Wealth Inequality

[Mrmagoo]

I honestly can't believe people still engage in debate with Mrmagoo assuming he is going to come to some moment of recognition that it's not so bad. He could win a million bucks at lunchtime tomorrow and be on here by 5pm complaining that he's still never going to be as rich as the top end and that is isn't fair, that the odds are stacked against him, that the universe has it in for him, he should've been a truck driver in the mines/offshore welder/bricklayer/plumber or ice cream man and all of his problems would be solved.

Meanwhile, the rest of us get on with life and bettering ourselves.

They argue because they know I am right and that angers them.

 

[craft]

Does the report take into account net wealth or gross wealth?

Net Wealth.

https://publications.credit-suisse.com/tasks/render/file/?fileID=60931FDE-A2D2-F568-B041B58C5EA591A4

Only 6% of Australians have net worth below USD 10,000,
which can be compared to 29% in the USA and 70% for the
world as a whole. Average debt amounts to 20% of gross
assets. The proportion of those with wealth above USD
100,000 is the highest of any country – eight times the world
average. With 1,783,000 people in the top 1% of global wealth
holders, Australia accounts for 3.8% of this wealthy group,
despite having just 0.4% of the world’s adult population.

 

[tech/a]

They argue because they know I am right and that angers them.

Magoo
That's it

Psychology your a natural.

 

[againsthegrain]

They argue because they know I am right and that angers them.

Good posts Magoo, always enjoy reading your unbiased opinion from the other side of the coin, keep up the good work mate

 

[Wysiwyg]

They argue because they know I am right and that angers them.

You are right. For the majority they will plug away at their machines for 40 years, pay off the house and have some super. at the other end.

 

[craft]

They argue because they know I am right and that angers them.

Maybe you are conversing with people who don’t want to acknowledge luck in outcomes for fear of what it might infer.

Or maybe people are trying to help you overcome what comes across as a self defeating attitude.

Who knows?

Unfortunately your points, many of which I find interesting and informative, get lost in the subsequent tit for tat. What Interests me is whether your disgruntlement is isolated and related only to your personality or wide spread and symptomatic of the economic inequity discussed in the thread.

 

[luutzu]

A good lecture from Nobel laureate for economics Joe Stiglitz regarding wealth and income inequality.

It is real, the poor do have the odds stacked against them... and while I still believe Australia and the West is the best place for social/wealth mobility, there's no denying that luck, money and connections does play a heck of a lot in any one's successes.

Add to that globalization and cheap labour the gen X and after have to compete with. Then the cutting of training and increasing costs of higher education; the growing influence and social acceptance of this neo-con love for the market, that it knows best; the invisible hand that we all ought to look out for number one because it will be good for all other numbers... might need a Third World War to correct it like the last time it swing this much for the rich.


A couple of funny jokes from Stiglitz' other lectures:

He was invited to a dinner party organised by some wealthy New York socialite because she was concerned about wealth inequality. One of the guests inherited a few billions and goes on and on about how the poor are lazy and always feel they're entitled. Then move on about where's the better tax-haven. But there's one thing the upper 1% do worry about is the guillotine and their neck beneath it - because they do realize there's so few of them and way too many poor serfs.

 

[luutzu]

Looks to be an interesting doco.

 

[tech/a]

Maybe you are conversing with people who don’t want to acknowledge luck in outcomes for fear of what it might infer.

There is absolutely no doubt in my mind that luck plays a massive part.
(1) You could be born in a third world company.
(2) You could be born in a first world country but in the lower socio economic end.
(3) You may not be able to take advantage of opportunity---even if you recognise it.

Although the system tries to keep the majority around the same as much as possible, there are a few that break away to greater wealth.

This is a very true statement.
Even the wealthy are always being reigned in.

There always has been and there always will be a gap.
I think that gap was far wider 100/200 years ago than now.
At least there is a middle class and even emerging ones in some
third world countries.

 

[qldfrog]

There is absolutely no doubt in my mind that luck plays a massive part.
(1) You could be born in a third world company.
(2) You could be born in a first world country but in the lower socio economic end.
(3) You may not be able to take advantage of opportunity---even if you recognise it.




This is a very true statement.
Even the wealthy are always being reigned in.

There always has been and there always will be a gap.
I think that gap was far wider 100/200 years ago than now.
At least there is a middle class and even emerging ones in some
third world countries.

