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Maybe Labor is Underpaid



September 05, 2011 – Comments (11) | RELATED TICKERS: SPY

I know we spend a lot of time listening to how labor is too expensive in this country, and maybe at the margins it is a bit here and there, but really, given the disparity of income/compensation from the top 1% to everybody else, maybe 99% of labor is about where they belong on compensation not high.  Maybe, it's the top 1% who are the problem.  Especially the executive, upper management and financial group.  Actually look at the numbers:


11 Comments – Post Your Own

#1) On September 05, 2011 at 1:36 PM, dwot (29.63) wrote:

I believe that "labour" makes up the majority of the income pool where people actually spend money.  The wealthy put money into investments and try to extract more for themselves.

If labour doesn't have much disposible income they don't have much money to spend on goods and services that make the economy work.

I just a quick relative calculation on the bottom 80% relative financial wealth and it is down 20%.  I don't see how that doesn't suck the life out of the economy.

I don't think chasing investments does that much for the economy, but these people that are doing the work, producing the goods...  Well, probably there are way more in that group that aren't producing anything because they've been displaced and their lack of income is further displacing others.

I think a living wage is a foundation of keeping an economy humming.

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#2) On September 05, 2011 at 2:37 PM, alstry (< 20) wrote:

In a world where technology is increasingly replacing jobs...why not give EVERYONE a living wage just for living..globally...after all, the machines really don't need money.

And those that work....give them a bonus.

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#3) On September 05, 2011 at 3:50 PM, HarryCaraysGhost (75.49) wrote:

Kirk would you be cool with paying a flat tax?

I don't mind the wealthy having there wealth what bothers me is when I'm paying a higher %.

This is going to sound crazy and will not buy me any votes (good thing I'm not running for anything ; )

I also believe that the poor should also pay the same tax rate that I am taken out of there checks. Sounds silly since the government would just be taxing themselves, but I think that everyone lives here and we all should pay the same rate.

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#4) On September 05, 2011 at 6:05 PM, Valyooo (33.65) wrote:

yes, investing does nothing for the economy

because most great companies and ideas and programs came out of the sky!

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#5) On September 05, 2011 at 6:40 PM, devoish (87.64) wrote:

A flat tax already exists, it is called a sales tax, and should be extended to include stock purchases. I should not get a free ride on a portion of my spending habits, because it distorts the market value just like a mortgage tax deduction.

Best wishes,


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#6) On September 05, 2011 at 7:06 PM, Frankydontfailme (29.25) wrote:

Odd way of looking at it kirky. I consider wages to be too high because companies won't hire workers for these prices. If the wages were lower they'd hire more. As a result the products would be cheaper to make and would sell for less also.

I am also deeply concerned with the ever expanding divide between the rich and the poor. This is a tough one. Instead of paying the people who have jobs more (leading to more people fired) I propose ending the fed (stop dilluting our currency to encourage stocks which the rich mostly own) end bailouts, and end government subsidies (which always seems to help out the rich). Also get businesses out of politics.

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#7) On September 05, 2011 at 7:30 PM, HarryCaraysGhost (75.49) wrote:

@5 there's no sale tax on a link card.

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#8) On September 06, 2011 at 12:32 AM, kirkydu (90.54) wrote:


A flat tax would work if the exemption were large enough.  You have to remember, at $109k of income, FICA drops off.  All studies of a flat tax that includes no income tax until twice the poverty rate is reached come up with a flat income tax rate of about 35%.  Those imaginary numbers of 17-22% assume no excemption, which makes absolutely no sense.  


No what's odd is that people don't realize, or I should say can't do the math, to realize that employees making a few thousand a year more at most large companies could easily be offset if execs and managers weren't catering to Wall Street so that those three groups could skim out of the system.  I'm sure you didn't look at the link I included, so I'll point out that 3/4 of Americans already make under $50k a year.  There is no wage problem in general (again, here and there of course there are some marginal issues) for five figure employees.  The problems are in the upper six and seven and eight figure compensations.  

As for the FED, right now Ben Bernanke is the only man in the world keeping the economy from spiraling into depression.  Hopefully the Europeans follow suit this week.


I will be writing a post soon about what factor has caused every single economic collapse in history.  Hint, Gekko was wrong.

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#9) On September 06, 2011 at 10:41 AM, cbwang888 (25.67) wrote:

It is the greedy 1% want to maximize their profits by outsourcing the labor oversea. Wall Street encounraged it and helped money rushing into BRICS ...

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#10) On September 06, 2011 at 10:58 AM, leohaas (29.31) wrote:

The problem is the different taxation of labor and investing. Why don't we start fixing that?

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#11) On September 07, 2011 at 3:13 PM, kirkydu (90.54) wrote:


I agree.  We have gone way past compartive advantage considerations to outright selling out of America.


There is a pretty strong reason to tax cap gains at lower rates than income, however, all these crooks who take their income in ways that qualify as cap gains is a sin and ought to be corrected. 

If somebody's personal money is not at risk in an investment and a company is compensating for that person for work, then he/she ought to pay income tax on it, not cap gains.  The way stock options for execs are taxed (and repriced) is so unethical I am surprised we haven't dealt with that years ago.  The carried interest rate that hedge fund managers claim is crap too.  Guys who have stock compensation ought to pay income tax on that as well. 

In short (too late for that I suppose), all compensation ought to be at income tax rates.  If we did just that, we could make the income rates permanent.

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