This is "Elvis Week:" at his Graceland mansion in Memphis, but it isn't only Elvis fans gathering there. Members of Black Lives Matter have demonstrated this week, threatening to shut down the festivities. They are protesting a police shooting of a black man, and they are also protesting income inequality. One can assume they chose Graceland because it represents the millions of dollars earned by Elvis and his estate.
For years leftists have railed against so-called income inequality, thereby revealing their gross ignorance of the subject. Yes, incomes are unequal, but there are valid reasons for it. The primary factors that determine wage levels are skills (or lack of), experience, level of education, degree of difficulty of a job, demand for applicants, and an employer's ability to pay at a certain wage level.
In common sense terms, who would argue that a heart surgeon and a cashier at McDonalds should earn the same pay? But let's suppose for the sake of argument that a law was enacted that mandated equal pay for all workers. First, let us say that this law demands that the surgeon and the fast food cashier both earn 15 dollars an hour.What would be the consequences? That should be obvious. At some point in time we would run out of surgeons because no rational person would go through the required education and expense, and years of training if the end reward is 15 bucks an hour.
Now we will reverse the perspective. Let us suppose a top surgeon can earn 500 thousand dollars a year. This time we will assume the law mandates that all workers earn that five hundred grand, including the McDonalds cashier. How long do you think McDonalds or any other fast food operation would remain in business? And at those wage rates, what do you think a hamburger, fries and Coke would cost?
Wages are at the levels they are at for a reason. Should a busboy earn as much as a police officer or firefighter? Should the CEO of a corporation that employs 50,000 people, and a bus driver earn equal pay?
There is yet one more example of income disparity.The average salary for a player in the NBA is around 4 million dollars, while the average pay of a Chicago public school teacher is around 60,000 dollars.There would be little argument that a teacher is far more important to our society than a guy dribbling a ball up and down a wood floor. So why the outrageous income disparity?
Simple. The basketball player is involved in a business that generates hundreds of millions of dollars in revenue from ticket sales, radio and TV contracts, merchandising, etc..
A teacher's income, on the other hand, is derived from taxing the citizens.To make a teacher's salary equivalent to an NBA player, real estate and income taxes would have to be raised to such astronomical levels that no one could afford to own property or run a business. The system would collapse. Therein lies the final factor in terms of salary levels: The employer's ability to pay.
Ultimately if a system of income equality were to be established, it begs three vital questions: Who decides the pay rate? What criteria is used to make that determination? What gives that person or persons the right to determine what all workers should earn?
Like all socialist theories, the idea of income equality is rife with contradictions and reveals complete ignorance of economic laws.
