.

My daughter had no problem finding work after her accounting degree, but I think it was because she was already working full-time doing payroll when she was still in school. As her employer paid for her graduate degree, she thought about law school, but a law professor talked her out of it, saying only graduates from top law schools could get anywhere. So, she went for an master program in business, and just finished it.

My son, a mechanical engineer graduating last year, just got his full-time job after spending a few months as a job shopper at his employer. Many of his friends were still looking for jobs, and some had very good grades.

I did not in any company that had H1B visa workers, but that seems more common in software fields. Most US companies are now multinational, so they can just easily hire workers in offices abroad. When I was in Haifa, a high-tech town of Israel, the engineers I was visiting proudly claimed that one of their neighbors in that industrial complex was a branch of Google. And my brother also visited many Google offices in Europe.

 

[Which Roger]

Here's my take on the growing income/wealth gap: We are paid for what we produce, not for how hard we work. 100 years ago, when most workers performed manual labor, productivity and effort were highly correlated. By working harder, you could be somewhat more productive, but I doubt that there was every a farm laborer or assembly line worker who was an order of magnitude more productive than average.

These days, productivity is highly correlated with (specialized) knowledge. The way to get ahead is to be paid for what you know, not for how hard you work. It's not unusual for a top-notch professional to be an order of magnitude or more productive than an average worker in that profession.

As a rather extreme example, I think of the scene in the Facebook movie where a lightbulb goes off in Zuckerberg's head so he runs to his computer and, with a few clicks of a mouse, adds "relationship status" to facebook. In an instant, he added millions of dollars of value to the company.

 

[pb4uski]

Well, not a communist but perhaps a socialist??

You hit the nail on the head.