Income Disparity and How to Fix It

Occupy Wall Street is in full swing and it appears the “99%” in the U.S.  have inspired people oversees to occupy their own cities. If you’re following the protests on cable TV, you’re either getting your news from the Marxists, Ed Schultzs’s of the world or the “deregulate everything, environment hating, don’t tax the poor billionaire job creators”, Sean Hannity type folks. While both sides feel very passionate about their positions, their ill attempt of reporting and overdose of personal opinions isn’t important. If you’re interested, rather in how we got into this mess in the first place and how we’re going to get ourselves out…. Keep reading.

Lots of people are outraged and for a good reason. When you are struggling to put food on your family’s table you have a right to be angry. Protesters are criticized for not having a clear message or so called list of demands, but when you’re hungry and don’t have the means of buying food, logic has its way of going out the window.

Throughout history there has always been the haves and the have-nots and this will be true as long as humans roam the earth. What makes these protests a unique point in history is that even though we live in a full fledged democracy, the inequality in income still exists, which makes this whole situation all the more frustrating for the protesters. Unlike hundreds of years ago during the dynasty eras in China or times of royalty in Western Europe the peasants could direct their anger towards the Emperors and Kings and Queens for their mismanagement of countries and indulging in the labor of the then “working class”. The elephant in the room, or Zuccotti park in this particular case is that their is no one in particular to blame for the empty stomachs, except for the man (or woman) in the mirror.

Even though it doesn’t seem like it now, standards of living are exponentially higher now then they were even a few decades ago. This is noted by observing advances in the medical industry, communication networks, methods of travel, food we eat and increased life expectancies. The self interest of people and businesses to accumulate wealth by striving to be the best source for consumers is the reason for this increase in standards of living. Although we are still trying to figure out the right balance of regulation and government intervention in the free market we are making huge strides in the right direction.

In his book, “The Age of Turbulence“, Alan Greenspan has noted the alarming increase of income inequality over the past fifteen to twenty years. He explains that the reason is because of the rapidly and constantly evolving economy and skills that are needed in today’s job market. People with technical skills that were earning a respectable wage just five or ten years ago are finding that their skill sets are now irrelevant. This creates just as much frustration for employers and as it does for the unemployed.

Employers that provide cutting edge products or services are frustrated because they can’t find people to fill the positions needed. When they do finally come across the person with the necessary skills they have to pay them an arm and a leg, otherwise they will go work for the competition. The frustration from those that are unemployed stems from going to school for four years and having a diploma that was supposed to pay them X number of dollars. It’s hard to imagine anything more frustrating than preparing for the so called “real world” four to five years only to have studied a set of skills that are no longer relevant. Add tens of thousands of dollars of debt for those irrelevant skills and anyone would feel like lighting a car on fire or bashing in a window as we’ve just witnessed in Rome.

The challenge faced is a unique one because we have record high unemployment numbers and employers who can’t find workers with the necessary set of skills. The result as we’ve seen is the oversized disparity in wages going to the small percentage of the population with the set of skills necessary today. It’s not necessarily corporate greed or people wanting to hoard cash. On the contrary, many of the ultra rich are willing to pay a higher tax rate if the government would spend it more efficiently.

As for the solution? Master a specific, technical skill in the shortest amount of time and as cheaply as possible. Classes are offered at local community colleges around the country for a few hundred dollars and often times you only need a couple of classes to master a skill that is in demand. It’s hard to dismiss the common knowledge we’ve been spoon fed all our lives that we need a college degree in order to make a livable wage, but we live in a society where highly specialized skills are needed and taking two years of basic courses in college would only prove useful should you be picked as a lucky contestant on Jeopardy. It appears we’ve forgotten the original purpose of higher education which is to prepare individuals for skills needed as opposed to getting a diploma for the sake of getting a diploma.

While it’s easy to take up space in a park and play Angry Birds or Farmville on your phone all day in protest of the unfair economic environment, it’s much harder to come up with a solution. The Border Industrial Association (BIA) in New Mexico, founded by Jerry Pacheco is an advocacy group formed to unite the voice of business owners, encourage pro-business legislation and support economic development for the mutual benefit of all the businesses along the border. It just so happens that currently at the top of the agenda, businesses in the BIA are filling out surveys to identify and aggregate the skill sets necessary for the positions they are seeking. The information gathered from these surveys will be provided to community colleges in the area to create specific courses for students to study.

As protesters continue to plot a plan to disrupt and discard of the current social, economic and political landscape, they should know that the most effective way to create change isn’t occupation and destruction, but rather create an economy of their own. As the voices become louder and the number of people dissatisfied with the economy grows the most effective solution for the change they are looking for lies in our fiat currency, but that’s a post for another day.

If there’s a lesson to be learned from these protests it’s to keep enough money in your savings account to live a satisfactory lifestyle for at least two years for when shit hits the fan. In the meantime, if you’re interested in learning about money and who makes the most check out my, “Money Series.” Another relevant book you may enjoy, which is next on my list of books to listen to is “Boomerang” by Michael Lewis in which he chronicles Europes financial troubles and relates them to our problems in the U.S. And additionally I started to read 8 figure dream lifestyle.

Disclosure: Included in this article are affiliate links for ING and Audible. To learn more about affiliate marketing and my policy on affiliate marketing see my affiliate marketing guide.

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