When do you consider someone "wealthy" or "rich"?

Discussion in 'Business & Economics' started by Seattle, Aug 8, 2019.

  1. Write4U Valued Senior Member

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    People in government also receive COLA. Persons employed in non-profit corp that receive federal moneys also receive COLA.
    Working as bookkeeper for a non-profit (receiving federal moneys), I was a recipient as well as responsible for the distribution of the COLA as a percentage of salary to 40 employees. That's when the inherent unequal distribution of that "basic living cost adjustment" struck me.
     
    Last edited: Oct 22, 2020
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  3. Seattle Valued Senior Member

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    It's not "unfair" any more than different salaries are unfair. You should learn to live on what you make. The same percent COLA applied to everyone is as fair as you can get. It's supposed to offset the inflation rate which also applies to everyone unequally.
     
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  5. Write4U Valued Senior Member

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    If you do not make a living wage, you are punished when costs of basic goods rise . I call that "adding insult to injury".
     
    Last edited: Oct 22, 2020
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  7. Seattle Valued Senior Member

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    Cost of goods rise (inflation) when you pay people more without any increase in efficiency.
     
  8. Write4U Valued Senior Member

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    Yeah, I've heard that story many times. That was the argument for maintaining slavery. Just can't afford to pay lazy people.

    Trickle down economics has been tried and failed, over and over again. All that money keeps floating at the top and there is none left by the time it reaches the bottom.

    Fact; when you pay people more, you increase demand for goods and increase productivity.
     
    Last edited: Oct 22, 2020
  9. Write4U Valued Senior Member

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    A little History.

    Economic policy of the Bill Clinton administration
    https://en.wikipedia.org/wiki/Economic_policy_of_the_Bill_Clinton_administration#
     
  10. Seattle Valued Senior Member

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    I'm not describing trickle down economics. I'm just saying that if you pay anyone or buy anything for more than you need to it's inflationary. I'm not saying the world is going to end if you increase the minimum wage.

    If you exaggerate the effect you will probably agree with me. What happens if you pay the McDonald's worker $100k to sell you a hamburger? It's inflationary by necessity. Sure, they will have more money to spend and that's good for the economy.

    It still doesn't mean it's a smart thing to do.
     
  11. Write4U Valued Senior Member

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    But you are grossly misrepresenting reality.
    McDonald workers do not make a living wage to begin with, let alone 100k.
    And that's ok with you?

    No one is suggesting that they make 1ook, but Henry Ford had it right when he said I pay my workers enough so that they can buy my cars. Seems to me that's a win win situation.

    The Middle Class Took Off 100 Years Ago ... Thanks To Henry Ford?
    https://www.npr.org/2014/01/27/2671...-took-off-100-years-ago-thanks-to-henry-ford#
     
    Last edited: Oct 22, 2020
  12. Write4U Valued Senior Member

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    This is so true and topical.

    (warning crude language)
     
  13. Seattle Valued Senior Member

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    That's just politics.

    No one was suggesting they made $100k. As I said, you would probably agree with me if we made the example more extreme.
     
  14. billvon Valued Senior Member

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    21,635
     
  15. Write4U Valued Senior Member

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    20,069
    no COLA is based on basic living cost, as shown in the link I provided in post #477
    I'll repost:

    How Salary Cost-Of-Living Adjustments Are Calculated
    IOW , basic living expenses, not maintaining luxury yachts and private planes.
     
  16. billvon Valued Senior Member

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    No one considers yachts and planes as part of COLA. What's wrong with you?
     
  17. Write4U Valued Senior Member

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    RIGHT! A lot of Senators own yachts or private planes, or both!

    Do Members of Congress get Automatic Pay Hikes (COLAs)?

    Surprise, surprise....
    IOW, very wealthy people not in need of an increase in Basic living costs.

    p.s. do they get this raise for being more productive than McDonald employees?
     
    Last edited: Oct 22, 2020
  18. billvon Valued Senior Member

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    Right. Their COLA is not to enable them to afford yachts or private planes, nor is it intended to allow them the basics of life. It is to adjust their salaries to match inflation. Period.

    You also somehow left out the fact that since 2009 they have voted to not take the COLA that applies to all government workers. How odd that you would leave that out!

    And your math STILL doesn't work. Sorry. I know math is hard.
     
  19. Write4U Valued Senior Member

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    Why should they receive a COLA which far exceeds the actual cost of living increase?
    Why do you keep lying? I may not have seen the 2009 vote, but in post #494 I did quote
    And guess who was President in 2009? Obama and a Democratic congress, a little more socially oriented crowd.
    The math works fine, you just keep refusing to see the inherent inequality in the distribution of wealth and any adjustment for Cost of Living Increases as a real mathematical number, instead of some vague percentage which results in a adjustment that for the wealthy far exceeds the actual average cost of living increase in real dollars. That's making a profit on inflation, you know "unearned income".