True but I believe also that a new phenomenom is the actual crushing of the middle class in places like Australia/the US.
It is ok for me, was here at the right time, managed to buy place and nearly finish raising my child riding the wave, but i would not be able to reproduce that starting today.
As many have told mr magoo, you can create your own luck: i have tried many ventures/investments/jobs which have lead to nowhere but was always able to rely on a non world competitive market place then unique skills so my salaries initially kept pace with the trademen and the grocery purchase;
this is over: the white collar, efficient and gifted professionnal is now expected to compete with india [and the world] while being taxed at 50% (mor including GST) and paying a trady 100$ just for him to come and provide a quote;
this will soon change and some people will soon realise what the absence of education means and what the real value of a trade knowledge means in a world where 6 billions can easily be carpenter/bricklayers etc.
so as dr Maggoo says: yes the tradie rules, even our last pathetic budget is a tradie paradise but believe me mr magoo, we will talk again in ten years and things will have changed with the unlimited open gate we have with migration;
When this happens, you will be happy to have at least something more in your knowledge bag than the plumber next door;
we will all be universally poor and taxed to the brink
in the meantime: take your chances..and if it fails try again.

 

[craft]

True but I believe also that a new phenomenom is the actual crushing of the middle class in places like Australia/the US.

It’s the squeezing of the middle class down which concerns me most. Despite a lot of peoples best efforts plenty are transitioning to working poor rather than going the other way. Obviously not all and Australia still has reasonable upward class mobility for some but not the majority.


We are on the same path as USA – but they are much further advanced. As far as I’m concerned social impacts of rising relative inequality are already glaringly obvious over there even though by global standards the country is the richest and their capital markets are cracking along at highs again.

I see the current political/economic system as pumping air into a balloon where the majority is collared and can’t expand. Make it to that un-collard bit and everything is expanding beautifully for you, for now – BUT it ain’t no way to durably blow up a balloon to its fullest extent, the constriction of the collar will pop the balloon early. That means we should all have an interest in reducing in-equality. Achieving it without destroying incentives is the challenge.


ps

love this.

in the meantime: take your chances..and if it fails try again.

 

[tech/a]

this is over: the white collar, efficient and gifted professionnal is now expected to compete with india [and the world] while being taxed at 50% (mor including GST) and paying a trady 100$ just for him to come and provide a quote;

Are we talking Engineers/Doctors/Solicitors/Dentists or those with B/A's
What exactly do these professionals do?

this will soon change and some people will soon realise what the absence of education means and what the real value of a trade knowledge means in a world where 6 billions can easily be carpenter/bricklayers etc.

There are 1st world tradies and third world tradies.---not everyone can be a tradie
Most charge the $100 an Hr as they are small businesses not PAYE.

so as dr Maggoo says: yes the tradie rules, even our last pathetic budget is a tradie paradise but believe me mr magoo, we will talk again in ten years and things will have changed with the unlimited open gate we have with migration;

There has always been immigration. There has to be to fill the demand both in White and Blue collar work force.
As for the budget being a tradies paradise---The emphasis on small business encompasses many more fields than tradesmen. The run off even helps larger business and creates opportunity for those to work in small and larger business.

What could Magoo do.

(1) Understand the power of compounding---not just money but, Contacts, Ideas, Earning Capacity/Capability.
(2) Train yourself to think differently to the majority.
(3) Learn how to quantify opportunity and how to take advantage of all or some of it.
(4) Think outside the square.
(5) Start today and never finish.
(6) Embrace and enjoy the challenge---the world--- needs innovators.

Let me give you an example.

My Sister Teaches English in Vietnam (Hanoi). So does her Daughter and Son.
I was chatting with her a while ago (couple of years).
She mentioned that she taught 6-10pm every day and all day Saturday and Sunday.
What do you do the rest of the time?---what ever I want.---which consisted of nothing really!
Why aren't you working at something else?

Now pay in Vietnam isn't like AUST around $33K US a year for her and a part time Bar job isn't going to cut it.

My immediate thought--as I travel a lot.
Why don't you do Ex Pat Guided tours during the week.
Took a few months and it sank in.
$80US a day---fellow Aussi's and English/and Americans love expats to show them around.
$80US is big money in Vietnam. She can and does ferret it away.

Not only that but she has built a small network of Aussi guides and she takes a cut. (Compounding Earning Capacity). Its growing.
Look its not Flight Center but it is innovative ---fills a demand and makes life interesting and more comfortable.

