> Maybe it's just because I'm a pinko-European
Maybe.
No, they don't, this is a common misunderstanding. Including all 401ks, IRAs, directly-held stock, mutual funds, etc., the bottom 80% of Americans own less than 4% of all equities. The bottom 60% own 0.1% of all equities.[1]
[1]: https://medium.com/@MattBruenig/who-gains-from-dow-20-000-ba...
First, your stat ignores pension plans. Second, the bottom 60% might only own 0.1% of all equities, but that might be 50% of their savings/pension plan. I'd call that "skin in the game".
That one worker? If stock prices go up he will end up perhaps 1 more month's worth of retirement savings. Meanwhile his wages are being held down and the value he creates with his labor is being spent on stock buybacks and executive pay, the benefits of which go overwhelmingly to the other 999 people.
And yes, the stat includes pension plans.
So sure, the one guy has skin in the game. His wages have been held down, and in exchange he gets a fistful of coupons that entitle him to a few bucks for every million given to capital owners.
Wide scale elimination of pensions started in the 2000’s. Millions of people still have pensions in the US.
Of course the factory workers $30,000 in the market is going to be miniscule compared to the billionaire, but doesn't means it's not critical to the factory worker.
The fact that a tiny portion of workers also own some stocks doesn't change that fact.
And the fact that $30k in a retirement account is critical to a factory worker, doesn't help your case much. That pittance will have been saved out of already-stagnant wages that have been kept down by corporate management in favor of executive pay and stock buybacks, and will be nearly worthless for retirement purposes no matter what the stock market does. All you've done is reiterate the all-too-common disaster scenario for the working class that comes from favoring shareholders over workers.
The workers' real skin in the game is their labor and the value they produce from it, which is increasingly being kept back from them. They can have everything to gain and nothing to lose by gaining mandatory representation on the board.
It's everything to the factory worker, but it's a rounding error to anybody involved in making decisions that effect that factory worker's everything.
Using that definition of "skin in the game," I'm not sure what the point of the phrase is.
1: https://www.washingtonpost.com/news/wonk/wp/2017/12/18/for-r...
Second, there are less than half of the number of public companies as there were 20 years ago [1]. So the investors are chasing a small group with a larger market capitalization. That's due to many reasons, but regulation is a big one (sarbanes-oxley, dodd-frank, etc).
Many people don't have the risk tolerance to be in the market, let alone own a single stock. What happens if that stock were Enron or Worldcom? That's a lot of risk.
[0] https://news.gallup.com/poll/211052/stock-ownership-down-amo...
[1] https://www.bloomberg.com/view/articles/2018-04-09/where-hav...
I am a firm believer that the free and less regulated stock market and a smart and balanced portfolio is the best wealth creation tool Americans can tap into. The alternatives of savings accounts and CD's are laughably low yielding.
You say this like you think it somehow proves a point.
> I am a firm believer that the free and less regulated stock market and a smart and balanced portfolio is the best wealth creation tool Americans can tap into. The alternatives of savings accounts and CD's are laughably low yielding.
And I am a firm believer that most of these people do not have the resources or know-how to even begin doing this. Most are living paycheck to paycheck.
And I'm amused at the idea of loosening regulations on financial services industries ever has any effect other than a massive transfer of wealth from the lower classes to the wealthy.
Fair and that's the fundamental difference in our political ideology. I subscribe that the role of US government is not to transfer wealth or interfere with the free market. If I am in a room with another person and I have five dollars in my pocket and the other person has one dollar, am I suppose to give the other person two dollars to make everybody whole? The writer of this article and bill might think so.
That may not directly be its role, but if it isn't at -- least to some degree -- an outcome of the government's activity, then I think we're in trouble.
To a first approximation, wealth = power; and human nature being what it is, those who have wealth (and therefore power) will tend, in the absence of control/restraint from government, to use that wealth and power to gather more wealth and power for themselves, without regard for any impact (often negative) on those who have less.
Governments (in my opinion) have a responsibility to protect and help those who, for all kinds of reasons, do not have the wealth or power to adequately take care of themselves. That doesn't mean arbitrary handouts. But it does mean that a relatively larger share of centrally-managed resources should be directed towards helping those who need it most.
And so I'd expect one of the results of a well-run government to be a tendency to reverse some of the flow of wealth towards those who already have it.
1: https://www.gobankingrates.com/making-money/jobs/survey-grea...
2: http://www.fox19.com/story/22676408/bankratecom-finds-76-of-...
3: https://www.cnbc.com/2017/08/24/most-americans-live-paycheck...
4: https://www.cbsnews.com/news/americans-living-paycheck-to-pa...
Some people are poor, but some are just dumb. I wish I could fix poor, but I can't fix stupid. And there is a lot of stupid around.
I know many people who make a few hundred thousand dollars (in Texas, not silicon valley or NYC), and they live paycheck to paycheck. That's stupid, not poor.
So when I see stats like that (thank you for the links), I always wonder what the real number is - how many are poor, and how many are just stupid.
I get that there are people living genuinely frugally and still struggling. It may just be observational bias, but I suspect there are a lot more people struggling who are not choosing to live frugally and where that choice would help them quite a bit.
Obviously, I didn’t study economics when I was 5, but this seemed to be the norm in that era and community and would be viewed as abnormally (perhaps unacceptably) frugal now.
To be clear, they did get married, have children, live a decent life, and retire on pensions, but they and their neighbors lived a lot more frugally than seems to be normal/accepted today.
It's rigged for the rich, I promise.
http://time.com/money/5054009/stock-ownership-10-percent-ric...
No system has ever provided such high quality, low cost financial instruments with great liquidity and marginal trading costs accessible to anyone with a checking account.
The financial markets we have today are equitable and highly accessible. They are anything but rigged.
Now, you have to have enough money to buy a full share of whatever company you want. So Amazon has a minimum buy-in of about $1,900. One good argument for stock splits is that it makes your stock more accessible.
I don’t know what you mean by “poor people economics” but it sounds like you think saving and investing is beyond their reach. I disagree and I think it betrays more about you than I.
There are certainly times when spending all (or even in excess of all) your annual income is a rational and smart decision. But no matter what your income level, it is always true that some years you must save money aside from paying down loans.
The market is irrelevant for a vanishingly small number of people. The market is ignored by a large percentage of people who could benefit greatly from it.
I’m well aware most people don’t have $500 in their bank account. I would argue that makes equitable market access more important.
What? That's the key method by which people pay for their retirement. Of course they are gaining real money.
Joe six pack's biggest problem is their own ignorance.
Nobody has said anything of the sort here.
Nowhere is it even remotely implied that the market only benefits the ultra-rich and CEOs.
Because the wealthiest 10% of U.S. households own 84% of American-held shares, the obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer.
To imply it's a cry that the game was designed to be rigged is a straw-man.
https://news.ycombinator.com/newsguidelines.html
Edit: you've posted uncivilly elsewhere too, e.g. https://news.ycombinator.com/item?id=17766899. That's not allowed here, and we eventually ban accounts that do it. If you'd review the guidelines and post civilly and substantively only from now on, we'd appreciate it.
https://en.wikipedia.org/wiki/Codetermination_in_Germany#Int...
I assume that a civilised discussion can still be held in the US.
Inequality declines as Union membership rises[1], aka worker representation.
https://www.epi.org/news/union-membership-declines-inequalit...