Robert F. Sanchez: Solving “income inequality” is very complicated

gwengrahamjc

In this election year, “progressives” have announced that they’re going to make a big issue of income inequality. President Obama has said so, and New York City’s new mayor, the ultraliberal Bill de Blasio, has announced that addressing income inequality will be his administration’s top priority.

 However, a quick survey of the real world suggests that there could be difficulties in implementing an income-leveling program. Consider, for example, how the mayor will address a particularly egregious example of income inequality in the impoverished borough of the Bronx.

There in 2013, a high-profile employer — the New York Yankees — was paying one of its employees, a Florida lad named Alex Rodriguez, approximately $28 million.

During the 2013 season, the frequently injured Rodriguez participated in only 44 games. This means that his salary works out to $636,363 per game, $154,696 for each time at bat, $736,842 for each of his 38 hits, $1.3 million for each of the 21 runs he scored, and $4 million for each of the seven home runs he hit.

This is far more than the team is paying the clubhouse attendants who tidy up the mess and launder the soiled uniforms and towels. It’s far more than the ticket-takers and ushers are paid. It’s far more than the sums earned by the concessionaires who provide the overpriced hotdogs and beer. So, to paraphrase the “The Sound of Music,” how do you solve a problem like an A-Rod?

For instance, will de Blasio now declare that the Yankees are paying Rodriguez (and the other ballplayers) much too much and decree that their pay must be severely reduced so that it doesn’t exceed that of the least-paid employees on the Yankees’ payroll? Or will he find that the team needs to elevate the pay of its clubhouse attendants and others to the same level as the ballplayers? After all, the only way to eliminate “income inequality” is to make all incomes absolutely equal.

 Of course, a further complication arises when income is measured in relation to the time it takes — or the amount of actual “work” it takes — to earn it. In New York and Hollywood, for instance, some of the entertainers who are among the loudest critics of income inequality may earn millions of dollars for a few weeks of work on a movie or a TV series.

When calculated on an hourly basis, that’s a lot more than the pay of their nannies, cooks, butlers, and limo drivers, if not their lawyers, agents, psychiatrists, and drug-rehab counselors.

Even worse on any income-inequality scale that’s based on comparisons of hourly compensation, some retired Wall Street investors who reside in those upscale Manhattan brownstones allow their money to do all the work for them while they happily live off the returns on their investments. Because they don’t work much, their pay is virtually impossible to calculate on an hourly basis — but it’s undoubtedly a lot more than that of their servants.

Alas, these kinds of dilemmas illustrate only a few of the problems associated with trying to impose an economic system based on government officials’ edicts rather than on the functioning of a free market.

The one redeeming feature when it’s only the policy of a deluded mayor in one big city is this: People who don’t like these misguided policies may vote with their feet, moving to other cities and states.

Alas, when this kind of populist pandering becomes the prevailing policy at the national level, relocating to Switzerland or Belize may become an appealing alternative to those who don’t want to stay and put up a fight against this kind of economic nonsense — an even better stance.

Guest Author



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