Capitalist-Style Wealth Gap: 1 Tech Guy = 1,000,000 Teachers

Paul Buchheit

Paul Buchheit Author, editor, expert on income inequality

As of 01/20/19, the richest six American tech leaders (Bezos, Gates, Zuckerberg, Ellison, Page, Brin) averaged over $80 billion in net worth. Meanwhile, the 25 million Americans just above the median, many of them teachers, have an average net worth of $78 thousand. That's a difference of a million times. 

For anyone questioning this disturbing truth, the following information should be helpful: There are over 4 million preschool, primary, secondary, and special education teachers; the median teacher age is 41; the median elementary school salary is $57,000; the median wealth of a 41-year-old is only $60,000. So it's probably even worse than a million to one. Consider also that about 77 percent of teachers are female, and that females suffer the discrimination of lower wealth, especially Black and Hispanic women, for whom net worth is in the low HUNDREDS. 

The Los Angeles teachers are striking for better pay, smaller class sizes, the addition of nurses and counselors, and the ending of the rash of charter school openings that suck the lifeblood out of the public school system. They could also be striking for a fairer wealth distribution. A technology boss is not a million times more important than an L.A. teacher. 

Do They Deserve It? Fact 1: The Richest Tech CEOs Had Shady Beginnings 

Bill Gates may be a knowledgable man, but for starters he was lucky and opportunistic. In 1975, at the age of 20, he founded Microsoft with high school buddy Paul Allen. This was the era of the first desktop computers, and numerous small companies were trying to program them, most notably Digital Research, headed by software designer Gary Kildall, whose CP/M operating system (OS) was the industry standard. Even Gates' company used it. But Kildall was an innovator, not a businessman, and when IBM came calling for an OS for the new IBM PC, his delays drove the big mainframe company to Gates, who provided an OS based on Kildall's CP/M system. Kildall wanted to sue, but intellectual property law for software had not yet been established. David Lefer, a collaborator for the book They Made America, summarized: "Gates didn't invent the PC operating system, and any history that says he did is wrong."

To a large extent Mark Zuckerberg also took his ideas from others. Zuckerberg developed his version of social networking while he was at Harvard. Before he made his contribution, Columbia University students Adam Goldberg and Wayne Ting built a system called Campus Network, which was much more sophisticated than the early versions of Facebook. But Zuckerberg eventually prevailed because of the Harvard name, better financial support, and the simplicity of Facebook. A possible fourth reason: it was alleged that Zuckerberg hacked into competitors' computers to compromise user data. 

Jeff Bezos built his business with the extraordinary advantage of minimally-taxed sales on Amazon to offer discounts while undercutting competitors, pushing many of them out of business. While this might seem like a failure of government rather than an appropriation by business, it's a little of both, since Bezos, according to Slate, "spent millions of dollars per year on lobbyists, deployed an army of lawyers, and cultivated political allies with large campaign contributions." The Amazon CEO also takes from his employees, who have long been considered underpaid and overworked

Larry Ellison was #1 on Sam Pizzigati's Greediest of 2013 list. Greedy for money and for eternal life. According to the Washington Post, "Larry Ellison has proclaimed his wish to live forever." He and fellow Silicon Valley CEOs Peter Thiel and Larry Page were "using their billions to rewrite the nation's science agenda," as some scientists marvel at the "superiority complex" of the big-money men. 

As for Google's Larry Page and Sergey Brin, their company has gained recognition as one of the world's biggest tax avoiders, a master at the "Dutch Sandwich" and "Double Irish" global tax games. 

Do They Deserve It? Fact 2: The American Public is Responsible for Almost All Modern Technology 

The late Steve Jobs spoke for the industry: "We have always been shameless about stealing great ideas." 

As Gar Alperovitz noted, "Between the mid-1980s and the mid-1990s the National Science Foundation spent $200 million to build and operate a network of regional supercomputing hubs called the NSFNET. Connected to the ARPANET, this network established Internet access for nearly all U.S. universities, making it a civilian network in all but name." 

Government funding for technology goes back much further, as explained by Mariana Mazzucato: "From the Internet that allows you to surf the Web, to GPS that lets you use Google Maps, to touchscreen display and even the SIRI voice activated system -- all of these things were funded by Uncle Sam through the Defense Advanced Research Projects Agency (DARPA), NASA, the Navy, and even the CIA." Mazzucato goes on to describe 12 major technologies that have their roots in government research, including memory and hard disks, displays, cellular technology, and all the Internet protocols. Much of it came from the Department of Defense, the Department of Energy, NASA, the Air Force, and other tax-funded U.S. agencies. The biggest expense in the iPhone is the touchscreen, which was developed at the CERN laboratories in Europe. The National Science Foundation funded the Digital Library Initiative research at Stanford University that was adopted as the Google model. 

The business-minded The Economist, with reference to Mariana Mazzucato's book The Entrepreneurial State, admits that "Ms Mazzucato is right to argue that the state has played a central role in producing game-changing breakthroughs, and that its contribution to the success of technology-based businesses should not be underestimated." 

Why Do Billionaires Want Even More Money? 

Harvard studies indicate that very rich people are likely to base their life satisfaction on the question "Am I doing better than other people?" A survey of 2,000 millionaires and multi-millionaires, who were asked how much money would provide perfect happiness, found that "basically everyone says [they’d need] two or three times as much." 

Another insight comes from the "ultimatum game," in which one player divides a pot of money between himself and another, and the second player can choose whether or not to accept the offer. If the offer is rejected, neither player gets anything. Offers below 30 percent are usually rejected. Even at the cost of losing money himself, a player apparently can't bear to see another person outgain him. 

Capitalism is a perfect system for people like this, who care only about making more money than everyone else, and fail to grasp the importance of a healthy, working society. It's a game of winner-take-all. As Charles Koch said, "I want my fair share and that's all of it."

***

Reposted from Common Dreams

Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites UsAgainstGreed.org, PayUpNow.org and RappingHistory.org, and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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