 

[qldfrog]

Are we talking Engineers/Doctors/Solicitors/Dentists or those with B/A's
What exactly do these professionals do?
-> any of the above I am an engineer/IT so affected first, the next to be hit were accountants etc
move of back offices O/S
Medecine will be hit then as per US-> online consultation with bangalore, O/S medical treatment or surgery
Lawyers will be last

=====

There are 1st world tradies and third world tradies.---not everyone can be a tradie
no but believbe me the average australian tradie is well below par, and when they are good: some are, what they ask is outrageous
===
Most charge the $100 an Hr as they are small businesses not PAYE.
---yeap mexican in the US will ask $10 for the same sure no tax but most here in Oz do not either
Cash economy



There has always been immigration. There has to be to fill the demand both in White and Blue collar work force.
With due respect this is full BS the only reason in 2013/14 we got 500k new migrants in was to sustain our housing bubble
There are no jobs: a project manager in Brisbane can be asked to work for 80k in 2015, that is 50h weeks for a top level not only academic but experience to prove it white collars
that same role would have gone for 110/120k pa 3 years ago

As for the budget being a tradies paradise---The emphasis on small business encompasses many more fields than tradesmen. The run off even helps larger business and creates opportunity for those to work in small and larger business.
yes and no;
I have my own business so well aware but only tradies have cash and prospects to actually invest 20k in assets;
i will not even upgrade a laptop this year
----------
agree with all the below:
---

What could Magoo do.

(1) Understand the power of compounding---not just money but, Contacts, Ideas, Earning Capacity/Capability.
(2) Train yourself to think differently to the majority.
(3) Learn how to quantify opportunity and how to take advantage of all or some of it.
(4) Think outside the square.
(5) Start today and never finish.
(6) Embrace and enjoy the challenge---the world--- needs innovators.

Let me give you an example.
...
---

T/A we do agree on what the individual can do, but have a different persception of what is the current reality
once again I see that from Brisbane where we must be so lucky as house prices have fallen 1.5% last year....
That definitively shows the state of our local economy
But i like the exchange
mr Magoo should really take a more positive view;
**** does happen, usually hammering you again and again in a sequence; but a positive attitude definitively helps

 

[Junior]

-> any of the above I am an engineer/IT so affected first, the next to be hit were accountants etc
move of back offices O/S
Medecine will be hit then as per US-> online consultation with bangalore, O/S medical treatment or surgery
Lawyers will be last

I'd be interested if you could expand on the above?

I have friends/relatives in all of those industries, they are all well paid with secure jobs and no shortage of work.

 

[luutzu]

Doesn't it all boils down to the reality that it's every man for himself.

That it's expected of you to pay your taxes, pay your bills - but if you're injured or out of work, you might expect society to kinda help you out but society laughs and tell you to get a job or suck a lemon;

If you work hard, tries your best and succeed - people will line up and ask for your wisdom (and money); But if you tries and fail they will call you a try hard and you line up at centrelink (until the next brilliant idea);

If you succeed and have lots of money, people expect you to pay higher taxes and not use that money for greater political and social advancement; they'd expect you to fairly and honestly earn that and more through innovation and value-creation but you figured you could earn that and more through political donation and suppression of market and competition and so give society your middle finger and spoil your kids with the inheritance.

If you inherit the wealth and through no effort get to live in a nice house(s) in a nice neighbourhood and move among polite society, you'd figured you're quite special because you got all that without much effort at all - so imagine how much more you could achieve with some effort on your part!

In the end, you can't please everyone, and you cannot hope for anyone to help you.

It is too much to ask that a lawyer who bill by the hour and have no problem showing poor clients the door... too much to ask that once these people got elected they would suddenly think and care for other people and not themselves. It's nice if they do, but it's also nice to win the jack pot and the plebs dream of an enlightened ruler... well, advanced society does not build its institution around such people. Since it build its institutions around not trusting anyone, of check and balances, you as individuals better have money... and with money, you may or may not help others, but don't expect others to help you.

 

[qldfrog]

I'd be interested if you could expand on the above?

I have friends/relatives in all of those industries, they are all well paid with secure jobs and no shortage of work.

