I accidentally redistributed wealth the other day.
I bought gas at the local gas station. The price, $3.79 a gallon, was fully $.40 more than just a few weeks ago. Now, I hadn’t heard anything about oil leases having gone up in price, or drilling rigs costing more, or even the going rate for an off-shore platform having jumped recently. But the price was higher-and I paid it-because the sign said so.
My personal wealth had been redistributed to Exxon/Mobil via my gas purchase, in addition to the fact that it had been redistributed to them via $5 billion in government subsidies (about as much as they pay in taxes)* already.
Then, I did it again.
I bought something at Walmart. Due to the low wages that Walmart pays, a large portion of their workers live below the poverty line and have to subsidize their income with food stamps. I, personally, pay the taxes that pay for the food stamps that subsidize Walmart’s workers. Every time I buy something from Walmart I make them just a little more successful, ensuring that their business model of paying near or at poverty wages continues.
My personal wealth has been re-distributed to Walmart via my having to support their workers with food stamps.
Minimum wage in real, inflation adjusted 2009 dollars has decreased from $10 in 1968 to about $7.00 today. A car that cost $1,995 in 1970 costs about $15,000 today. A house that cost $20,000 in 1970 costs about $200,000 today, even with the housing market collapse.
Yet the per capita GDP has gone from about $15,000 in 1968, to $45,759 last year, in the same constant dollars.
So, while workers at the bottom of the pay scale have lost $3.00 per hour in real dollars, their contribution to the overall US economy has tripled. Their wealth, if you can call it that, has been redistributed to the overall economy. But where has it gone?
This graph indicates the increase, according to the Federal Reserve, in corporate profits since 1965.
So, to put this into perspective:
This graph indicates the divergence of personal income compared to corporate income. It is based on a University of Mass study.
So, to all of you who are so vehemently fighting the righteous battle against redistribution of wealth, you may need to reconsider just whose wealth we’re discussing here. Those who believe that the least wealthy among us are somehow getting wealthier at our expense need to spend some time reading the economic facts, some of which I have very briefly laid out here.
According to Merriam-Webster:
Stockholm Syndrome is the psychological tendency of a hostage to bond with, identify with, or sympathize with his or her captor.
When those of us who work for a living sympathize more with those to whom our wealth is be given than with those from whom it is being taken, it may be time to reconsider which of us is the hostage, and which is the captor.