Today we hear a lot about economic and
social justice. There seems to always be talk of raising the minimum
wage in order to have it keep up with inflation. We hear about the
great wealth divide where the gap between wealthy and poor widens.
This is spoken as if there is a limited numbers of dollars and if one
person gets wealthy they must be taking it from someone at the
bottom. This is a fallacy.
Today,
we have a global market. There is
massive trade between countries. Goods and services are exchanged
between countries. I could give you the total global accumulated wealth,
but that changes daily. The amount of a country's currency
changes daily. The USA is creating $84 billion a month. This doesn't
include dollars created out of thin air that is loaned to banks.
Even if that currency is temporary, it becomes temporally a part of
total currency. Gold and other commodities are converted to cash
through Rehypothification in the form of bonds.
Each day wealth is taken and returned
to the government. Currently the death tax (estate tax) is 40% of
assets above $5.5 million. When the government takes that money it's
often returned to the economy in various ways. Eventually that money
becomes available to be earned once more. To be sure, this isn't in
support of the death tax, but just an explanation of how currency
moves. This does show, especially under the current taxing system, the
rich cannot accumulate wealth to the point that the poor can have no
chance of moving to the middle class.
Death isn't the only way that wealth
trickles down to the poor. Much of the wealth lies with business –
be it small or large. Most businesses are always looking to expand.
They will spend money on building facilities in which to produce more
products or services. When expansion happens, more workers are hired.
Careful thought is given to the number of employees needed. In order
to make that decision they must look to see how much of their budget
can be set aside for labor. They, then, look at the labor market and
decide what is the lowest wage that can be offered to attract the
necessary labor. Skilled labor always comes at a premium, while
manual labor is usually easier to find at a lower cost.