Sure IT engineering:
if you are out of uni today: you will not find any job: direct import from india or elsewhere on 457 visa wiull be used;
accounting/marketing etc :
do not consider moving into big multinational jobs-> one after the other the back office is moved as much as possible O/S as per IT within a few years, in the absence of training and regeneration, the local knowledge vanishes and you will end up with no other choice than importing your brains from O/S;
usually not even as 457 visa but just "visiting" consultant working for multinationals not paying a cent in tax as corporates and using O/S workforces (as per IT) who do not pay tax in australia

the next on the lines are medical profession:
the lobby tries to restrict thequota of new degrees but that is not enough in my opinion;
already major dental work or non urgent surgery can be performed O/S and you got a fortnight of relaxation on the thai beaches as a reward included in your cost;
BTW pretty good surgeon and services there
optometry is fully outsourced via web;
doctor on line and so on are starting here;
you will have a couple of australian degrees doctors used for the facade and to please the regulators but most of the work will be done abroad

law back office will be next;
commercial law, retail conveyancing etc;
just a matter of time;
only a collapse of the AUD and a full halt to open gate immigration will stop that;
as for the hundreds of thousands of so called BA/IT prod imported in the last few years it will not take them long to get a sparky licence, a carpenter/builder one and soon give a bit of competition to our local workforce;
wait and see

 

[Smurf1976]

it will not take them long to get a sparky licence, a carpenter/builder one and soon give a bit of competition to our local workforce

Good luck to anyone wanting to do a trade and get themselves an electrical license. I say "good luck" because with the lack of apprenticeships around these days you'll certainly need a lot of luck to get a foot in the door.

Interestingly, it's the white collar economic types who have created that situation in their never ending desire to focus on the short term and cut costs to the bone today regardless of what happens tomorrow. Suffice to say that I've come across very few tradesmen who agree with that few and I've never come across a union rep who doesn't support the idea of more apprenticeships.

So there's a shortage which keeps prices high. Thank the usual suspects for that one as it's something that not too many who actually do trades work agree with. The big blunder which has cost practically everyone a fortune was, of course, "outsourcing" especially in government where huge numbers of apprentices used to be trained - today it's close to zero and the private sector hasn't come anywhere near close to picking up the slack.

 

[tech/a]

Good luck to anyone wanting to do a trade and get themselves an electrical license. I say "good luck" because with the lack of apprenticeships around these days you'll certainly need a lot of luck to get a foot in the door.

Interestingly, it's the white collar economic types who have created that situation in their never ending desire to focus on the short term and cut costs to the bone today regardless of what happens tomorrow. Suffice to say that I've come across very few tradesmen who agree with that few and I've never come across a union rep who doesn't support the idea of more apprenticeships.

So there's a shortage which keeps prices high. Thank the usual suspects for that one as it's something that not too many who actually do trades work agree with. The big blunder which has cost practically everyone a fortune was, of course, "outsourcing" especially in government where huge numbers of apprentices used to be trained - today it's close to zero and the private sector hasn't come anywhere near close to picking up the slack.

Great points Smurfy
Not to be glossed over---as it has been

 

[qldfrog]

true smurf and t/a; and very same reason for engineering/IT:
outsourcing to big corporatation or recruitment groups who bring in ready to use and cheap manpower from overseas or send the job there
no taking of out of unis young peoples anywhere
The trend is maturing for IT (where this started) with now absence of local skills altogether so "justifying" more import outsourcing.
So it is not a wealth inequality issue anymore, we assist with a wealth distribution across nation;
as long as the average aussie income is above the cheapest world income, if nothing is done, you will see this going and governments lamenting they lose revenue

 

[Wysiwyg]

Good luck to anyone wanting to do a trade and get themselves an electrical license. I say "good luck" because with the lack of apprenticeships around these days you'll certainly need a lot of luck to get a foot in the door.

Adding to that in the sector I work in, our company has adopted a more females approach this year with the apprentice intake. That is more females than males. I am for equal rights but based on genuine desire to be a tradesperson and not 'because I can'. On top of that physical strength and endurance is needed. I believe for some it is the money lure. My cousin has already shown the 'because I can' thinking by completing her apprenticeship and then leaving the trade. I verbally expressed my annoyance being that a young boy who wanted to work in a trade for their life was done out of an opportunity.

Interestingly, it's the white collar economic types who have created that situation in their never ending desire to focus on the short term and cut costs to the bone today regardless of what happens tomorrow.

Oh yes the human component is easy to assess and the shareholders are the reason why restructuring is an ongoing process. Interestingly when you're at the top you give yourself a +30% remuneration increase (shareholder approved for expectant ROI no doubt) and cut the workforce back at the same time was an easy fix. I would have to work 60 years to make what the CEO makes in 1 year and I grossed 109k this year. Fact!

The big blunder which has cost practically everyone a fortune was, of course, "outsourcing" especially in government where huge numbers of apprentices used to be trained - today it's close to zero and the private sector hasn't come anywhere near close to picking up the slack.

The winner of this years major steel fabrication contract is ....... China.