Reich: Higher Wages Aren't Coming Back, and Here's Why

When two nations calculate net worth in different ways, it is entirely meaningless.

 

OK, so tell me cranberry and riptide ... how is Australia's relatively high median household net worth illustrative of Australia's commitment to egalitarianism? How is it illustrative of Australia's success at delivering on that commitment? Because here's the quote from cranberry that remains unsupported (vis-a-vis that statistic):

 

Imagine a society (A) of 10 people. Each of the bottom five has a net worth of $1. Each of the top five has a net worth of $10. The median net worth of this society is $5.50.

Now contrast that society with another one (B) of 10 people. Each of the bottom five has a net worth of $5.40. Each of the top five has a net worth of $5.50. The median net worth of this society is $5.45.

Clearly society A has a more egalitarian society than B.

Now, suppose that a year has gone by. In society A, the top-fivers have experienced a doubling of their net worth (to $20). Everyone else, in both society A and society B, has seen absolutely no change in net worth.

Now, not only is society A more egalitarian than society B, A has become relatively more egalitarian (because its median net worth has increased to $10.50).

 

Australia has fewer people living in poverty due to better social safety net programs. It also has a $17 minimum wage and mandates that employers invest 9.25 pct of employees salaries in their equivalent of a 401k program.

The test of our progress is not whether we add more to the abundance of those who have much it is whether we provide enough for those who have little.

-- FDR

 

And the dingos ... don't forget them. I'm sure they add at least $200K to the median household's net worth.

 

Good luck with your Dingonomics, Quant.