An intriguing line of research identifies an increase in the incidence of economic “rents” (profits over and above the levels needed to justify investment or input of work) as a possible villain. A study last year by Jason Furman, of the Council for Economic Advisers (CEA), and Peter Orszag, a former budget director for Barack Obama, found that the top 10% of firms by profit have pulled away sharply from the rest (see chart). Their return on capital invested rose from more than three times that of the median firm in the 1990s to eight times. This is way above any plausible cost of capital and likely to be pure rent. Those high returns are persistent. More than four-fifths of the firms that made a return of 25% or more in 2003 were still doing so ten years later.
Other research suggests that this increasingly skewed distribution of profits goes a long way to explaining the rise in wage inequality. A paper in 2014 by Erling Bath, Alex Bryson, James Davis and Richard Freeman found that most of the growing dispersion in individual pay since the 1970s is associated with variations in pay between companies, not within them. In other words, the most profitable companies pay handsomely and people who work for them earn more than the rest.
This finding was confirmed in a more recent study by Nicholas Bloom and David Price, both of Stanford University, with others, which found that virtually all of the rise in income inequality is explained by a growing dispersion in average wages paid by firms. This finding, the authors conclude, holds across all industries, regions and firm sizes. One of the most striking implications is that inequality within firms has not changed much: the relationship between managers’ and shop-floor workers’ pay in each firm is still roughly the same. But the gap between what the average and the best firms pay their workers at all levels has widened. Alan Krueger, of Princeton University, illustrated this point nicely at a presentation he gave while working at the CEA in 2013. Using data from the decade after 2003, he showed that where managers are well paid, so are janitors (see above chart).
According to a new report released by the International Telecommunication Union (ITU) that measured the monthly cost of 500MB of pre-paid, mobile-broadband data, developed countries are the proud owners of the most affordable mobile-broadband in the world... sort of. While Austria comes in at a $4.70 per month, the mobile-broadband dark horse of the developed world, the United States, hits a staggering $85—but then, most of you were probably already well acquainted with that absurd truth. The ITU measured the monthly prices as a percentage of monthly gross national income, so the cause of the massive disparity comes down to the market itself.
It appears to me that we, in the USA, are being ripped off on the price of 500Mb. Is this because it is captured in fiber instead of satellite connections? Why is the EU area so much cheaper? Are we getting screwed? Does anybody know?
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US prices were the highest across all service Levels.
What I tried to do throughout the campaign was to suggest not only the morality of the positions that we were taking in terms of poverty or health care, but to say: “You know what? These ideas, these concepts, exist in many other countries around the world. Bernie Sanders did not wake up last night with this great idea that we should guarantee health care to all people as a right. Actually, it exists in every other major country on earth. You don’t know that, because the media has forgotten to tell you that. But it does exist. In Denmark, because of union negotiations, the minimum wage is about $20 an hour. In Germany, you go to college tuition-free. In Finland, they actually pay you to go to college. Now, you don’t know that in America because CBS forgot to tell you. But that is the reality.”
BIG-MONEY INTERESTS
Look, the cost of international telecoms are not set by any government body (that I know of). They are the prices that a "free-market" has established. Even in Europe (I live in France), I can compare internet interconnect prices with friends in the UK and their costs are considerably more expensive. Ditto the US.
From here: 2016 Price Comparison Study of Telecommunications Services in Canada and Select Foreign Jurisdictions - see subsection here: 5.3 International Fixed Broadband Internet Service Prices - excerpt:
The above may surprise you, but not me. For all the palaver of the kind "Effective supplier competition is the basis for fair-pricing in a market-economy"; well, it's just plain malarkey. The US has some of the most unfair pricing due to the connivance by market-players that should be confronted by national oversight government agencies - but isn't.
But has not be since a long, long time. Not even Obama got around to doing it, because of the oppressive will of Replicant members of Congress whose jobs are largely due to political financing of BigMoney-Interests.
MY POINT
And nothing will change in LaLaLand on the Potomac whilst BigMoney-Interests prevail there ...
PS - ABOUT BERNIE
Bernie was right boys-'n-girls, vested interests in Washington are controlling the rules by which markets are organized and the manner in which they compete (or, rather, collude).
If interested, his post-campaign interview with The Nation here - excerpt:
As regards the red-highlight in the quote - I can vouch for it. I live in France, and my National HealthCare System is considered one of the best. See here, again from the Guardian: Which country has the world's best healthcare system?
I'm still angry at Bernie for endorsing Hillary instead of taking the number one slot for the Green Party.
Fairness For All*
The Congressional Progressive Caucus believes in government of the people, by the people, and for the people. Our fairness plan is rooted in our core principles. It also embodies national priorities that are consistent with the values, needs, and hopes of all our people, not just the powerful and the privileged. We pledge our unwavering commitment to these legislative priorities and we will not rest until they become law ...
The Congressional Progressive Caucus (CPC) is the largest membership organization within the Democratic congressional caucus in the United States Congress with 75 members. The CPC is a left-leaning organization that works to advance progressive and liberal issues and positions.
The CPC advocates "universal access to affordable, high quality healthcare", fair trade agreements, living wage laws, the right of all workers to organize into labor unions and engage in collective bargaining, the abolition of the USA PATRIOT Act, the legalization of same-sex marriage, US participation in international treaties such as the climate change related Kyoto Accords, strict campaign finance reform laws, a crackdown on corporate welfare and influence, an increase in income tax rates on upper-middle and upper class households, tax cuts for the poor, and an increase in welfare spending by the federal government.
Subtitle: A dearth of competition among firms helps explain wage inequality and a host of other ills
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