The title of this article is the title of this weeks article in Macleans by Andrew Coyne. In it he presents some truly fascinating statistics about wealth distribution.

The protests have adopted the moniker "The 99%" and are protesting about the 1% of the population who have the highest incomes and control disproportionate amounts of the "population's" wealth.  In the last few decades the wealthiest, as the saying goes, have gotten wealthier, and everybody else is stagnating.  Coyne's statistics say that it isn't the 1% who have done well, it is actually the 0.01% who have basically taken everything.  Here is what Coyne had to report:

In the US, the "1%" a.k.a. "the super rich" earn more than $400,000.  (In Canada the same stat is $170,000)

Between 1980 and 2008, the US top 1% earner earned 8.5% of all income which has now grown to 20%  (In Canada it has grown from 8% to 11%)

So, to put this into perspective, there is a general rule (often called the Pareto principle) that almost 80% of anything is attributable to 20% of the population.  (e.g. 20% of homes own 80% of dogs, 20% of your customers account for 80% of your trouble calls, etc.)  So according to Pareto, 20% of the population would have 80% of the earning.  Income distribution actually does not fit this pattern.

In 1978 the top 20% took in 45% of all income.  It has risen now to where the 20% takes in 52%

In Canada we have a "progressive" tax system which means that higher incomes are taxed at a higher rate. Factoring in taxes, the after tax numbers above fall to 41% and 45%, respectively.

So, at least according to the Pareto rule, the earnings disparity doesn't actually look that extreme.  The 80% at the bottom actually get 55% of after-tax the earnings.

But, according to Coyne, as you start pushing  logarithmically through the top things get more interesting.

In the last 30 years, the share of wealth (earnings) for the top 20% have gone up.

But, all of the increase has gone the the top 1%.  The other 19% have seen no increase at all.

Who is in this 19%.  If you are reading this, probably you.  Just to add confusion to an article too full of numbers, Coyne only supplies a few more reference point: To be in the top 10%, you earn more than $65k.  So, I'm just guessing here, but to be in the top 20% you probably make more than $50k.

Within the top 1%, the lion's share of the gains went to the top 0.1%.

And within the top 0.1%, most of the gains went to the top 0.01%  (those making more that $1.8M)

So, the rich get richer; no surprise there.  But the stats above show that it is a very exclusive club.  Apply .01% to Canada's population and we're talking about 3500 people (for some reason Coyne says a few hundred people). And in the US that would be around 30,000 people.

It is a mystery to me why the Tea-Partiers in the US are forming angry mobs to protect these incredibly rich people.  Personally I think it is about time the 99% movement took to the streets chanting "make the rich pay".

Coyne then gets his conclusion wrong.  He says:

Those protesting are probably in the 10% and they're just envious of the 1%.  They want their fair share of the wealth hoarded by the wealthy.

I think he has their motivation wrong.  I'd join the Occupy Toronto movement if I had the time, but I fortunately still have a job.  I am probably a 10%er.  But I want the rich to pay their fair share so that we have a better society.  The rich don't see the really poor.  They arrive at work at their private helipad.  When I go to work I have to step over the homeless to get to my office.

I want the poorest of society to have health care, (and in the case of the homeless - mental health care).  I want them to have places to live, and work, and food to eat.  If the rich export our jobs to India and China so they can save 10 cents on their product so they can get the gold toilet they always wanted for their private jet .... I say tax the bastards.

If they would plow their money, with or with out government coercion, back into our economy, perhaps there would be more consumers and more money for consumers to buy their product.

Taxes are the price of civilization.  Keep going in this direction and more than a few Wall Street bank executives may face a date with the guillotine.

This is my reply to the another commentor on a Coyne Macleans article.

KeithBram said:

Meanwhile, while our pay was frozen for one year and barely increased for several, the company increased dividends to stockholders and bonuses to senior execs.

The CEO of our company makes between 300 and 400% more, annually, than I do - and I make a fair bit more than many in the company. There was no discussion of a freeze on pay or bonuses when ours were frozen. And while his compensation is quite high by Canadian standards, our company is international, with its HQ these days in NY; by American standards for a company of our size, his $20M+ salary is nothing remarkable.

Keith, I think you meant to say your CEO makes 300 to 400 times what you make.  If you actually meant 300%, that would mean you are making $5 or $6 million yourself, which ain't too shabby, even if it isn't keeping up with inflation.

I'm a big believer that the top 5 guys in the company should have a salary no more than 40 time the average salary for the entire company (including its employees and subcontractors in China, India, Malaysia, Mexico, etc.).  If they want to make more, they should pay everybody more to maintain the 40x multiplier.

30 years ago 40x was the going rate for CEOs.  In the last 10 years that has grown to 300x 400x or even more (counting bonuses and stock options.) Is my CEO contributing 400x more to the company than I am?  I don't think so. 

If the 1% protesters are looking for a single change that would address the wealth imbalance, legislate the 40x max.  If that means the CEOs need to go to another country to get a raise ... good riddance.  I'm sure we could find somebody to do his (and it usually is 'his') job for $1 or $2M a year.  I know I'd give it a go.

My long dear desk-top friend SAGE.exe has passed away in old-age.  Sage was a shareware TSR (terminate and stay resident, or something like that), that has been on the desktop of every computer I have ever owned or used going back to Windows 3.1.  It throws up a random quote on the screen every n minutes or on request.  It came with a 3000 quote data file back in, what, maybe 1992, and since then I have grown it to over 7000.

It has worked on Win 95, Win 2000, Win XP.  But, it no longer works on Win 7 64bit.  Not even in the compatability modes.  So, in looking for alternatives I have moved it to my website.  The Extension I am using is called Rquote.  It has much of what I am looking for. It gives a random quote every refresh of the page.

Next steps are to figure out adds, searches, and ultimately an RSS newsfeed, so I can get the quotes where I want them -- back on my desktop.

Followup on the spambot registrants:  The Extension called cedit seems to be holding.  I haven't had a bogus registrant on any of my sites in over a week.  Yeah! Score one for the goodguys.