    As you said yourself, inflation of maintenance of your 5 million dollar yacht is not part of an increase in cost of basic living expenses, especially if it is the tax payer who has to foot the bill. That's just plain robbery.

    Get real man.
     
    Last edited: Oct 22, 2020
  20. billvon Valued Senior Member

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    Because for them the COLA is misnamed. It's an automatic raise that keeps their salary the same in real dollars. (A raise that they have declined over the past 11 years.) That's its purpose. Not to allow people to live on "only" $170,000 a year.
    Your math doesn't work AT ALL.

    You have claimed that "COLA is distributed as an increase of 2.5 % of your income. So a person making 20,000 p/yr receives a COLA of 500.00 p/yr, actually losing 100.00 p/yr on the actual cost of increase." You've also said "his COLA, calculated as percentage of income, is less than the actual cost of living increase." Both are incorrect.

    You correctly state that a cost of living adjustment applies to your salary, not your expenses. That means if the cost of living goes up 2.5%, and your salary goes up 2.5%, you actually get MORE money to spend, rather than losing money as you have claimed.

    Let's take a simple example. Guy makes $10,000 a year. He spends $8000 on basic living expenses, and $2000 for everything else (entertainment, savings, optional purchases etc.)

    Now cost of living goes up 2.5%. He gets a 2.5% COLA. His expenses are now $8200 a year. His pay is now $10250 a year. He now has (10250-8200) = 2050 for everything else. $50 more than he had before. So he is GAINING money on the COLA.

    Simple math.
     
  21. Write4U Valued Senior Member

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    20,069
    You are completely missing the point.
    That is why you had to modify your concept of COLA as a fixed amount of money into a percentage raise of salary instead of an amount of increase in living costs.
    By your own word, your examples have nothing to do with COLA, the subject under discussion.

    A raise in pay for tenure or merit is not the application of COLA, which is a raise in cost of basic living expenses, which is based on actual COST, not a percentage of income.

    As bookkeeper for a large non-profit corporation, I used to distribute COLA payments and I know what I'm talking about.

    If the cost of basic living expense goes up by $600.00 p/yr, everyone should get a single payment (or tax credit) of $600.00 regardless of your income. Not as a calculation of a percent of income which translates into a different amount for everyone and favors the people with high incomes.
    That's simple math.
     
    Last edited: Oct 22, 2020
  22. billvon Valued Senior Member

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    YOU brought up Congressional salaries. If you wish to retract your statement, I am good with that.
    So someone making $1 million a year should get $600? Sounds like a waste of money to me.

    A father in a family of 8 should get $600, because you figure his increase in cost of living will be the same as a single guy's? Might want to rethink that.

    Everyone who is doing a reasonable job SHOULD get regular raises. This is mainly to keep up with inflation. That's how it's supposed to work. If he's doing a great job, then increase it faster than inflation. COLAs should be reserved for unusual conditions - a radical increase in housing prices or food due to a drought, for example.
     
  23. Write4U Valued Senior Member

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    20,069
    No, because COLA does not address Income. It addresses Expense of basic goods.
    Exactly, technically a person with a high income is not affected by a increase on the cost of meat. He imports his caviar from Norway, by plane.
    Yes, you're getting it. Actually it's even worse. The COLA as percentage of salary of a low income earner may not even pay for that 600 dollar increase and he loses on the deal, while COLA based as percentage of salary on a high income person results in his making a profit on the deal. That's the inherent inequality build into the distribution of COLA as a percentage of income.
    I totally agree, but when your boss tells you you are getting a raise in salary because you are doing a good job, he is not talking about COLA
    Right! But to a low income earner, any increase in the costs of basics of life, food, shelter is disastrous, whereas it does not affect the living standard of high income earner living in his mansion and having a chef prepare his dinner. COLA has nothing to do with Income. It is based on an increase in cost of certain basic living Expenses, such as rents, utilities, staple foods, gas, as calculated from statistics on the Consumer Price Index, not a general inflation of the whole Nation's Economy.

    And adding "insult to injury", if you calculate the increase in basic costs as a percent of income (as they do now) then 1 person, making a million a year, makes a huge profit on that slight increase of cost, whereas the guy with 8 kids, making 20 thousand a year, ends up with less than the actual increase in cost of his real expenses.

    To a poor person an increase of 600 dollars may represent a weeks salary, to a rich person it may represent an hour's income. That is why I brought it up . The current system favors high income earners, exactly opposite to the intent of COLA which is designed to assist low income earners as they are the most affected by any increase in the cost of basic living expenses.

    Hence my observation that current COLA as a percentage of income does not represent a cost of living adjustment, but a cost of lifestyle adjustment. The poor get poorer, the rich get richer.
     
    Last edited: Oct 22, 2020

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