Between Romney’s 47% comment and the Occupy Wall Street anniversary, there has been a lot of commentary on income inequality, tax policy and American class structure recently.
Matthew Yglesias kindly brings up an argument that I, as the only one of any of my college friends who works in finance, immediately identified with:
…some of the most rhetorically vicious “class” conflicts in America essentially are arguments between educated professionals earning a lot of money in the corporate world and their peers from college who’ve taken lower-paid positions in education, the arts, or the public sector.
How is it fair that I am a homeowner and don’t live paycheck to paycheck when friends of mine who are teachers, writers, animators, designers, artists, etc. rent and are saddled with debt? I don’t even necessarily have a greater annual salary than all of them.
First, there is a large element of luck, which I sadly cannot remotely quantify.
But second, the fact is that all my friends chose to pursue their professions just as I did. We just chose differently. Unlike many people in the country, we were lucky enough to have the same access to opportunity. No one forced any of my friends to go into the line of work they are currently in. If they chose to go back to school and incur more debt to get a masters degree and are for some reason shocked to not be making enough money in their chosen field to repay those debts, that’s not my responsibility beyond. I avoided debt by not going to graduate school and being prudent enough to save and not run up credit cards. I maxed the 401k contribution at my first few jobs and took advantage of the employer match. I’m not a high roller — I don’t buy designer clothes or go out to expensive restaurants. My “fancy” beer still costs less than $13/6-pack and wine I buy for myself will run around $10. Also, as pointed out by Yglesias, New York housing is a luxury consumption good, and I chose to use some of my savings to put a down payment on a 2-bedroom condo in Jersey City that would have cost at least twice as much in Brooklyn [dishwasher, washer/dryer in the unit, gym in the building, concierge service, weekday shuttle to the metro station that is still less than a 10-minute walk away, and 2 stops from Manhattan]. Again, these are all choices. And maybe my friends begrudge the outcome, but they would not rather have my job than the ones they have. I can’t think of many people I know who work in the arts or public sector who would rather be CEOs. I don’t even want to be a CEO — I would demand an enormous salary to take on the risk, pressure and liability, not to mention the actual day-to-day responsibilities of running a company.
Now let’s pretend I am not just a lowly peon in a financial firm. I am an executive. Executive Me makes the big bucks. EM has a car, 2 homes, a 401k, 2 IRAs, a few brokerage accounts.
Probably a lot of EM’s friends would consider EM to be very wealthy, possibly making “too much” money and having “too much” stuff. Why does EM need a second home with a pool and tennis court? Maybe EM should be forced to take some of the money EM would spend on whatever EM chooses and instead contribute it to a fund or charity to help others less fortunate than EM.
Firstly, this assumes, EM does not already donate to charity and/or financially support other worthy causes such as animal rights, the environment, national parks, public libraries [even as just a cog, I give money and time, thank you very much], that are not as frivolous as spending money on an overseas vacation [also, depending on where overseas, they could probably really use the tourist money to bolster their economy].
Secondly, where is the arbitrary line? EM doesn’t need a 2nd home, but Cog Me also doesn’t need a 2-bedroom apartment to myself. Plenty of people could make do with 1 room, a hot plate and a bathroom. Actually, who even needs electricity? As long as I have enough food on which to survive, clean water, a roof over my head and 2 sets of clothes [1 to wear, 1 to wash], I need nothing else. Anything more than that is unnecessary and excessive.
While I have no way of discussing the impact of luck, there is something to be said about what I have taken to calling “unequal access to opportunity,” which I think begins with education. But that’s a whole other post.