Many in academia and elsewhere lament economic inequality.

In fact, these same individuals are known to call for “social justice.”

The redistribution devil is in the details. Tax the rich s’il vous plait?

Wish it was just that easy.

Maybe we should all look in the mirror instead?

mirror

 

Three of the Biggest Factors for Economic Inequality

There are at least three major determinants, one potentially leading to another, when it comes to monetary disparity

1. Graduating from a real college or university

2. Securing admission to the best anti-poverty program of all: A well-paying private sector job with customary benefits

3. Investing in high-growth stocks and/or mutual funds

Come to think of it, these three contribute mightily to the gap between the haves and the have-nots.

According to Pew Research and reported by Andrew Kelly in his “Let’s Clarify The ‘College is Worth It’ Conversation” for Forbes, the disparity between those with bonified college degrees (e.g., BA or BS) and those with only as associate’s degree or worse, just a high school degree, has never been greater.

The record spread between those with bachelor’s degrees and those with associate’s is $15,500 annually, and $17,500 between the college grads and high school grads. The gap becomes staggering when multiplied over an anticipated 40-year career (that makes the big assumption that the AA or HS grad is still working – and not involuntarily put out to pasture — four decades later).

Without any further appreciation of the gap between the college graduate and her or his associates or high school peers, the 40-year disparity is $620,000 and $700,000 respectively. That’s big-time dinero even in this somewhat inflationary economy.

Certainly there is no guarantee that a bachelor’s degree leads to a moderate-to-high five-figure job, let alone to a six-figure position. In fact, many employers are now requiring master’s degrees or another two years of schooling. One point is certain; a bachelor’s degree is a ticket to compete for white-collar positions, something that an associate’s degree or high school diploma in virtually all cases does not provide.gradsandduck

And with the tough-to-attain, even-with-a-bachelor’s degree white-collar job, comes in most cases a salary, medical-dental-vision benefits and maybe participation in a company ESPP (Employee Stock Purchase Plan) or stock option program. Contemplate that we are not just talking about a salary, but discretionary resources that most likely will vault way above the present rate of inflation.

Investing Discretionary Income

Someone living paycheck-to-paycheck or worse sinking further into debt cannot conceive of discretionary income. They are just trying to make ends meet. Way-too-many Americans have nothing saved for retirement, and are one catastrophic event away from personal bankruptcy.

For those with bachelor’s degrees or above from reputable colleges and universities (sorry University of Phoenix; buying a degree doesn’t count), they can compete for well-paying private sector positions with benefits. They have resources to invest, and invest they do.

According to the Gallup Organization, 87 percent of upper-income Americans — those making $75,000 or more annually — own stocks, as do 83 percent of postgraduates and 73 percent of college graduates.

And what is a common-characteristic of “upper-income Americans”? A bachelor’s, master’s or doctorate degree. And which group commands the lion’s share of those who purchase equities and participate in our bull markets? Graduates and postgraduates.gender6

Are students being taught the tenets of capitalism at our leading colleges and universities? Maybe or maybe not. Are they figuring out that buying low and selling high with discretionary income is a proven way to build wealth? That appears to be the case.

Should they be required to redistribute the fruits of their long-hours in the classroom and their accomplishments at the workplace, thus reducing the amount they can invest in entrepreneurs?

There may be a professor or two, who thinks that is a swell idea.

http://www.forbes.com/sites/akelly/2014/05/31/lets-clarify-the-college-is-worth-it-conversation/

http://www.icifactbook.org/fb_ch6.html

http://money.cnn.com/2013/05/09/investing/american-stock-ownership/

http://www.gallup.com/poll/147206/Stock-Market-Investments-Lowest-1999.aspx

http://en.wikipedia.org/wiki/Economic_inequality

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